Glossary · Reading the business
Financial spreads
In short
Financial spreads are a detailed breakdown and analysis of a business's financial statements over several years, often standardized by lenders. They help you and your lender understand the company's historical performance, trends, and financial health.
What it means in a deal
When buying a business with a 7(a) loan, your lender will "spread" the seller's financial statements (P&Ls, Balance Sheets) to identify normalizations and calculate key ratios like DSCR. This process helps confirm the business's ability to service the new debt. Review these spreads carefully with your advisor to ensure they reflect the true financial picture.
Related terms
Common questions about Financial spreads
- What if my personal financial statement shows low liquid assets?
- Are SBA 7(a) loans exclusively for businesses with financial difficulties?
- What if my business is new and has no financial history?
- Does misrepresenting financial information on the SBA application automatically kill approval?
- How does my personal financial history affect SBA 7(a) loan approval?
- What specific financial documentation will I need to provide for my personal finances?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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