Glossary · Reading the business
Financials
In short
These are the core documents showing a business's financial health, like the P&L and Balance Sheet. You need them to understand performance and value the business.
What it means in a deal
Lenders will scrutinize several years of historical Financials to assess the business's cash flow and repayment capacity. During due diligence, reconcile these with tax returns and bank statements to ensure accuracy.
Related terms
Common questions about Financials
- Besides financials, what other key documents are needed for an SBA 7(a) loan?
- What if my personal liquidity is low, but the business's financials are very strong?
- How important is my personal credit score if the business I'm buying has strong financials?
- What specific diligence must a lender perform on seller's financials for a 7(a) acquisition loan?
- What if the seller's representations about the business's financials turn out to be significantly inaccurate during diligence?
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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