Glossary · Reading the business
Illiquid asset
In short
This is an asset that cannot be easily or quickly converted into cash without a substantial loss in value. You care because these assets don't contribute to immediate cash flow and can't readily cover unexpected expenses or loan payments.
What it means in a deal
Examples include specialized equipment, real estate, or certain long-term investments. While they hold value, you can't rely on them for short-term liquidity. Focus on the business's cash flow and working capital for operational needs.
Related terms
Common questions about Illiquid asset
- How does a lender verify equity injection funds from a borrower's investment account holding illiquid assets?
- Is a blanket lien on all business assets always required for a 7(a) loan, regardless of loan size or asset value?
- What is the difference between an asset and stock purchase in a buyout?
- How does a recent significant personal asset purchase affect my SBA 7(a) loan application?
- What if the business I'm buying has intellectual property (e.g., patents, trademarks) as its main asset?
- How does an SBA 7(a) loan address the financing of intellectual property as a major business asset?
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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