Glossary · Reading the business
Leasehold improvements
In short
These are modifications made to a leased property by the tenant to suit their business needs. They are assets that typically revert to the landlord at the end of the lease.
What it means in a deal
When buying a business that leases its space, assess the value and remaining useful life of any Leasehold improvement. Understand who owns them and if you'll be compensated for them if you move or if the lease ends. Factor their depreciation into your financial projections, as they affect the business's Tangible asset value.
Related terms
Common questions about Leasehold improvements
- Can an SBA loan finance leasehold improvements for a business operating in leased premises?
- Can an SBA 7(a) loan finance significant leasehold improvements for a business being acquired?
- Can an SBA 7(a) loan cover leasehold improvements for a business operating in leased premises?
- What level of environmental due diligence is required for leasehold improvements only, without real estate acquisition?
- Can a borrower's investment in leasehold improvements prior to loan closing count towards the equity injection?
- Can SBA 7(a) working capital funds be used for post-acquisition renovations or minor leasehold improvements?
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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