Glossary · Reading the business
Liquid assets
In short
These are assets that can be quickly converted into cash with minimal loss in value, like cash in bank accounts. They indicate a business's ability to cover short-term obligations.
What it means in a deal
Lenders look at a business's liquid assets (and your personal liquid assets) to assess working capital and the ability to absorb unexpected costs. While the SBA doesn't have a specific requirement for business liquid assets, sufficient working capital is usually required as part of the loan. For your equity injection, you'll need to prove your own liquid assets are seasoned and available.
Related terms
Common questions about Liquid assets
- What if my personal financial statement shows low liquid assets?
- What exactly constitutes "unencumbered liquid assets" as a source for the required equity injection?
- What percentage of the equity injection must be unencumbered liquid assets for a $1,000,000 business acquisition?
- What if my personal credit score is strong (e.g., 720), but my personal financial statement shows limited liquid assets?
- Do I need personal assets to secure the loan if the business assets are sufficient?
- If the business's assets are insufficient, will I need to pledge personal assets as collateral?
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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