Glossary · Reading the business
Net cash flow
In short
This is the actual cash a business generates or uses over a period, after all expenses, taxes, and debt payments. It's the truest measure of a business's liquidity.
What it means in a deal
Lenders scrutinize net cash flow to determine if the business can cover its new SBA loan debt service and still have enough working capital. It's a critical component of repayment capacity, showing whether the business can truly afford the loan payments. Don't confuse it with SDE or EBITDA.
Related terms
Common questions about Net cash flow
- Can future cash flow or profits from the acquired business count as equity injection?
- How can an SBA 7(a) loan help with ongoing cash flow for my business?
- What is the primary factor a lender considers when evaluating the cash flow from an acquired business?
- Are there any restrictions on the use of cash flow projections for an SBA 7(a) acquisition loan?
- Can I use an SBA 7(a) loan for my business's daily operating expenses or cash flow?
- How does a lender evaluate the reasonableness of a borrower's projections for future revenue and cash flow?
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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