Glossary · Reading the business
Obsolescence
In short
The state of being no longer useful or desired because something newer or more efficient exists. In inventory, it means goods are difficult to sell.
What it means in a deal
During due diligence, assess the risk of inventory obsolescence, especially for businesses with rapidly changing products or technology. Obsolete inventory can lead to significant write-downs, directly impacting the business's profitability and asset value post-acquisition.
Related terms
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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