Glossary · Reading the business
Residual Value(Salvage Value)
In short
This is the estimated value of an asset at the end of its useful life or a specific period. It's often used in equipment leasing or depreciation calculations.
What it means in a deal
While less directly critical for the initial loan underwriting, understanding the residual value of significant equipment can help you assess the true cost of ownership and future capital expenditure needs. An appraiser might factor this in when valuing fixed assets that serve as collateral.
Related terms
Common questions about Residual Value
- What if the primary business assets are specialized machinery with limited resale value?
- How does the SBA evaluate the value of contributed equipment for equity injection?
- What if the value of my stock portfolio (for equity injection) drops before closing?
- When acquiring a business, can an SBA loan finance 100% of the goodwill value?
- How does the SBA typically value goodwill in a business acquisition for lending purposes?
- How does a lender determine the fair market value of business equipment used 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.
Pressure-test the numbers before you make an offer
Send us the asking price and the seller's cash flow — we'll show whether the deal services SBA debt and where the add-backs are likely to hold up.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.