Glossary · Reading the business
Risk Management
In short
The process of identifying, assessing, and mitigating potential risks that could negatively impact a business's operations or finances.
What it means in a deal
As a buyer, your due diligence involves extensive risk management. You're evaluating operational, financial, market, and legal risks of the target business. A strong risk management plan, including key man insurance or contingency plans for critical suppliers, will reassure your lender and protect your investment.
Related terms
Common questions about Risk Management
- How does the SBA verify my business management experience?
- Is previous business ownership or management experience required to qualify?
- How does common management trigger affiliation for size standard purposes?
- How does the SBA define "management experience" for a business acquisition?
- How does common management trigger affiliation for SBA size standard purposes?
- What constitutes 'common management' triggering affiliation for SBA 7(a) size determination?
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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