Glossary · Reading the business
Risk mitigation
In short
Strategies and actions taken to reduce the likelihood or impact of potential problems for the business. Lenders look for this to protect their investment.
What it means in a deal
During due diligence, identify key business risks (e.g., customer concentration, key employee dependence) and plan how you'll mitigate them. For example, key man insurance mitigates the risk of losing a critical employee. Presenting a solid risk mitigation strategy strengthens your loan application by assuring the lender of your preparedness.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
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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