Glossary · Reading the business
Short-Term Asset
In short
Assets expected to be converted to cash, used up, or sold within one year, like inventory or accounts receivable. These are vital for a business's daily operations and liquidity.
What it means in a deal
When acquiring a business, you'll analyze these assets on the Balance Sheet to understand working capital. An SBA 7(a) loan can include funds for Working Capital, but it's crucial to confirm the quality and collectability of existing short-term assets like Accounts Receivable during due diligence.
Related terms
Common questions about Short-Term Asset
- How does the SBA handle a short-term deferral of principal payments at the start?
- Can I use an SBA 7(a) loan to cover short-term operating expenses for my business?
- Can a short-term personal loan from a relative, repaid before closing, count as my equity injection?
- What happens if the business's current lease agreement for its premises is short-term or expiring soon?
- When can a lender approve a short-term deferment or modification of a 7(a) loan's payment terms without prior SBA consent?
- Can I use the working capital portion of my SBA 7(a) loan to repay a short-term bridge loan used for acquisition expenses?
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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