Glossary · Reading the business
Startup Cost
In short
Expenses incurred before a business officially begins operations. In an acquisition, this typically refers to initial investments needed to get the newly acquired business running or to implement immediate changes.
What it means in a deal
For an acquisition, Startup Costs might include initial inventory purchases, minor leasehold improvements, or working capital to bridge the gap until the business generates sufficient cash flow. Be precise in your cash flow projections and ensure any necessary startup costs are accounted for in your total project costs and loan structure.
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
Common questions about Startup Cost
- Does an SBA 7(a) loan cover the initial franchise fee and associated startup costs?
- Can closing costs such as legal and accounting fees be included in the total project cost for the 10% calculation?
- What factors primarily influence the premium cost of business life insurance?
- Are SBA 7(a) loans only for very small, startup businesses?
- What if the business I'm acquiring is a startup with limited operating history?
- Are SBA 7(a) loans mainly for startup businesses, or also for existing ones?
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.