Glossary · Reading the business
Trade Payables(Accounts Payable)
In short
These are amounts a business owes its suppliers for goods or services purchased on credit. As a buyer, you need to understand the payment terms and current balances to assess the business's short-term liabilities and working capital needs post-acquisition.
What it means in a deal
In an asset purchase, you typically assume no seller liabilities, but you need to account for how the business will fund its payables cycle moving forward. Review the aging report during due diligence to spot any overdue balances that could indicate cash flow problems or strained supplier relationships.
Related terms
Common questions about Trade Payables
- Can an SBA 7(a) working capital loan be used to pay off seller's outstanding trade payables?
- Can I use the working capital portion of my SBA loan to pay off the acquired business's existing trade payables?
- Can a 7(a) loan finance the purchase of intangible assets like customer lists or trade secrets in a business acquisition?
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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