Glossary · Reading the business
Unsecured debt
In short
Debt not backed by specific collateral, like credit card debt or personal loans. For a buyer, this increases the business's or your personal liabilities without offering assets to cover it if things go wrong.
What it means in a deal
Review the seller's balance sheet carefully for unsecured debt which adds to the company's liabilities. On a personal level, your own unsecured debt will impact your debt-to-income ratio and repayment capacity, which lenders scrutinize. Minimize it pre-closing if possible.
Related terms
Common questions about Unsecured debt
- Can I use an SBA 7(a) loan for debt consolidation of existing business debts?
- Can I use an unsecured personal loan from a bank to fund my equity injection?
- Can an unsecured personal loan from a friend be used as part of my equity injection?
- Can funds from an unsecured personal line of credit be considered part of my equity injection?
- Can a buyer use an unsecured personal loan for their equity injection on an SBA 7(a) acquisition?
- How should a lender verify an equity injection sourced from an unsecured personal loan from an unrelated third party?
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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