Glossary · Reading the business
Working capital
In short
Cash the business needs on hand to operate — payroll, inventory, the gap between paying suppliers and getting paid.
What it means in a deal
Working capital is the operational buffer that keeps a business running day to day. If your new business pays suppliers before customers pay you, you need cash in between — that gap is your working capital need. SBA 7(a) loans can include a working-capital component as part of the deal structure, but lenders will scrutinize the amount. Show up to closing with at least one month of operating expenses in liquid reserves beyond your injection.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-16. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Working capital
- Are there specific limits on the amount of working capital that can be included in a 7(a) Working Capital Pilot Program loan?
- What kind of everyday expenses can working capital cover?
- Can an SBA 7(a) loan finance working capital?
- What is the typical repayment term for working capital only?
- Can working capital be used for unexpected business expenses after closing?
- What does 'working capital' mean for an SBA 7(a) loan?
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 2026-06-16 · 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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