Glossary · Reading the business
Working Capital Reserves
In short
Cash kept aside to cover short-term operational needs, unexpected expenses, or periods of lower revenue. Essential for business stability post-acquisition.
What it means in a deal
The SBA loan can include funds for Working Capital. You need to ensure the business has sufficient Working Capital Reserves to operate smoothly, especially during a transition or if revenues dip. This is critical for maintaining Solvency and meeting Debt Service Requirements without immediately running out of cash.
Official sources
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
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 Working Capital Reserves
- 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 2026-06-15 · 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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