Brad has a great response here, and I would just like to add something that gets overlooked every time, when it comes to post-closing working capital adjustments. I know this is not exactly how your question is framed, but it is applicable nonetheless: If the buyer is receiving an actual cash rebate as part of the working capital true up, that cash must be used to pay down the principal of the loan. So, if you pay the seller in a combo of cash and loan proceeds, and they in turn "refund" that money back to you post closing (after they have been in possession of the money), then you are required to pay down the note in the same amount (or up to 25% of the loan). Again, your question seems to assume that you are "buying" the cash and the amount is predetermined prior to closing, which is slightly different (similar to other trading assets like A/R and inventory) but I would wager that the seller's advisors suggest a net working capital adjustmentredacteddays post-close. This gets complicated, so feel free to DM me if you would like some additional input on how to structure something like this.

All great comments regarding the requirement for actual cash contribution. Except for a partial buyin with a seller 2 year PG, the balance sheet can can count for down payment by the SBA….but I don’t know of any lenders doing that and haven’t heard of many sellers agreeing to the 2 year PG. so you’ll just need to assume actual cash will need to be brought to the table.