Post-Closing Liquidity in SBA-Financed Acquisitions

Post-closing liquidity—the amount of cash a buyer has left after funding a business acquisition—is a critical but often overlooked factor in SBA loan approvals. Many buyers mistakenly focus only on their equity injection, not realizing that lenders also assess what reserves remain after the deal closes. For example, if a deal requires a $250K injection and the lender wants to see $100K in post-closing liquidity, a buyer needs at least $350K total to qualify. Falling short, even by a small margin, can cause strong deals to be declined. There’s no universal liquidity threshold, as each lender sets its own standards—ranging from fixed dollar amounts (e.g., $75K–$150K) to formulas based on business risk (e.g., 6 months of fixed expenses). Lenders want assurance that buyers aren’t fully depleting their capital on Day One, especially given the likelihood of early operational challenges like delayed receivables, supply issues, or revenue dips. At Pioneer Capital Advisory, guiding clients through liquidity expectations is a key part of the process, tailored to individual bank standards and deal specifics. Key takeaway: It’s not just about what you can put down—it’s about what you’ll have left. Thoughtful liquidity planning can be the difference between a closed deal and a deal that falls apart.