Seller/Company Credit Cards and Working Capital Adjustment Questions

by a searcher from University of California, Los Angeles - UCLA Anderson School of Management

1 year ago

Hi all,
I've seen several deals where sellers have credit cards on their balance sheets. Are these typically adjusted as part of the working capital calculation on a transaction? To me it seems like it would be a debt-like item but certainly arguments can be made against that.
Thanks

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searcher from Missouri University of Science and Technology

Debt without a doubt to be paid at close by seller.

I would scrutinise the historic use if you can see a pattern. If it’s being used to support a sales rep travelling, then it’s likely for ease of transacting and not necessarily a source of credit for the company.

Ensure it’s considered in the working capital figure in any case.

1 year ago | like reply | 1 like

lender from Eastern Illinois University

From what I have seen is it is usually considered debt and required to be paid off by the seller at closing. I hope that answers your question.

1 year ago | like reply | 1 like

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