Peg, pegged dollar, true-up
The working-capital peg is the exhibit definition. Pegged working capital is the number that definition prints. The true-up pays the difference after the signed physical. Buyers’ peg explainer is the buy-side map. Inventory count at closing is the physical.
A retailer leftover ignores raw, WIP, finished goods, consigned lots, and customer-owned tools. Fed G.17’s 76.0% July 2026 utilization print (Source: Fed G.17) does not write your exhibit.
Show the look-back months, the adjustments, and the resulting dollar. Do not drop a round number because it felt customary. Raw, WIP, finished, consigned, and customer-owned tools must be named. Unbilled work and deposits must be named. The count date and the dispute path must be named. A QoE can recommend reserves. The purchase agreement still has to write the peg and the true-up.
How it works still wants the exhibit draft at LOI. The peg owner is the process home. The inventory count page is the physical. This page stays on the target-dollar noun. Jason Taken does not certify the calculator.
Why a lone dollar in the LOI fails
Because eligibility and WIP method can move the delivered number by six figures. BizBuySell’s manufacturing median close was 223 days (Source: BizBuySell). Use the window to freeze method, look-back, and E&O. SBA 7(a) still caps at $5 million (Source: SBA). Lenders will not treat a fuzzy peg as a rounding error.
Show the look-back months, the adjustments, and the resulting dollar. Do not drop a round number because it felt customary. Raw, WIP, finished, consigned, and customer-owned tools must be named. Unbilled work and deposits must be named. The count date and the dispute path must be named. Excess cash and interest-bearing debt sit outside an enterprise-value peg. A QoE can recommend reserves. The purchase agreement still has to write the peg and the true-up.
How it works still wants the exhibit draft at LOI. FAQ owns the questions. The peg owner is the process home. Jason Taken does not certify the calculator.
How to write the target without lying
Show the look-back months, the adjustments, and the resulting dollar. Do not drop a round number because it “felt customary.”
| Phrase | Meaning | Missing piece if used alone |
|---|---|---|
| Peg | Method / exhibit | The dollar |
| Pegged working capital | Target dollar | The method |
| True-up | Cash after physical | Both of the above |
Why must the LOI freeze more than a dollar?
Because eligibility, WIP method, consigned lots, customer-owned tools, unbilled work, deposits, the count date, and the dispute path can move the delivered number by six figures. The word customary is not a method. Excess cash and interest-bearing debt sit outside an enterprise-value peg. Putting them in the average double-counts or misses a wire. Quality of earnings can recommend reserve or WIP adjustments. The purchase agreement still has to write the peg and the true-up.
A plant peg must name raw, WIP, finished goods, consigned stock, and customer-owned tools. How it works still wants the exhibit draft at LOI. FAQ owns the questions. The glossary hands you to the peg owner, then to a confidential intro call. Jason Taken is a business broker. He does not certify the calculator.
If the LOI has a dollar and no exhibit, you do not have pegged working capital. You have a placeholder. Write the method before anyone exclusive. The true-up cannot test a number that never had a definition. The peg owner page is the process home.
A true-up that starts from a physical taken two weeks after close is already a different deal than the one the LOI described. Write the count date. Write who is in the room. Write how disputes go to the accountants both sides named. Excess cash stays outside the peg. Customer-owned tools stay outside unless the exhibit says otherwise. The peg owner is the process home. This page stays on the target dollar.
Write the count date in the LOI. A dollar without a date is not a target. It is a future argument.
What this page will not do
It will not certify the calculator. Jason Taken is a business broker. The glossary sends you to the owner. After the noun is straight, book a confidential intro call.