No. The regulatory test requires the specified business age and GAAP net loss measured against pre-loss net worth during the applicable period before the priority date. Cash-flow pressure alone is insufficient.
Use the defined test rather than the sales description
The business must have existed at least two years, with the relevant twelve- or twenty-four-month net loss reaching at least twenty percent of pre-loss net worth. Have those figures and the applicable dates assessed from the actual records. Ask for audited financial statements prepared under recognized accounting principles, not internal management reports formatted to look similar.
An independent accountant, not the enterprise's own bookkeeper, should confirm which accounting method produced the net-worth figures being compared and whether that method stayed consistent across the measurement period. Watch for one-time write-offs or asset revaluations that inflate the apparent loss without reflecting ordinary operating performance, since the test measures genuine deterioration rather than a single adjusting entry. If the enterprise claims troubled-business treatment to support job preservation rather than job creation, confirm which qualifying jobs existed before the measurement period and how the enterprise will document that they continued, because preservation evidence differs from evidence built around newly created positions.
Bring the same records to counsel before assuming any single balance sheet resolves the question, because the qualifying test depends on figures counsel can independently verify.