{"ok":true,"canonical_url":"https://www.capbench.com/glossary/bargain-purchase","api_url":"https://www.capbench.com/api/public/glossary/bargain-purchase","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-17","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","CapBench lender and franchise enrichment"],"term":{"slug":"bargain-purchase","term":"Bargain purchase","group":"Doing the deal","definition":"A bargain purchase happens when you acquire a business for a price significantly below its fair market value. This can result from a motivated seller, market inefficiencies, or unique buyer advantages.","what_it_means":"Identifying a bargain purchase requires thorough due diligence and a robust business valuation. While attractive, lenders will scrutinize why the price is so low to ensure no hidden liabilities or risks. Be ready to explain the rationale.","url":"https://www.capbench.com/glossary/bargain-purchase","official_sources":[],"related":[{"slug":"negative-goodwill","term":"Negative goodwill","url":"https://www.capbench.com/glossary/negative-goodwill"},{"slug":"business-valuation","term":"Business valuation","url":"https://www.capbench.com/glossary/business-valuation"},{"slug":"due-diligence","term":"Due diligence","url":"https://www.capbench.com/glossary/due-diligence"},{"slug":"fair-market-value","term":"Fair market value","url":"https://www.capbench.com/glossary/fair-market-value"}],"related_questions":[{"question":"What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?","url":"https://www.capbench.com/sba-7a/questions/what-are-the-key-distinctions-between-cross-purchase-and-entity-purchase-buy-sell-agreemen"},{"question":"What distinguishes a cross-purchase from an entity-purchase buy-sell agreement regarding life insurance?","url":"https://www.capbench.com/sba-7a/questions/what-distinguishes-a-cross-purchase-from-an-entity-purchase-buy-sell-agreement-regarding-l"},{"question":"What documentation is required to request a guaranty purchase using the Universal Purchase Package (UPP)?","url":"https://www.capbench.com/for-lenders/questions/what-documentation-is-required-to-request-a-guaranty-purchase-using-the-universal-purchase"},{"question":"What specific documentation must a lender include in a Universal Purchase Package (UPP) for a guaranty purchase?","url":"https://www.capbench.com/for-lenders/questions/what-specific-documentation-must-a-lender-include-in-a-universal-purchase-package-upp-for-"},{"question":"What documentation is required for a lender to request a guaranty purchase using the Universal Purchase Package (UPP)?","url":"https://www.capbench.com/for-lenders/questions/what-documentation-is-required-for-a-lender-to-request-a-guaranty-purchase-using-the-unive"},{"question":"What are the key elements a lender must include in a Universal Purchase Package (UPP) submission for guaranty purchase?","url":"https://www.capbench.com/for-lenders/questions/what-are-the-key-elements-a-lender-must-include-in-a-universal-purchase-package-upp-submis"}]},"caveats":["Definitions represent CapBench's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"CapBench Glossary — Bargain purchase","url":"https://www.capbench.com/glossary/bargain-purchase","source_type":"CapBench Data"}}