Glossary · Doing the deal
Bargain purchase
In short
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 in a deal
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.
Related terms
Common questions about Bargain purchase
- What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?
- What distinguishes a cross-purchase from an entity-purchase buy-sell agreement regarding life insurance?
- What documentation is required to request a guaranty purchase using the Universal Purchase Package (UPP)?
- What specific documentation must a lender include in a Universal Purchase Package (UPP) for a guaranty purchase?
- What documentation is required for a lender to request a guaranty purchase using the Universal Purchase Package (UPP)?
- What are the key elements a lender must include in a Universal Purchase Package (UPP) submission for guaranty purchase?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.