Glossary · People and paperwork
Buy-Sell Agreement
In short
The primary legal contract outlining the terms and conditions of the business acquisition, including purchase price, assets being bought, and closing contingencies. This is the cornerstone of your deal.
What it means in a deal
This document, also known as a Purchase Agreement or Asset Purchase Agreement, is thoroughly reviewed by your lender and legal counsel. It must clearly define the assets and liabilities being transferred, allocate the purchase price, and specify conditions precedent to closing, aligning with SBA requirements.
Related terms
Common questions about Buy-Sell Agreement
- How does life insurance effectively fund a business buy-sell agreement?
- What distinguishes a cross-purchase from an entity-purchase buy-sell agreement regarding life insurance?
- What role does life insurance play in funding a buy-sell agreement for business partners?
- Who typically pays the premiums for life insurance policies used to fund a buy-sell agreement?
- What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?
- What happens to my personal guaranty obligation if I later sell the business?
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.
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