Glossary · Doing the deal
Closing condition
In short
Requirements that must be met by specific parties before a deal can be finalized. These protect you by ensuring the business is as represented before you transfer funds.
What it means in a deal
These are the "must-dos" before your SBA loan closes, like getting necessary licenses, completing due diligence, or satisfying lender requirements. Track all closing conditions actively; failure to meet them can delay or kill your deal, so assign responsibilities clearly.
Related terms
Common questions about Closing condition
- What if a loan authorization requires a specific condition precedent to closing that is not met?
- What constitutes a "material adverse change" in a borrower's financial condition that requires lender action prior to closing?
- What if a Phase I ESA identifies a Recognized Environmental Condition (REC) but deems it a 'de minimis' condition?
- When is life insurance on key principals a mandatory loan condition?
- What steps should a lender take if a Phase I ESA identifies a Recognized Environmental Condition (REC)?
- When a Phase I Environmental Site Assessment (ESA) identifies a Recognized Environmental Condition (REC), what are the lender's subsequent responsibilities?
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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