Glossary · Doing the deal
Closing Conditions
In short
These are specific requirements that must be satisfied by both buyer and seller before the acquisition can be finalized. They ensure all parties meet their obligations and protect against unforeseen issues.
What it means in a deal
Your Letter of Intent (LOI) and purchase agreement will outline critical Closing Conditions, such as completing due diligence, obtaining all necessary third-party consents (e.g., landlord, franchise), and securing the 7(a) loan approval. If any condition isn't met, either party can typically terminate the deal without penalty. They are essentially Conditions Precedent.
Related terms
Common questions about Closing Conditions
- What are the specific conditions for an acceptable full standby agreement?
- What specific conditions trigger affiliation due to contractual relationships or franchise agreements?
- What is required if the $0-down partner buyout conditions are not met?
- Under what conditions can a seller note on full standby be repaid early?
- Under what specific conditions does the SBA impose a prepayment penalty on 7(a) loans?
- What specific conditions trigger the requirement for a corporate guaranty in addition to personal guarantees?
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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