Glossary · Doing the deal
Conditions Precedent
In short
These are specific events or actions that must occur before another action (like Closing) can take place or a contract becomes binding. They protect both buyer and seller.
What it means in a deal
In a business acquisition, Conditions Precedent are vital. For example, obtaining 7(a) loan approval, completing satisfactory Due Diligence, or securing a new lease agreement are common conditions. Both parties must satisfy these before the deal can progress to Closing. They are synonymous with Closing Conditions.
Related terms
Common questions about Conditions Precedent
- What if a loan authorization requires a specific condition precedent to closing that is not met?
- 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?
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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