Glossary · Doing the deal
Conditions precedent to closing
In short
These are specific requirements that must be met by both the buyer and seller before the deal can officially close. They protect both parties by ensuring all agreed-upon terms are satisfied.
What it means in a deal
Your loan agreement and purchase agreement will list several conditions precedent. These often include obtaining all necessary third-party consents (like landlord approval), completing due diligence to satisfaction, securing all required insurance policies, and ensuring no material adverse changes have occurred to the business. You must track these closely to avoid closing delays.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Conditions precedent to closing
- What if a loan authorization requires a specific condition precedent to closing that is not met?
- What specific conditions trigger affiliation due to contractual relationships or franchise agreements?
- What specific conditions trigger the requirement for a corporate guaranty in addition to personal guarantees?
- What specific conditions make a seller's standby note eligible to count towards my equity injection?
- What specific conditions must a seller note meet to be considered "full standby" for equity injection?
- What conditions must be met to use an SBA 7(a) loan for refinancing existing business debt?
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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