Glossary · People and paperwork
Consignment Agreement
In short
This is a formal contract outlining the terms between a consignor (owner) and a consignee (seller) for goods sold on consignment.
What it means in a deal
If the business you're buying deals with consignment, carefully review all consignment agreements during due diligence. Understand payment terms, return policies, and ownership clauses. These agreements can affect the business's cash flow, inventory risk, and potential liabilities, so ensure they are favorable or manageable.
Related terms
Common questions about Consignment Agreement
- What if a business seeking a 7(a) loan derives a significant portion of its revenue from selling products on consignment?
- How does life insurance effectively fund a business buy-sell agreement?
- How does the purchase agreement structure affect an SBA partner buyout?
- How does an operating agreement impact an SBA partner buyout loan?
- What happens if the seller terminates the purchase agreement mid-process?
- What are the specific conditions for an acceptable full standby agreement?
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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