Glossary · People and paperwork
Contract term
In short
This specifies the duration or specific conditions that govern a legal agreement, such as a lease, supply agreement, or the purchase agreement itself.
What it means in a deal
During due diligence, meticulously review all key contract terms to identify any hidden liabilities, renewal clauses, or change of ownership provisions. Your attorney should flag any terms that could negatively impact the business post-acquisition or violate loan covenants.
Related terms
Common questions about Contract term
- How does a lender determine affiliation when a prior owner retains less than 20% equity and a consulting contract?
- When can a lender approve a short-term deferment or modification of a 7(a) loan's payment terms without prior SBA consent?
- Can an SBA 7(a) loan finance tenant improvements on leased property if the lease term matches the loan term?
- If I am buying a business that leases its property, can I get a longer loan term if the lease is long-term?
- What is the typical repayment term for working capital only?
- What happens if the seller terminates the purchase agreement mid-process?
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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