Glossary · Doing the deal
Demand Letters
In short
These are formal notices from a creditor requesting payment for a defaulted debt. They precede legal action and are a critical step in debt collection.
What it means in a deal
If the business you're buying has outstanding debts, especially to the seller, your lender will want to see these issued and resolved. Ensure all seller-held debts are either paid off at closing or properly subordinated with a standby agreement to protect your business.
Related terms
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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