Glossary · Reading the business
Existing Litigation
In short
These are active lawsuits or legal disputes involving the business you intend to buy. Unresolved litigation can pose significant financial risks and liabilities, potentially impacting the business's value and your ability to get an SBA loan.
What it means in a deal
During due diligence, you must uncover any existing litigation. Review court records, speak with the seller's attorney, and assess potential outcomes and costs. Significant or unresolved lawsuits can make a business ineligible for an SBA loan or require specific indemnifications in your purchase agreement to protect you post-acquisition.
Related terms
Common questions about Existing Litigation
- What if the business I'm acquiring has existing litigation or legal disputes?
- What if the business I'm buying has existing legal disputes or pending litigation?
- How do past civil litigation or judgments impact my SBA 7(a) loan approval?
- What if the business I want to buy has pending litigation or unresolved legal claims?
- Can an SBA 7(a) loan be used to acquire an existing business with existing business debt?
- Can existing equity from another business I own count towards my injection?
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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