Glossary · Doing the deal
Fallback Provisions
In short
Contingency plans or alternative arrangements built into a deal or loan agreement to address specific risks or potential failures. These protect you if certain conditions aren't met.
What it means in a deal
In complex deals, fallback provisions might address scenarios like a key supplier contract falling through, or the business not performing as projected post-acquisition. For SBA loans, this could refer to backup collateral or alternative repayment structures if the primary plan fails. Always consider what happens if things don't go as planned.
Related terms
Common questions about Fallback Provisions
- What if a franchise agreement contains provisions for indemnification that concern the SBA?
- How does the SBA evaluate a franchise agreement not on the directory for acceptable franchisor control provisions?
- What specific provisions in a franchise agreement, if present, would render a franchise ineligible for 7(a) financing?
- How does a lender determine if a franchise agreement contains impermissible control provisions not listed on the Directory?
- Which specific provisions in a franchise agreement raise red flags for undue franchisor control, making it ineligible for a 7(a) loan?
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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