Glossary · Doing the deal
Indemnification agreement
In short
A contract where one party agrees to compensate another for certain losses or damages. This protects you from financial repercussions caused by issues arising from the seller's period of ownership.
What it means in a deal
This agreement is critical. It defines what the seller will cover if problems emerge post-closing that relate to their time owning the business, like undisclosed liabilities or tax issues. Negotiate indemnification carefully to ensure adequate protection and survival periods.
Related terms
Common questions about Indemnification agreement
- What if a franchise agreement contains provisions for indemnification that concern the SBA?
- 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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