Glossary · Doing the deal
Material adverse change
In short
This is a significant negative event or change affecting the business between the time you sign the LOI and closing. As a buyer, it gives you grounds to renegotiate or walk away from the deal.
What it means in a deal
Your purchase agreement will likely include a MAC clause. This protects you if, for example, a major customer leaves or a lawsuit emerges post-LOI. Monitor the business closely during due diligence and up to closing to ensure no material adverse changes occur that would impact your valuation or ability to operate.
Related terms
Common questions about Material adverse change
- What constitutes a 'material adverse change' that could affect my loan approval after application?
- What constitutes a "material adverse change" in a borrower's financial condition that requires lender action prior to closing?
- Can a lender approve a material change to collateral without prior SBA approval?
- What constitutes a "material change" to a 7(a) loan that requires prior SBA approval during servicing?
- What defines a "material change" to collateral that requires prior SBA approval for a 7(a) loan?
- What constitutes a 'material change' to a 7(a) loan that always requires prior SBA approval during servicing?
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.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.