Glossary · People and paperwork
Non-compliance
In short
Failure to adhere to applicable laws, regulations, or contractual obligations. This can result in fines, penalties, or legal action against the business.
What it means in a deal
Discovering a history of non-compliance, whether with environmental regulations, labor laws, or industry-specific rules, poses a significant risk. Your due diligence must identify any past or ongoing issues, as you will inherit these liabilities. Factor in potential costs to bring the business into compliance.
Official sources
SOP 50 10 — Lender and Development Company Loan Programs
U.S. Small Business Administration · SBA Standard Operating Procedure
Last checked 2026-06-15. Official sources control — verify before relying on any rule for a live deal.
Related terms
Common questions about Non-compliance
- What constitutes 'material non-compliance' with SBA lending policies that typically leads to a guaranty repair or denial?
- What constitutes 'material non-compliance' by a lender during underwriting or closing that could result in a repair to the 7(a) guaranty?
- What specific underwriting failures or omissions by a lender are categorized as 'material non-compliance' by the SBA, risking 7(a) guaranty repair or denial?
- How does SBA Form 1919 ensure borrower eligibility compliance for a 7(a) loan?
- Does an SBA 7(a) loan require specific reporting or compliance after I receive the funds?
- What if the business I'm buying has a history of environmental violations or ongoing compliance issues?
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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