Glossary · Doing the deal
Purchase agreement
In short
The legally binding contract detailing all terms and conditions of a business acquisition, signed by both buyer and seller. Buyers care because this document dictates exactly what you're buying, for how much, and under what conditions.
What it means in a deal
This is the critical document for your SBA lender, as it outlines the deal's structure, including asset purchase or stock purchase, purchase price allocation, and any seller financing. Work with legal counsel to ensure it protects your interests and aligns with SBA eligibility rules before signing.
Related terms
Common questions about Purchase agreement
- What distinguishes a cross-purchase from an entity-purchase buy-sell agreement regarding life insurance?
- How does the purchase agreement structure affect an SBA partner buyout?
- What happens if the seller terminates the purchase agreement mid-process?
- What are the key distinctions between cross-purchase and entity-purchase buy-sell agreements?
- Can an earn-out provision in the purchase agreement affect my SBA 7(a) loan approval?
- Can an earn-out provision in a purchase agreement affect 7(a) loan eligibility or structure?
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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