Glossary · Reading the business
seller liabilities
In short
These are the debts and obligations the seller's business owes to others. As a buyer, you need to know exactly which liabilities you're taking on and which the seller retains, especially in an asset purchase.
What it means in a deal
In an asset purchase, you typically acquire specific assets and assume only explicitly agreed-upon liabilities. Any undisclosed or unassumed liabilities remain with the seller. Your due diligence must uncover all potential liabilities, including outstanding debts, legal claims, and unpaid taxes, to avoid inheriting problems.
Related terms
Common questions about seller liabilities
- Can unreported tax liabilities discovered during due diligence from the seller's business kill my acquisition loan?
- If the seller has outstanding federal tax liabilities that will not be paid at closing, will this prevent loan approval?
- What due diligence must a lender perform regarding the seller's existing debt and liabilities in a 7(a) business acquisition?
- What happens if the business being acquired has significant outstanding tax liabilities at closing?
- What if the business I want to acquire has undisclosed liabilities discovered during due diligence?
- Does finding significant undisclosed liabilities during due diligence kill an SBA 7(a) acquisition 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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