If you are financing a small-business acquisition with an SBA 7(a) loan, the lender's conditions decide whether the loan funds, and several of them are satisfied by contracts rather than financial statements. Knowing what the lender may ask for before you submit the loan package saves rounds of back-and-forth.
This guide covers the contract side of that diligence: the purchase agreement, seller note, lease, franchise documents, customer agreements, guarantees, and transition agreements. It does not cover the financial diligence, such as the quality-of-earnings review, tax returns, and cash-flow analysis, which belongs to the CPA.
Start with the operative source
SBA publishes SOP 50 10 and its version history. Version 8.1 took effect October 1, 2026, and SBA Information Notice 5000-880695 applies it to applications issued an SBA loan number on or after that date; applications submitted through September 30, 2026 stay under version 8. If your application straddles that date, have the lender confirm in writing which version governs.
The SOP is program policy. It is not a complete list of every document a lender may request. A lender's credit policy, the transaction structure, franchise status, collateral, and discovered risks can add conditions. Ask the lender to label each request as an SBA requirement, lender policy, or deal-specific condition.
Build one requirements record
For every condition, record:
| Field | What to capture |
|---|---|
| Source | SOP version and provision, loan authorization, lender checklist, or commitment letter |
| Owner | Buyer, seller, lender, landlord, franchisor, insurer, or counsel |
| Evidence | Signed agreement, consent, payoff, filing, certificate, schedule, or financial record |
| Deadline | Before underwriting, approval, closing, funding, or post-close |
| Dependency | The other document or consent that must match |
| Status | Open, submitted, accepted, waived in writing, or satisfied |
This prevents a lender request from being misreported as a universal SBA rule and prevents a genuine SOP condition from being treated as optional.
Contract stack to reconcile
Purchase agreement and sources and uses
The purchase price, assumed liabilities, working-capital treatment, seller financing, earnout, escrow, and closing adjustments must reconcile across the purchase agreement and lender's sources-and-uses schedule. Flag any payment obligation that is missing from the lender package or changes required equity.
Seller notes and standby agreements
If a seller note is being counted toward required equity injection under SOP 50 10 8.1, it must be subordinated to the lender and on full standby for the loan term, and it shares a half-of-injection cap with any other standby debt or minority equity. Verify the lender's math and forms. A separate seller note that is not counted as equity can receive different treatment. Do not label every seller note as life-of-loan standby.
Beyond standby treatment, the lender may read the note's subordination to the SBA debt, acceleration triggers, and default terms to confirm they do not conflict with the senior position. If you are relying on the seller note to meet the equity injection, confirm the structure with the lender before signing. See the seller financing note red flags and the SBA seller note standby checklist for the clause-level review.
Lease, assignment, and site control
Identify the premises essential to operations, the remaining term, renewal options, assignment restrictions, change-of-control language, landlord consent, defaults, guarantees, and casualty or condemnation rights. The lender must decide whether the evidence satisfies its credit and collateral requirements. There is no universal lease-term formula stated on this page.
Lease terms that deserve a close read include a short remaining term without renewal options, a landlord consent right broad enough to let the landlord block or re-price the assignment, a new personal guarantee required from the buyer, and relocation, redevelopment, or early-termination rights that could move the business. Landlord timelines sit outside the buyer's and lender's control, so start the consent request as early as the deal allows.
Franchise documents
If the target is a franchise, reconcile the FDD, franchise agreement, transfer documents, franchisor consent, fees, territory, defaults, guarantees, and any SBA franchise review requirement. Use SBA's current franchise directory and program guidance rather than an old third-party list.
Material business contracts
List the customer, supplier, licensing, employment, real-estate, equipment, and technology agreements that affect cash flow or continuity. For each, identify consent, assignment, termination, renewal, pricing, exclusivity, change-of-control, and default terms. The lender decides which contracts are material to underwriting; no customer-concentration percentage is presented here as an SBA threshold.
When a target's revenue depends on a few customers, one termination notice can change the cash flow the loan relies on, so a lender may examine revenue by customer. On the contract side, that means producing the written customer agreements, their remaining terms, renewal mechanics, and whether they survive a change of ownership. A dominant customer on a month-to-month relationship, or a contract that lets the customer terminate on a change of control, can change the lender's view of the deal. Surface the concentration early and bring the supporting contracts.
Seller transition and key people
A small business can depend on a few people, sometimes including the seller. The lender may want comfort that the business runs after closing. On the contract side, that means reading:
- the seller's transition services or consulting agreement for scope, duration, and compensation;
- the seller's non-compete and non-solicitation terms, and whether the governing law will enforce them in a sale of a business;
- employment agreements and any retention incentives for the people the business needs to keep; and
- restrictive covenants in retained employees' agreements, checked against the state where they work.
A seller with no transition obligation and no restrictive covenant is a point a lender may raise, because it bears directly on the cash flow being financed.
Guarantees
Ask the lender which owners must sign a guarantee, what type of guarantee applies, and whether a spouse signature or additional collateral is needed. Confirm the answer against the operative SOP and the loan authorization rather than a summary. Read each guarantee for scope and for any collateral pledged with it, and have your attorney confirm what you are signing before closing.
How lender diligence runs alongside yours
Lender diligence runs in parallel with the buyer's own. After a signed letter of intent and a loan application, the lender may order a business valuation, may require a quality-of-earnings or similar financial review, and collects the contract documents above. The contracts the lender may request, including the lease and landlord consent, customer agreements, seller note, and transition and employment agreements, are the same contracts that decide whether you should close.
The practical step is to assemble the contract package early and review it before the lender does. An issue you find and fix on your own schedule is less likely to appear as a late condition on the lender's schedule.
Questions to send the lender
- Which SOP version governs this application and closing?
- Which conditions are SBA program requirements and which are lender policy?
- Which transaction documents must be final before credit approval and before funding?
- What consents, lien releases, landlord documents, or franchise approvals are required?
- How must each seller note, earnout, or deferred payment appear in sources and uses and cash-flow analysis?
- What change between approval and closing requires re-underwriting or written consent?
Inkvex can organize the uploaded agreements, quote controlling language, and surface mismatches for a first-pass with lender and counsel. It does not determine loan eligibility or lender approval.
Inkvex provides legal information, not legal advice or a lending commitment. Confirm the operative SOP and every lender condition directly before closing.
Create a closing-condition tracker
Turn each lender request into a row with source, operative version, responsible party, document owner, due date, status, and closing consequence. Separate SBA requirements, lender credit conditions, legal-document requirements, and business diligence. This prevents a lender preference from being reported as a universal SBA rule.
Test the tracker against the final purchase price, equity injection, seller financing, working capital, fees, collateral, lease, franchise transfer, insurance, and post-close ownership. When a figure changes, update the sources-and-uses statement and every connected agreement. Preserve written lender decisions and ask which items must be satisfied before authorization, before closing, and after funding.
The review is complete only when the signed transaction stack and approved credit structure reconcile; an AI report or checklist is preparation, not lender approval.
Where this page fits
Use the primary hub for the main workflow, then check the supporting pages that belong to the same diligence lane.
Go deeper
Read the guide, then move into the real workflow, pricing, audience page, and glossary that support the next decision.
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This article is for informational purposes only and does not constitute legal advice. For high-stakes agreements, consult a qualified attorney.