{"ok":true,"canonical_url":"https://dealroom.so/glossary/adequate-consideration","api_url":"https://dealroom.so/api/public/glossary/adequate-consideration","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"adequate-consideration","term":"Adequate consideration","group":"Doing the deal","definition":"This means there's a fair and reasonable exchange of value in a contract or transaction. It's crucial for ensuring the legality and enforceability of agreements.","what_it_means":"When structuring your deal, especially with non-competes or consulting agreements, ensure the value exchanged for these promises is clearly documented and considered fair by all parties. This prevents later legal challenges claiming the agreement lacked proper consideration, which could invalidate it.","url":"https://dealroom.so/glossary/adequate-consideration","official_sources":[],"related":[{"slug":"non-compete","term":"Non-compete","url":"https://dealroom.so/glossary/non-compete"},{"slug":"arm-s-length","term":"Arm's length","url":"https://dealroom.so/glossary/arm-s-length"},{"slug":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"fair-market-value","term":"Fair market value","url":"https://dealroom.so/glossary/fair-market-value"}],"related_questions":[{"question":"If the acquired business has minimal hard assets, how does the SBA ensure adequate collateral?","url":"https://dealroom.so/sba-7a/questions/if-the-acquired-business-has-minimal-hard-assets-how-does-the-sba-ensure-adequate-collater"},{"question":"Can an SBA 7(a) loan be denied if the seller refuses to provide adequate financial disclosures during due diligence?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-denied-if-the-seller-refuses-to-provide-adequate-financial-disclosu"},{"question":"What specific considerations apply to valuing goodwill and intangible assets in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/what-specific-considerations-apply-to-valuing-goodwill-and-intangible-assets-in-a-7-a-chan"},{"question":"What are the key considerations for a lender when approving a material change in the borrower's business entity structure (e.g., sole proprietorship to LLC) during servicing?","url":"https://dealroom.so/for-lenders/questions/what-are-the-key-considerations-for-a-lender-when-approving-a-material-change-in-the-borro"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Adequate consideration","url":"https://dealroom.so/glossary/adequate-consideration","source_type":"DealRoom Data"}}