{"ok":true,"canonical_url":"https://dealroom.so/glossary/commercially-reasonable-efforts","api_url":"https://dealroom.so/api/public/glossary/commercially-reasonable-efforts","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":"commercially-reasonable-efforts","term":"Commercially Reasonable Efforts","group":"Doing the deal","definition":"This is a legal standard requiring parties to a contract to make genuine, good-faith efforts to fulfill their obligations without going to extreme lengths or incurring unreasonable costs. It protects both buyer and seller.","what_it_means":"You'll see this phrase in the LOI and purchase agreement, often regarding obtaining financing or securing necessary third-party consents. It means you can't just passively wait for an SBA loan; you must actively pursue it. If a party fails to meet this standard, it could be a breach of contract.","url":"https://dealroom.so/glossary/commercially-reasonable-efforts","official_sources":[],"related":[{"slug":"loi","term":"LOI","url":"https://dealroom.so/glossary/loi"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"},{"slug":"underwriting","term":"Underwriting","url":"https://dealroom.so/glossary/underwriting"}],"related_questions":[{"question":"What constitutes \"commercially reasonable\" efforts by a lender in liquidating collateral for a defaulted 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-commercially-reasonable-efforts-by-a-lender-in-liquidating-collateral-for"},{"question":"What specific documentation is required for a lender to prove 'commercially reasonable' disposition of collateral during 7(a) loan liquidation?","url":"https://dealroom.so/for-lenders/questions/what-specific-documentation-is-required-for-a-lender-to-prove-commercially-reasonable-disp"},{"question":"When a lender is liquidating collateral for a 7(a) loan, what are the specific requirements for proving \"commercially reasonable\" disposition?","url":"https://dealroom.so/for-lenders/questions/when-a-lender-is-liquidating-collateral-for-a-7-a-loan-what-are-the-specific-requirements-"},{"question":"What constitutes diligent liquidation efforts a lender must demonstrate before submitting a guaranty purchase request?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-diligent-liquidation-efforts-a-lender-must-demonstrate-before-submitting-"},{"question":"What minimum collection efforts must a lender demonstrate before submitting a 7(a) liquidation plan?","url":"https://dealroom.so/for-lenders/questions/what-minimum-collection-efforts-must-a-lender-demonstrate-before-submitting-a-7-a-liquidat"},{"question":"How does the SBA ensure the valuation of goodwill is reasonable for an acquisition loan?","url":"https://dealroom.so/sba-7a/questions/how-does-the-sba-ensure-the-valuation-of-goodwill-is-reasonable-for-an-acquisition-loan"}]},"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 — Commercially Reasonable Efforts","url":"https://dealroom.so/glossary/commercially-reasonable-efforts","source_type":"DealRoom Data"}}