{"ok":true,"canonical_url":"https://dealroom.so/glossary/debt-compromise","api_url":"https://dealroom.so/api/public/glossary/debt-compromise","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":"debt-compromise","term":"Debt compromise","group":"Doing the deal","definition":"Debt compromise is an agreement where a lender accepts a lower amount than what is originally owed to settle a debt. If the business you're buying has outstanding debts, a compromise might reduce your inherited liabilities.","what_it_means":"When acquiring a business with significant outstanding debt, especially if it's underperforming, you might negotiate a debt compromise with existing creditors. This can significantly reduce the liabilities you take on, improving the deal's financial viability. However, it requires careful negotiation and a clear plan for the business's future.","url":"https://dealroom.so/glossary/debt-compromise","official_sources":[],"related":[{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"},{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"liquidation-plan","term":"Liquidation Plan","url":"https://dealroom.so/glossary/liquidation-plan"},{"slug":"loan-agreement","term":"Loan agreement","url":"https://dealroom.so/glossary/loan-agreement"}],"related_questions":[{"question":"What is the specific lender process for obtaining SBA approval for a debt compromise offer from a borrower in liquidation?","url":"https://dealroom.so/for-lenders/questions/what-is-the-specific-lender-process-for-obtaining-sba-approval-for-a-debt-compromise-offer"},{"question":"What is the process for a 7(a) lender to obtain SBA approval for a debt compromise offer with a borrower in liquidation?","url":"https://dealroom.so/for-lenders/questions/what-is-the-process-for-a-7-a-lender-to-obtain-sba-approval-for-a-debt-compromise-offer-wi"},{"question":"How is prior owner debt converted to equity treated for injection purposes?","url":"https://dealroom.so/for-lenders/questions/how-is-prior-owner-debt-converted-to-equity-treated-for-injection-purposes"},{"question":"Can I use an SBA 7(a) loan to refinance existing business debt?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-refinance-existing-business-debt"},{"question":"Can an SBA 7(a) loan be used to refinance existing business debt?","url":"https://dealroom.so/sba-loans/basics/can-an-sba-7-a-loan-be-used-to-refinance-existing-business-debt"},{"question":"Can I use an SBA 7(a) loan to pay off personal debt?","url":"https://dealroom.so/sba-loans/basics/can-i-use-an-sba-7-a-loan-to-pay-off-personal-debt"}]},"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 — Debt compromise","url":"https://dealroom.so/glossary/debt-compromise","source_type":"DealRoom Data"}}