{"ok":true,"canonical_url":"https://dealroom.so/glossary/demand-letters","api_url":"https://dealroom.so/api/public/glossary/demand-letters","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":"demand-letters","term":"Demand Letters","group":"Doing the deal","definition":"These are formal notices from a creditor requesting payment for a defaulted debt. They precede legal action and are a critical step in debt collection.","what_it_means":"If the business you're buying has outstanding debts, especially to the seller, your lender will want to see these issued and resolved. Ensure all seller-held debts are either paid off at closing or properly subordinated with a standby agreement to protect your business.","url":"https://dealroom.so/glossary/demand-letters","official_sources":[],"related":[{"slug":"loan-default","term":"Loan default","url":"https://dealroom.so/glossary/loan-default"},{"slug":"subordinated-debt","term":"Subordinated Debt","url":"https://dealroom.so/glossary/subordinated-debt"},{"slug":"standby-agreement","term":"Standby agreement","url":"https://dealroom.so/glossary/standby-agreement"},{"slug":"seller-note","term":"Seller note","url":"https://dealroom.so/glossary/seller-note"}],"related_questions":[]},"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 — Demand Letters","url":"https://dealroom.so/glossary/demand-letters","source_type":"DealRoom Data"}}