{"ok":true,"canonical_url":"https://dealroom.so/glossary/existing-litigation","api_url":"https://dealroom.so/api/public/glossary/existing-litigation","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":"existing-litigation","term":"Existing Litigation","group":"Reading the business","definition":"These are active lawsuits or legal disputes involving the business you intend to buy. Unresolved litigation can pose significant financial risks and liabilities, potentially impacting the business's value and your ability to get an SBA loan.","what_it_means":"During due diligence, you must uncover any existing litigation. Review court records, speak with the seller's attorney, and assess potential outcomes and costs. Significant or unresolved lawsuits can make a business ineligible for an SBA loan or require specific indemnifications in your purchase agreement to protect you post-acquisition.","url":"https://dealroom.so/glossary/existing-litigation","official_sources":[],"related":[{"slug":"potential-liabilities","term":"Potential Liabilities","url":"https://dealroom.so/glossary/potential-liabilities"},{"slug":"due-diligence","term":"Due diligence","url":"https://dealroom.so/glossary/due-diligence"},{"slug":"liability","term":"Liability","url":"https://dealroom.so/glossary/liability"},{"slug":"material-information","term":"Material information","url":"https://dealroom.so/glossary/material-information"}],"related_questions":[{"question":"What if the business I'm acquiring has existing litigation or legal disputes?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-acquiring-has-existing-litigation-or-legal-disputes"},{"question":"What if the business I'm buying has existing legal disputes or pending litigation?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-m-buying-has-existing-legal-disputes-or-pending-litigation"},{"question":"How do past civil litigation or judgments impact my SBA 7(a) loan approval?","url":"https://dealroom.so/sba-7a/questions/how-do-past-civil-litigation-or-judgments-impact-my-sba-7-a-loan-approval"},{"question":"What if the business I want to buy has pending litigation or unresolved legal claims?","url":"https://dealroom.so/sba-7a/questions/what-if-the-business-i-want-to-buy-has-pending-litigation-or-unresolved-legal-claims"},{"question":"Can an SBA 7(a) loan be used to acquire an existing business with existing business debt?","url":"https://dealroom.so/sba-7a/questions/can-an-sba-7-a-loan-be-used-to-acquire-an-existing-business-with-existing-business-debt"},{"question":"Can existing equity from another business I own count towards my injection?","url":"https://dealroom.so/sba-7a/questions/can-existing-equity-from-another-business-i-own-count-towards-my-injection"}]},"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 — Existing Litigation","url":"https://dealroom.so/glossary/existing-litigation","source_type":"DealRoom Data"}}