{"ok":true,"canonical_url":"https://dealroom.so/glossary/material-adverse-change","api_url":"https://dealroom.so/api/public/glossary/material-adverse-change","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":"material-adverse-change","term":"Material adverse change","group":"Doing the deal","definition":"This is a significant negative event or change affecting the business between the time you sign the LOI and closing. As a buyer, it gives you grounds to renegotiate or walk away from the deal.","what_it_means":"Your purchase agreement will likely include a MAC clause. This protects you if, for example, a major customer leaves or a lawsuit emerges post-LOI. Monitor the business closely during due diligence and up to closing to ensure no material adverse changes occur that would impact your valuation or ability to operate.","url":"https://dealroom.so/glossary/material-adverse-change","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":"business-valuation","term":"Business valuation","url":"https://dealroom.so/glossary/business-valuation"},{"slug":"commitment-letter","term":"Commitment Letter","url":"https://dealroom.so/glossary/commitment-letter"}],"related_questions":[{"question":"What constitutes a 'material adverse change' that could affect my loan approval after application?","url":"https://dealroom.so/sba-7a/questions/what-constitutes-a-material-adverse-change-that-could-affect-my-loan-approval-after-applic"},{"question":"What constitutes a \"material adverse change\" in a borrower's financial condition that requires lender action prior to closing?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-a-material-adverse-change-in-a-borrower-s-financial-condition-that-requir"},{"question":"Can a lender approve a material change to collateral without prior SBA approval?","url":"https://dealroom.so/for-lenders/questions/can-a-lender-approve-a-material-change-to-collateral-without-prior-sba-approval"},{"question":"What constitutes a \"material change\" to a 7(a) loan that requires prior SBA approval during servicing?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-a-material-change-to-a-7-a-loan-that-requires-prior-sba-approval-during-s"},{"question":"What defines a \"material change\" to collateral that requires prior SBA approval for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-defines-a-material-change-to-collateral-that-requires-prior-sba-approval-for-a-7-a-lo"},{"question":"What constitutes a 'material change' to a 7(a) loan that always requires prior SBA approval during servicing?","url":"https://dealroom.so/for-lenders/questions/what-constitutes-a-material-change-to-a-7-a-loan-that-always-requires-prior-sba-approval-d"}]},"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 — Material adverse change","url":"https://dealroom.so/glossary/material-adverse-change","source_type":"DealRoom Data"}}