{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-factors-should-a-lender-assess-regarding-a-seller-s-post-closing-consulting-agreement","api_url":"https://dealroom.so/api/public/questions/what-factors-should-a-lender-assess-regarding-a-seller-s-post-closing-consulting-agreement","question":"What factors should a lender assess regarding a seller's post-closing consulting agreement in a change of ownership?","topic":"Change-of-ownership underwriting","audience":"lender","bot_mode":"lender","short_answer":"Lenders must ensure a seller's post-closing consulting agreement is for a reasonable duration and compensation, does not imply retained control, and does not interfere with the buyer's independent management.","rule":"While a seller can assist with transition post-closing, the consulting agreement must be bona fide and not grant the seller undue influence or control over the business. The term and compensation must be market-rate and not excessively long, preventing the appearance of the seller retaining de facto ownership or management control, which could affect affiliation and eligibility.","example":"A seller agrees to a 12-month consulting agreement for $5,000 per month after selling their business via a 7(a) loan. The lender reviews the agreement to ensure the scope of services is clearly defined, compensation is reasonable for the industry, and it contains no provisions that would allow the seller to dictate operational decisions or retain control.","what_lenders_check":"Lenders worry that disguised seller control through a consulting agreement could undermine the buyer's ownership and management, or trigger affiliation issues, jeopardizing eligibility. Any such agreement must be clearly documented and reviewed for compliance.","required_facts":["Consulting duration","Compensation reasonableness","Retained control risk","Buyer independence"],"source_families":["SOP 50 10 - Lender and Development Company Loan Programs","13 CFR Part 120 - Business Loans"],"official_sources":[{"title":"SOP 50 10 - Lender and Development Company Loan Programs","url":"https://www.sba.gov/sites/default/files/2025-05/SOP%2050%2010%208%20Technical%20Updates%20effective%206.1.2025.docx"},{"title":"13 CFR Part 120 - Business Loans","url":"https://www.ecfr.gov/current/title-13/chapter-I/part-120"}],"related_questions":[{"question":"How does a lender evaluate the reasonableness of a business purchase price when the seller note is fully subordinated?","url":"https://dealroom.so/for-lenders/questions/how-does-a-lender-evaluate-the-reasonableness-of-a-business-purchase-price-when-the-seller"},{"question":"What are the specific requirements for valuing inventory and equipment in a business acquisition for a 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/what-are-the-specific-requirements-for-valuing-inventory-and-equipment-in-a-business-acqui"},{"question":"When is an independent business appraisal mandatory for a 7(a) loan financing a business acquisition with a purchase price over $500,000?","url":"https://dealroom.so/for-lenders/questions/when-is-an-independent-business-appraisal-mandatory-for-a-7-a-loan-financing-a-business-ac"},{"question":"How does the SBA view a change of ownership where the new owner has no prior industry experience?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-view-a-change-of-ownership-where-the-new-owner-has-no-prior-industry-expe"},{"question":"Is an independent business appraisal required for a 7(a) loan financing a business acquisition with a purchase price exactly $500,000?","url":"https://dealroom.so/for-lenders/questions/is-an-independent-business-appraisal-required-for-a-7-a-loan-financing-a-business-acquisit"},{"question":"When must a lender require an independent business valuation for a change of ownership 7(a) loan, and what are the specific thresholds?","url":"https://dealroom.so/for-lenders/questions/when-must-a-lender-require-an-independent-business-valuation-for-a-change-of-ownership-7-a"}],"related_terms":[{"term":"Post-Closing Consulting Agreement","url":"https://dealroom.so/glossary/post-closing-consulting-agreement"},{"term":"Seller Consulting Agreement","url":"https://dealroom.so/glossary/seller-consulting-agreement"},{"term":"Post-Closing","url":"https://dealroom.so/glossary/post-closing"},{"term":"Consulting agreement","url":"https://dealroom.so/glossary/consulting-agreement"},{"term":"Post-closing procedure","url":"https://dealroom.so/glossary/post-closing-procedure"},{"term":"Post-closing event","url":"https://dealroom.so/glossary/post-closing-event"}],"related_tools":[{"name":"SBA 7(a) payment & fee calculator","url":"https://dealroom.so/sba-7a/calculator"},{"name":"Find an active SBA 7(a) lender","url":"https://dealroom.so/lenders"}],"data_freshness":{"last_reviewed":"2026-06-13","sba_rule_sources_checked_through":"2026-06-13"},"citation":{"label":"DealRoom.so SBA 7(a) Q&A","url":"https://dealroom.so/for-lenders/questions/what-factors-should-a-lender-assess-regarding-a-seller-s-post-closing-consulting-agreement","source_type":"DealRoom Q&A"},"caveats":["Grounded in the current SBA rulebook; verify against official sources before relying on it for a live deal.","Not legal, tax, or financial advice and not an approval decision."]}