{"ok":true,"canonical_url":"https://dealroom.so/for-lenders/questions/what-happens-if-a-seller-withdraws-from-the-sale-agreement-during-the-sba-loan-underwritin","api_url":"https://dealroom.so/api/public/questions/what-happens-if-a-seller-withdraws-from-the-sale-agreement-during-the-sba-loan-underwritin","question":"What happens if a seller withdraws from the sale agreement during the SBA loan underwriting process?","topic":"Change-of-ownership underwriting","audience":"lender","bot_mode":"lender","short_answer":"If a seller withdraws, the loan application effectively terminates, as the underlying transaction is no longer valid. The lender must cease processing and inform the SBA.","rule":"An SBA loan for a business acquisition is entirely dependent on the underlying purchase agreement. If the seller withdraws, there is no longer a business to acquire, rendering the loan application null and void. The lender cannot proceed without a valid, executed purchase agreement.","example":"During underwriting for a $1 million acquisition, the seller notifies the buyer and lender that they are no longer selling the business. The lender immediately stops processing the loan, informs the SBA, and advises the borrower of the application's termination.","what_lenders_check":"The lender must act promptly upon notification of a withdrawn sale. Continuing to process a loan for a defunct transaction wastes resources and creates administrative issues. Proper communication with the borrower and SBA is essential.","required_facts":["Seller withdrawal","Sale agreement","Underwriting process","Loan termination","Transaction invalid"],"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":"Indemnification from the Seller","url":"https://dealroom.so/glossary/indemnification-from-the-seller"},{"term":"Underwriting process","url":"https://dealroom.so/glossary/underwriting-process"},{"term":"Loan Sale Agreement","url":"https://dealroom.so/glossary/loan-sale-agreement"},{"term":"SBA 7(a) loan","url":"https://dealroom.so/glossary/sba-7-a-loan"},{"term":"Loan underwriting","url":"https://dealroom.so/glossary/loan-underwriting"},{"term":"SBA 7(a) Loan Program","url":"https://dealroom.so/glossary/sba-7-a-loan-program"}],"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-happens-if-a-seller-withdraws-from-the-sale-agreement-during-the-sba-loan-underwritin","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."]}