For SBA lenders
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If a seller withdraws, the loan application effectively terminates, as the underlying transaction is no longer valid.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.
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.
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.
Insider move
The lender must act promptly upon notification of a withdrawn sale.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.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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