Glossary · Doing the deal
In short
A payoff letter is a formal document from a lender stating the exact amount needed to fully repay a loan on a specific date. This is critical for closing an acquisition.
When buying a business with existing debt, you'll need payoff letters for all outstanding loans that the seller is obligated to clear. Your closing attorney uses these letters to ensure all seller-side liens are satisfied and released at closing, allowing for a clean transfer of assets.
Defined by DealRoom.so SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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