Glossary · Doing the deal
In short
A clause in a contract that limits a party's actions, such as a non-compete agreement preventing the seller from opening a similar business nearby. These protect your newly acquired business.
In an acquisition, common restrictive covenants include non-compete clauses, non-solicitation clauses (preventing the seller from poaching employees or customers), and confidentiality agreements. These are crucial for protecting the goodwill and value you're purchasing. Ensure these covenants are clearly defined, reasonable in scope and duration, and enforceable.
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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