The Small Business Administration (SBA) purchase agreement is a legally binding contract between a buyer and seller of a small business that has been financed by the SBA. It outlines the terms and conditions of the sale, including the purchase price, payment terms, and any contingencies.
The SBA purchase agreement is a vital document that protects the rights of both parties and ensures that the sale is carried out in a fair and transparent manner. As such, it is important that the agreement is drafted carefully and reviewed by legal professionals.
One of the most important aspects of the SBA purchase agreement is the purchase price. This is typically based on the value of the assets being sold, including tangible assets such as equipment and inventory, as well as intangible assets such as goodwill and intellectual property. The agreement should also detail any liabilities that the buyer will assume as part of the sale.
Payment terms are another important component of the SBA purchase agreement. This may include a down payment and installment payments over a specified period of time. The agreement may also include an interest rate and penalties for late payments.
Contingencies are provisions included in the agreement that must be met before the sale can be completed. For example, the buyer may require that the seller provide a certain level of training or support after the sale, or that certain financial targets are met before the sale is finalised.
Overall, the SBA purchase agreement is a crucial document that can help ensure a successful sale of a small business. It is important to work with experienced legal professionals to ensure that the agreement is crafted with care, and that all parties are protected.
