Financing contingency

Definition

The clause letting a buyer walk, deposit intact, if the loan does not come.

Why It Matters

It is the single term that decides who carries the risk of a bank saying no, and on an SBA deal the bank says no often enough to matter. Without it, a lender declining after your deposit is committed can cost you the deposit and leave you arguing about whose fault the decline was. Sellers resist a contingency with no end date, so the negotiation is usually about its length rather than its existence: name the number of days, name what counts as satisfying it, and keep the clock long enough for a real underwrite.

In numbers: A 45-day financing contingency on a deal with a $30,000 deposit is what makes that deposit refundable when the bank declines in week six.