Working capital + transition consulting agreement

What it is

The written agreement covering both pieces of the closing handoff: the working capital target the seller must deliver (see the working capital peg guide for how that's calculated), and any paid consulting arrangement for the seller's post-close help. Verbal promises — "I'll help however you need" — rarely survive contact with reality once the seller has been paid and moved on.

Why it matters

A written consulting agreement sets real expectations: defined hours, defined compensation, a defined end date, and what happens if either side isn't satisfied. It also matters to your lender — a consulting role that gives the seller ongoing control rather than a genuine wind-down can raise eligibility questions with an SBA lender, so it's worth confirming the structure directly with your lender rather than assuming any arrangement is fine.

What to look for

• No written consulting agreement — just a verbal understanding
• Vague scope ("reasonable assistance") with no defined hours or duration
• Consulting fees structured in a way that could create a tax problem or an SBA eligibility question
• No clear exit clause if the arrangement isn't working for either side