Dual‑Agent Broker in CA Omitted Buyer Divorce — SBA Delay. Options?

January 17, 2026

by an intermediary from University of Utah - David Eccles School of Business in Mountain View, CA, USA

Selling a business in California with a broker who is representing both sides. I recently discovered on my own (and haven’t told the broker or buyer yet) that one of the buyers is going through a divorce. This was never disclosed to me, and it’s now causing a 1–2 month delay in the SBA loan process. I still want the deal to close, but I’m concerned that a material fact was withheld in a dual‑agency situation. -Does a dual‑agent broker have a duty to disclose something like this? -What recourse does a seller have when key information is omitted but they still want the transaction to proceed? -Is it reasonable to ask the broker to adjust their commission or otherwise make things right? Looking for guidance from anyone who has dealt with similar nondisclosure issues in SBA‑backed deals. Thank you!

Reply by an intermediary
in Philadelphia, PA, USA

Hi. From my limited experience in CA transaction. This is what I can say though, In CA dual-agency, a broker’s duty to disclose generally applies to material facts that affect deal execution, not every personal circumstance. That said, once a buyer issue directly causes an SBA delay, it becomes commercially material even if it wasn’t clearly so at the outset. SBA deals are especially sensitive to divorces due to spousal consent, PGs, and asset claims, which is why these delays are unfortunately common. Still wanting to close though, the most practical path is to: document the delay, tighten outside dates, and ask the broker to share in the cost via a fee adjustment or credit. This is one of the reason why many sellers and operators are increasingly prioritizing non-SBA capital structures to reduce execution risk tied to personal underwriting variables and keep transactions on timeline when certainty matters more than price. I hope you find this helpful.

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

From a lender perspective you likely have a serious issue here that is going to need to be addressed. Typically speaking lenders are not going to close on a new loan to a borrower going through a divorce. The reason is they do not know what impact that divorce is ultimately going to have related to on-going spousal support, child support, and division of assets. Typically not until a divorce decree has been approved by the court and a lender can see the actual break-out of assets and liabilities, then determine the deal still qualifies once those items are factored in, will a lender move forward. Depending on where the seller is at in the process this could take a few weeks to many months. Just providing you a heads up. If you want to discuss it from the lender side, you can reach me here or directly at redacted

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