Financing risk is the danger that the money funding a deal is not there when completion arrives, or comes with strings that constrain the business afterwards: commitment letters with unmet conditions, covenants that bite under stress, and material-adverse-change clauses that let lenders walk. Boards care because a financing failure between signing and closing can collapse the transaction and expose the buyer to liability. This research note sets out how financing risk presents in your chosen jurisdiction and industry, a framework for testing commitment certainty and covenant headroom, scenarios in which funding falls away, the warning indicators of fragile financing, realistic impact ranges, and mitigation, with guidance on when to engage deal counsel, financing advisers and lenders' counsel. It is research to inform your own advisers, not legal or financial advice.
Reference material for informed readers, not advice.
