Capillary and van der Waals forces cause nanotubes to deform or even collapse under metal contacts. Using ab initio band structure calculations, we find that these deformations reduce the band gap by as much as 30%, while fully collapsed nanotubes become metallic. Moreover, degeneracy lifting due to the broken axial symmetry, and wave functions mismatch between the fully collapsed and the round portions of a CNT, lead to a 3 times higher contact resistance. The latter we demonstrate by contact resistance calculations within the tight-binding approach.