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What Buyers Ask for During Due Diligence

After you sign a letter of intent, the buyer asks to see everything, and Georgia Business Brokers Match sees deals fall apart in this stage more than any other.

Being ready changes the outcome.

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In short

  1. Diligence usually runs a few weeks, and the buyer's deposit is often refundable until it ends.
  2. Expect tax returns, profit and loss statements, bank statements, leases and an asset list.
  3. Customer concentration above roughly fifteen to twenty percent worries buyers.
  4. One shared folder keeps lenders and buyers from repeating requests.

What Due Diligence Is

Due diligence is the buyer's chance to check what you told them. It typically runs a few weeks, and the deposit is generally refundable until it ends, so buyers use it to find reasons to adjust the price or leave.

The Usual Document List

  • Business tax returns for several years.
  • Profit and loss statements and balance sheets, with the latest twelve months most important.
  • Bank statements that match the books.
  • The lease, with any renewals or guarantees.
  • An asset list with vehicle numbers and loan balances.
  • An employee roster with roles and pay.

Tax returns and bank statements are often held back until a buyer is qualified and in diligence.

Where Deals Break

Books that do not reconcile can sink a deal even when profit is strong. Stale balance sheets, such as a truck you sold long ago still listed as an asset, make buyers wonder what else is off.

Off the books pay and unreported cash are red flags. Buyers only pay for income they can prove.

Customers and Concentration

If the top few customers account for more than roughly fifteen to twenty percent of revenue, buyers often cut the price by about that share or leave. Solo owners whose clients follow them face the same discount.

Seller notes and earnouts are sometimes used to bridge it. See seller notes and earnouts.

Paperwork in the Background

Buyers also ask about tax accounts and licenses. A tax clearance certificate request fits here, and so does the status of your payroll and filings.

How to Prepare

Put everything in one shared folder before you list, keep your profit and loss current with your CPA and fix small errors early. Staying steady matters too, since a sudden slump or spike makes buyers wary. Request your valuation to start.

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