FAQs

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Q: Do you recommend using an escrow company?

An escrow company should be used for all transactions with the exception of those closings handled by the buyer’s lender. Using a third party to handle escrowing buyer funds and conducting the close protects both buyer and seller. When using an escrow company the seller knows they will receive funds upon transferring the business over to the buyer and the buyer knows upon the transfer of funds they will receive ownership to the business they are purchasing.

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Q: How long is due diligence?

The due diligence process usually takes from 3 to 4 weeks. The amount of effort and detail involved in the buyer’s review is driven by the complexity of the business and the dollar amount of the transaction.

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Q: Can you notify me when new listings become available?

Yes, please fill out the contact us form here and and give us the parameters of businesses you may have interest in. Parameters include industry, approximate range of listing price, SBA financeable, etc. When listings that meet your criteria become available you will be contacted.

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Q: As a buyer, how will I know the seller’s financials are accurate?

Every buyer should perform a complete due diligence on any business they will potentially purchase. The due diligence process should include a review of merchant account statements, bank statements, supplier costs as well as tax returns. The key is to trace the cash from the merchant account to the P&L. Your CPA will help you develop an effective review process.

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Q: What will buyers look for during due diligence?

Buyers are looking to validate the accuracy of all significant information provided. This validation will typically include a review of merchant account statements, bank statements, a statistically sampling of supplier invoices, tax returns, 1099 and W-2 statements, supplier contracts, credit card statements for business expenses, etc.

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Q: Will I have face to face visits with prospective buyers?

It usually depends on the desire of the buyer. The larger the price of the transaction the more likely it is that a face to face meeting will take place prior to the closing. Generally most interaction between buyer and seller is via conference call and email communication. The broker will facilitate all such communication.

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