• Tue, Apr 25, 2023
  • What Documents Should a Buyer Prepare Prior to Searching for a Business?
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  • As a business buyer, there are several documents you should have prepared before you start searching for a business to purchase. These documents help you be well-prepared, organized, and demonstrate your credibility to business brokers, lending institutions, and sellers. While the specific documents you need may vary depending on the nature of the business and the transaction, here are some common documents you should have ready:

    1. Financial Statements: You should have a personal financial statement prepared. A personal financial statement includes your personal balance sheet and annual income. This document provides a snapshot of your personal financial situation and demonstrates your financial capability to business brokers, lending institutions, and sellers. We can provide you with a template if you would like.

    2. Proof of Funds: You should have proof of your available funds such as bank statements, brokerage account statements, or a letter from your financial institution confirming your available funds. This helps you demonstrate your ability to finance the purchase of a business to a lending institution.

    3. Resume or CV: Prepare an updated resume or curriculum vitae (CV) that highlights your relevant experience, skills, and qualifications. This helps establish credibility as a potential business owner and demonstrates your ability to successfully manage a business. A completed LinkedIn profile is an acceptable substitute for a resume or CV.
    4. Financing Pre-Approval Letter: If you plan to finance a business purchase, it is a good idea to obtain a pre-approval letter from a lending institution. This demonstrates your financial credibility and makes your offer more attractive to sellers.  We would be happy to provide you with a list of lending institutions willing to assess your financial status and provide you with a pre-approval letter.

    5. Legal and Professional Advisors: Consider having a list of trusted legal and professional advisors, such as attorneys, accountants, lenders, and business brokers, who can assist you throughout the business buying process. This shows you are well-prepared and have sought professional advice.  We would be happy to provide you with a list of attorneys, accountants, and lenders we have worked with in the past.

    Having these documents prepared in advance helps you demonstrate your credibility as a serious buyer to business brokers, lending institutions, and sellers and streamline the business buying process. It is important to consult with legal and financial professionals to ensure you have all the necessary documentation and are well-prepared for the complexities of buying a business.

    If you are looking to buy or sell a business, contact:
    Eric J. Gall
    [email protected]

    Source:  Edited from a conversation with ChatGPT on April 25, 2023