Main Street & SMB

BusinessBroker.net transaction diligence

Published · Reviewed by The Diligence Standard Team · Updated

Use marketplace breadth to source, then rebuild the economics. Pay special attention to owner financing labels, cash-flow definitions, broker/owner representations and local licensing.

Diligence focus

  • Cash flow definition
  • Seller financing terms
  • Broker vs owner listing
  • Asset/inventory inclusion
  • Lease/site
  • Owner role
  • Licensing
  • Revenue verification

First evidence requests

  • Listing contact capacity / representation
  • Tax returns
  • Monthly P&L
  • Bank statements
  • Add-back detail
  • Asset and inventory schedule
  • Lease
  • License/permit records

Warning signals

  • Owner financing distracts from weak earnings quality
  • Price-to-cash-flow multiple uses unsupported cash flow
  • Asset list is not tied to ownership or condition
  • Broker listing omits source documents
  • Local permits are assumed to transfer