Who checks what · Before you sell
What does a business broker need from a seller?
Published · Reviewed by The Diligence Standard Team · Updated
Requirements vary, but brokers commonly request financial statements, tax returns, operational information and an explanation of adjustments. Supplying documents does not transfer responsibility for making the claims supportable.
A realistic transaction story
A manufacturer gave its broker summary financials and an add-back schedule. The broker produced a persuasive confidential memorandum. During buyer diligence, two adjustments lacked invoices and one represented work that still needed to be performed.
What the evidence changed
The marketing package accurately reflected what the seller supplied, but the underlying adjustments still required evidence.
What to check
- Write down the exact claim and who supplied it.
- Ask what was independently tested, by whom and under what scope.
- Treat every important number in the marketing materials as a claim the seller should be prepared to trace and explain.
- Translate any unresolved gap into cash, price, terms, timing or a decision not to proceed.