3: Review Information

Summary of the Process

A) Review the CIM

B) Review the financials

If we approve your non-disclosure agreement and buyer profile, you’ll receive preliminary information about the business, including a confidential information memorandum (CIM) and adjusted financial statements. Please note that any information beyond the CIM and financial statements is only released after an indication of interest (IOI) or letter of intent (LOI) has been submitted and approved.

View a list of documents that are customarily only released during the due diligence period here.

A) Review the CIM

The CIM is a comprehensive document that describes all major aspects of the business. While it addresses the most common questions, the CIM doesn’t cover every question you may have about a particular business. The purpose of the CIM is to help you decide whether to arrange a call with the seller or submit an indication of interest or a letter of intent.

B) Review the Adjusted Financials

You will receive the following financial statements after your NDA and buyer profile are approved:

• Normalized profit and loss statements (P&Ls) for the previous three years
• Balance sheets for the last three years
• Monthly revenue for the most recent three years and current year

Frequently Asked Questions

Why can’t I receive additional information beyond the CIM and financials? A thorough investigation of the business can only be conducted after an LOI is accepted, during the due diligence period. Confidentiality may be compromised if the seller releases documents to every buyer who requests them, and an information leak may be difficult to locate and control once it occurs. For this reason, sensitive information (e.g., bank statements, tax returns, etc.) is released only after an LOI is accepted. When buying a business, your offer must be accepted before you can begin conducting due diligence. The seller’s representations are then verified only after an LOI is accepted. Before receiving an offer, most sellers are cautious about the information they’re willing to share with a party. If all buyers conducted their due diligence before making an offer, sellers would spend a tremendous amount of time with many buyers who may never make an offer.

Can I receive a copy of the tax returns and bank statements before submitting an offer? Once a letter of intent is accepted, you’ll have sufficient time to conduct due diligence and verify the accuracy of financial records and other information, which includes a review of the business’s tax returns and bank statements. Many buyers request to see tax returns and bank statements before submitting an offer, but releasing this information prematurely would put the seller’s sensitive information in jeopardy because confidential information would be released to multiple parties. We, therefore, only release tax returns and bank statements after an offer has been accepted.

Can I receive copies of tax returns to pre-approve the business for financing? We do not release tax returns prior to accepting a letter of intent. Comprehensively evaluating a business for financing and obtaining approval can only be done during due diligence as it requires access to a significant amount of confidential information. You should first receive permission from the seller before sharing their confidential information with third parties, such as lenders. The seller will not want you shopping their business without their knowledge or consent. An offer can be made that’s contingent on third-party (e.g., bank) financing, and the seller can then provide you with all the documents required to obtain approval if they accept your offer.

Can you destroy my signed NDA and buyer profile if I’m not interested in the business after reviewing the information? No, we must retain a copy of your signed NDA and buyer profile in the event any provision in the non-disclosure agreement is violated.