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Due Diligence After the Offer: What Buyers Ask For

Accepting an offer is the start of the hard part, and Lexington Business Brokers HQ tells owners to get their files ready before it begins.

Here is what the buyer will request.

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The short version

  1. Diligence usually runs a couple of weeks, and the deposit is generally refundable until it ends.
  2. Expect tax returns, P&Ls, the lease, an asset list and an employee roster.
  3. Stale books and unreconciled accounts can kill a deal.
  4. Most closings take six to nine months from engaging a broker.

The Usual Document List

  • Several years of tax returns and profit and loss statements.
  • A current balance sheet and recent bank statements.
  • The lease and any amendments.
  • An asset list, with vehicle identification numbers.
  • An employee roster and payroll records.

Tax returns and bank statements are often shared only after a buyer is qualified and in diligence.

How Long It Runs

Diligence usually takes a couple of weeks, and the deposit is generally refundable until it ends. Lenders repeat document requests, so keep everything in one shared folder.

What Kills Deals

Books that do not reconcile can sink a strong business. Buyers also check payroll and work authorization, and off the books pay is a major red flag. Inventory heavy companies may face a hard count before closing.

Employees

Employees do not transfer automatically, and Kentucky is an at will state, so staff can leave. Most stay when pay and benefits continue. Tell them close to closing, not before, because early news creates flight risk.

Transition and Noncompetes

Buyers often ask for three to four weeks of help and may use less. Offer less and trade extra time for price. A noncompete commonly runs two to five years with a defined radius.

The Calendar

Most sales take six to nine months from engaging a broker. A sixty day closing is an outlier. The fourth quarter is the busiest for bank closings, so a September start rarely closes that year.

Questions for Your Attorney

  • When does the deposit become nonrefundable?
  • What happens if diligence finds a problem?
  • Who pays for an inventory count?

Stay Organized

Put every file in one shared folder with clear names. Buyers and lenders repeat requests, and a clean folder saves days.

Keep Going

See the paperwork side in tax clearance and the unemployment transfer. Then find your sale price.

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