Due Diligence
Managing the process
Due Diligence involves a good-faith investigation of the the business to the satisfaction of the Buyer. Due Diligence is conducted within strict time limits. Critical milestones must be accomplished for the transaction to survive including:

  • Escrow of deposits

  • Delivery of documents

  • Document review

  • Accountant & Attorney Reviews

  • Lien search

  • Lease agreement

  • Operational review

  • Financial analysis

  • Insurance review

  • Environmental studies

The Due Diligence Process involves accountants, lawyers, appraisers, advisors, bankers, real estate brokers to name a few. The Advisor monitors the process, exchanges information between the players and documents milestones. It can be an expensive process when unique circumstances are attached to a particular business. The Buyer must be prepared to dedicate the time and attention required to uncover the known facts about the Target business.

Secure Financing
Buyer satisfies financing contingency
Most deals are contingent upon securing financing. As your Advisor, we can provide introductions to commercial lenders who specialize in these transactions.
The process starts with agreement on the Letter of Intent. The Buyer prepares a loan application based in information produced from the Due Diligence Process. The Advisor facilitates the loan application process. Lenders may impose new terms and conditions that can make or break a deal.
Business Valuation
3rd Party Business Appraisal
Lenders will require a 3rd party business appraisal. The appraisal usually involves a combination of valuation methods to reach an "estimate of value" that is a reference point for the Buyer, Seller and Lender. Lenders cannot use an existing business valuation prepared for the Seller. A new valuation is ordered by the bank and included in the closing costs.

Contingency Release
Transition to Closing
When the Buyer and Seller have satisfied all the the contingencies a contingency release form is executed by all parties. This enables confirmation of a closing date.

Phase V - Closing - cont.