What You Must Understand About Due Diligence
When getting ready to sell my business Laguna Hills you have to be ready for the due diligence stage. This is the stage that starts after the issuance of the Letter of Intent (LOI) by a potential buyer. The whole purpose of due diligence is to help the buyer evaluate if the business is a worthy investment or not. At So-Cal Business Brokers we will educate you on what to expect during this stage, help you get the necessary documents ready and review the LOI for you as well as other negotiations.
It’s non-binding
The first thing you need to understand about this stage is that the LOI is non-binding. What this means is that even though an offer is issued, if the buyer is not satisfied with what he sees he can walk away from the deal at any time. If the buyer walks away, the deposit in escrow will be refunded. If the buyer is satisfied, our business brokers in Orange County will draft and supervise the signing of the Asset Purchase Agreement (APA). This is the contract that makes the deal binding for you and the buyer.
Down payment is required
The due diligence stage does not commence until the interested buyer puts down a sizeable down payment. The down payment is put in escrow. When you want to sell my business Laguna Hills, we only introduce you to serious and able buyers. This is why we require a sizeable down payment of not less than 10% of the total sale price. This is done after confirming that the buyer has the means to finance the purchase. We will also help you negotiate fair terms for the due diligence period. On average, the due diligence stage lasts 14 to 21 days.
Facilitate the process
One of our key duties is to make arrangements to facilitate the due diligence process. The first thing buyers want is a conversation with the landlord regarding the leases. They want to make sure that there is a clause that allows the transfer of the lease to the buyer. To facilitate the sale our team will negotiate with the landlord so that the transfer of the lease is accepted.
Buyers will also want to vet the financials of the business. Our job here will be gathering all the required documents, cleaning them up and getting them ready for the buyer. Buyers will want access to the profit and loss statements, balance sheets, tax returns, credit card transactions, bank statements and other relevant financial documents.
Closing
Once the buyer agrees to purchase your business, our in-house transaction attorneys and business brokers will collaborate to develop a closing document for the parties to review. Closing documents include the APA, Bill of Sale, Promissory Note, and Uniform Commercial Code filing.
Reach out to us if you want to sell my business Laguna Hills. We will take care of everything so that you sell fast, to the right buyer and at maximum profit.