When selling a business, you can ask potential buyers for evidence that they have sufficient funds or a realistic financing plan to complete the acquisition. This may include recent bank statements, confirmation from a financial institution or evidence of acquisition finance. The documentation required will depend on the purchase price and proposed funding structure.
Common forms of financial evidence include:
- Bank statements or bank letters: Recent documentation confirming that the buyer has access to sufficient funds. Sensitive personal information can be appropriately redacted.
- Lender confirmation: An agreement in principle or written indication from a lender may demonstrate potential access to acquisition finance, although it is not a guarantee of funding.
- Investor or funding commitments: Buyers using investors or multiple funding sources may provide supporting letters or other evidence of their proposed financing arrangements.
For example, if a buyer intends to purchase a business for £750,000 using £300,000 of personal funds and £450,000 of acquisition finance, you may request evidence covering both elements.
Proof of funds should be assessed carefully, as documents may not establish that financing is immediately available or that the buyer will complete the transaction.
Read more: How to Verify a Buyer Is Serious Before Sharing Your Financials
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