Essential Documents for Buying or Selling a Business:

When you’re buying or selling a business, having the right documents and information on hand is crucial for a smooth transaction.

Below, we’ve outlined the key items typically requested from a seller during various stages of the business sales process. Please note that some items may not apply to your business, and additional documents may be requested.

Documents Needed for Business Valuation and Initial Listing:

• 3 Years of Profits and Loss Statements: Include financial statements for the past three years, including the current year-to-date (Y-T-D). Ideally, these should be in a monthly Excel format with a total column.

• 3 Years of Balance Sheets: Provide balance sheets for the past three years, including the current Y-T-D.

• 3 Years of Business Tax Returns: Include your full business tax returns (with statement pages) for the past three years.

• Current Accounts Receivable and Payables: If applicable, provide the most recent accounts receivable and payables.

• Last Calendar Year of Sales by Customer: If relevant, list sales by customer for the previous calendar year, especially if one customer accounts for more than 5% revenue. 

• Inventory Value by Category: Provide the value of inventory, if applicable.

• List of Personal Expenses Paid Through the Business: Identify any personal expenses paid through the business that can be considered an “add-back,” such as personal health insurance, automobile expenses, SEP IRA or 401K contributions, etc.

• Key Employee Information: Provide details on key employees, including position, salary, and length of employment.

• Breakdown of Recurring Revenue Streams/Contracts: Include a breakdown of any recurring revenue streams or contracts.

Additional Documents Needed for Due Diligence After an Offer/Letter of Intent (LOI) is Accepted

• 3 Years of Monthly Bank and Credit Card Statements: Provide statements for all accounts associated with the business for the past three years.

• Y-T-D Monthly Bank and Credit Card Statements: Include the year-to-date monthly statements for all accounts.

• All Contracts and Agreements: Submit all contracts and agreements, including lease, employee, customer, supplier agreements, etc.

• 3 Years of Detailed Payroll Summary by Employee: Provide detailed payroll summaries for each employee for the past three years.

• Y-T-D Detailed Payroll Summary by Employee: Include the year-to-date payroll summaries for each employee.

• Insurance Information: Submit all relevant insurance documents.

• Any License Information: Provide details on any licenses associated with the business.

• Corporate Documents: Include articles of incorporation, by-laws, any amendments, and any other relevant corporate documents.

• Any Intellectual Property: Provide details on any intellectual property owned by the business.

Having these documents ready will help streamline the process of selling a business, ensuring a smoother transaction and speeding up the timeline to close the deal. If you have any questions, please do not hesitate to call or email one of our local Business Brokers. We are here to help. 

SBA 7a Document Checklist (For Buyers)