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Business Acquisition Checklist

Before buying a business, review our small business acquisition guide

Business Acquisition Checklist

Download our FREE Business Acquisition Due Diligence Checklist and other helpful guides at the end of the article.

Here is a comprehensive guide to the reasonable steps taken during the process of buying a business.

Business Acquisition Due Diligence Checklist

Financial Information

  • Tax income and sales tax returns (federal, state, local, foreign): last 3-5 years
  •  Interim income statement: year-to-date and comparison to previous year
  • Interim balance sheet: year-to-date and comparison to previous year
  • Accounts receivable
  • Accounts payable
  • Business valuation

Physical Assets

  • Inventory – value, age, condition, etc. Is the inventory sellable or leftover from what the current owner
    wasn’t able to sell?
  • List of furniture, fixtures, and equipment
  •  Machinery and equipment lease and purchase agreements
  •  Vehicle registrations and titles
  • U.C.C. Filings

Popular Businesses to Buy

Guides to buying a business

  • How to buy a liquor store
  • How to buy a FedEx route
  • How to buy a motel / hotel
  • How to buy a gas station / convenience store

Real Estate

  • Lease agreement: How long is the lease? Are there restrictions that might prevent you from expanding products or services? Does the tenant or the landlord maintain the premises?
  • Environmental studies
  • Previous appraisals
  • Location and market research
  • Security systems in place and past burglary reports

Product and Service Information

  • A list of all products or services currently offered
  • A list of all products or services under development with summary of relevant data
  • Sales records – can be helpful to evaluate the sales breakdown by product, service, client, and method of payment
  • For motels and hotels: occupancy rate, average daily room rate (ADR), revenue per available room. (RevPAR), STR or STaR report. Read our article on how to buy a motel or small hotel here
  • Summary of all complaints, warranty claims, and returns
  • Product or service market research reports
  • Business reputation research: review search engine results, Yelp, Facebook, Better Business Bureau, etc.

SBA Loan Calculators

  • Total Funding Calculator

    How much can I borrow with an SBA loan using cash, 401(k) and IRA retirement funds, ROBS and more. Use this loan calculator to determine how much you can borrow to buy an existing business.

  • Complete SBA Loan Calculator

    Our most popular calculator gives you the SBA loan amount, terms, loan payment and even the amount required for a down payment with or without a seller note or seller participation of an existing business. This is the only calculator of its kind. Use this loan calculator to determine a complete loan scenario when buying an existing business.

  • Simple SBA Loan Calculator

    Mobile friendly and easy to use. Use this loan calculator for any business loan terms and payment but it defaults to the current SBA 7(a) loan term and interest rate for your convenience.

A pre-qualification is a great way to get a headstart on your application and will help in your negotiations. There is no credit check required and you’ll receive your pre-qualification letter and borrowing estimate within 24 hours.

Qualify Me

Markets and Competitors

  • Customer profile
  • Existing supply or service agreements
  • Company’s credit and purchasing policies
  • Schedule of unfilled orders
  • Market research reports
  • Previous and current advertising and marketing efforts
  • List of competitors

Employee Information

  • List of employees with name, position, start date, salary, contracts, and benefits
  • Copies of all stock option and stock purchase plans
  • Worker’s compensation claims history
  • Unemployment insurance claims history

Contracts

  • Franchise Agreement
  • Franchise Disclosure Document
  • Distribution agreements
  • Supplier agreements
  • Sales contracts
  • Vendor contracts
  • Employee agreements
  • Subcontractor agreements
  • Nondisclosure or noncompete agreements
  • Security agreements, mortgages, and collateral pledges
  • Any other legally binding agreements

Regulatory Compliance

  • Details of litigation threatened, pending, or taken
  • Inspection reports such as building and health inspections
  • Licenses and permits – liquor license, lottery license, etc.
  • Insurance – What is the insurance coverage? What claims have been made in the past?

Organization and Good Standing

  • Articles of Incorporation and Bylaws
  • Organizational chart
  • List of shareholders and number of shares held by each
  • A Certificate of Good Standing
  • A list of all states where the Company is authorized to do business and annual reports
  • Fictitious Business Name Statement

Download our FREE Business Acquisition Guide and Due Diligence Checklist

HOW DO I GET STARTED?

The best online SBA loan platform is YourEdge™ by YourSBA.com:

  • Get prequalified to buy a business within 24 hours
    • Start here with YourEdge™
    • Find out how much you may qualify for using our SBA Loan Calculator tools here.
  • Business acquisition loans from $350,000 to over $5 million.
  • 5x success rate of your bank
  • No fees
  • No credit check / No hard credit pull
  • No bank runaround
  • Online, streamlined application accepted by all of the most aggressive SBA lenders for competitive interest rates and a 95% success rate.

See if you qualify for an SBA loan by taking just a few minutes to complete the quick form here. The pre-approval process takes less than one day and does not require a hard credit pull.

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Latest News

  • Tax Cuts and Jobs Act of 2017Top 10 Best Things About the 2017 New Tax Law for Small BusinessDecember 21, 2017 - 4:30 pm
  • SBA Loan Calculators Updated for New Fed Rates and New SBA Rules Effective 2018December 13, 2017 - 4:36 pm
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