Why are there some Business Brokers that will not release financial information without an accepted offer?
I have a strong interest in this business, based on the type of business and basic financials that have been advertised; revenue, expenses and EBITDA , However, the Business Broker will not release P&L or Balance Sheet information until I submit an offer! What good is any offer solicited in this manner? It’s really a disservice to all parties involved in the transaction and a collosal waste of time. Please bear in mind that despite completing an NDA and full financial discosure, I haven’t been given or even asked for the name of this business!
I can only think that a seller who won’t release basic financial information without an offer in hand is hiding something or is being misrepresented by his broker. At the very least the broker is doing a disservice to the seller.
Actually, the Business Broker is doing his job the way he is suppose to. The broker is hired by the seller to control the situation and that is what he is doing. He is not doing a disservice to his client he is following proper practices.
Why would anyone release their financials to just anyone who asks for them? Maybe your are the competition or are just window-shopping, or…. etc. And since you are not using a Business Broker to represent you, the listing agent may not take you seriously. Mostly because of all the “tire kickers” you see in this business.
Hire a Broker to act as a “Buyer’s Agent” and submit a Letter of Intent. Then when you get the financials, you can make a better decision on if you really want to purchase the business or not.
But don’t blame the listing broker because YOU do not want to follow established practices in Business Brokerage. Sounds to me that it may be it is YOU that does not understand the process and I would highly encourage you to hire your own team to help you understand the process. It is for your protection as well as the seller’s. And just because you may have done something one way where you live, doesn’t mean it’s even legal where you are trying to purchase the business. Every state has different laws and practices regarding Business Brokerage transactions. In the Atlanta area I do not know of a broker that would even consider giving the financials without a LOI or a purchase offer. The agent/broker is doing his job the way he is suppose to.