Broker won't show monthly financials and seems to be blocking interacting with current owner. How big of a red flag is this?

July 27, 2025

by a searcher from Boston University - Questrom School of Business in Newton, NH, USA

I'm looking at a potential target, it's on the smaller side, but appears largely passive. The P&L looks fine as well. The broker has been slow to respond, although when I do get them on the phone they are forthcoming with info. However, I had to specifically ask for YTD financials, and once I got those, I asked for monthly financials so I could assess any cyclicality. I was told that I had already received everything they had, and I had to submit an LOI if I wanted to see monthlies. That seemed odd, since compiling that info is going to chew up a lot of my diligence timeline. I asked to set something up to speak to the current owner, and after a couple of emails with no response I called the broker directly. He said that the owner was now considering multiple LOIs..... I went back and looked at the CIM, etc. and I realized that I never even got a name for this company. If I want to put in an LOI I can't even enter language that includes the name of the target or the owner because I don't have it. I completely understand not wanting to dump every iota of information you have before getting under LOI...but monthly financials and a chat with the owner pre-LOI seems normal. I also don't understand how others have submitted LOIs without even knowing what the name of the company is...Scale of 1-10 how odd is all of this?

Reply by an intermediary
from Baruch College in Roslyn Heights, NY, USA

Hi, business broker here. I think the broker told you the answer - they have multiple LOI's from buyers who likely have the same info as you. They don't "need" your offer and don't want to invest the time tracking down the info you requested if they don't know what you would be looking to offer and have other buyers. It is never black and white what info will be available pre and post LOI and depends on many different factors. At some point when everything available has already been provided, it is reasonable to ask for an offer to ensure it is a good use of the sellers time to track down the info. You wouldn't (or shouldn't) be asked to send any non-refundable deposits or get to a closing without being able to do your due diligence which could include monthly financials. At the end of the day they are putting up these walls as a means to protect their time, and if you like the business I would encourage you to play by their rules so that they take you seriously and keep the process alive. You will have your opportunity to do due diligence post LOI.

Reply by an intermediary
from Clemson University in Raleigh, NC, USA

Speaking as a broker (full-time 22 years). I would recommend you simply ask if there are any material fluctuations in income or expenses over a typical year and if so what the causes are. That's the question you want answered. As others have said they may not be available, but the owner will know. Limiting access to sellers is part of a broker's role, but unlike this broker, we provide all available data after an NDA is completed. We don't like to waste our or our buyers' time. Requiring an LOI to get additional information is amateur hour, but many still play this game thinking they are 'qualifying' prospects. There aren't - they are just making people submit non-binding offers to get the information they need to make an informed offer. When a listing is popular (recently one with over 800 inquiries) we do not schedule calls with the seller until there is at least a term sheet and proof of funds provided as it is simply not practical for the seller to spend an hour or more with every potential buyer.

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