Next Steps when a Seller asks for Proof of Funds

April 01, 2025

by a searcher from University of Texas at Austin in Atlanta, GA, USA

Hey folks,

I’ve had a couple of exploratory calls with a Seller of a potentially viable business which I have sourced off market and I had a couple of questions.

So as a next step, my business partner and I asked for their CIM but before they go about creating the CIM, they wanted to see a proof of funds from us.

Since we’re both going in as###-###-#### partners, and bringing in SBA support, are the following documents enough to provide as a total package back over to the Seller?

Proof of funds from my bank account & brokerage accounts
Proof of funds from my business partners’ bank account and brokerage accounts
SBA Pre-approval letter

Am I missing any further documentation? Would they basically need to see as a total package, is there enough funds to cover the total price of the business? They didn’t mention the price of the business on the call, but we have a ball-park, high level estimate, so should we clarify that in an email as well?

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

A buyer prospect that provides the documents you reference goes to the top of the list. I'd estimate that the vast majority of business "buyers" don't even know what a SBA pre-qual letter is. As a buyer I would ask the seller (or sellers broker) for an SBA pre-qual on the business as well. This helps establish the sellers expectation of value and I would request that before price discussions so that the seller is prepared for what is realistic.

Reply by a searcher
from New York University in New York, NY, USA

Hi Aravindh, In cases where I have been asked the same from off-market deals I've sourced, I typically reply that I do not have proof of funds because I don't yet know how much I'd need. Once we dial in a price, my job is to put the financing together, which can include everything from loans to outside investors. So far, it's worked every time, especially because sellers without a CIM don't fully understand the process or what they should price for, so they're not actually prepared anyway. You'll still have a lot of work to do even after they made you jump through this 1st hoop. (This has been my experience in my niche and isn't legal, financial or deal advice.)

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