Prior to discussing confidential information about businesses for sale, business brokers require prospective buyers to complete certain forms that serve two purposes. They protect the interests of the business owners during the sale process and enables a business broker to competently assist buyers in their acquisition search. These documents are necessary to the process and are defined below.
Confidentiality Agreement
This document is also known as a Nondisclosure Agreement (NDA). It registers the buyer’s receipt of confidential information regarding a business for sale. It is also the buyer’s pledge that the confidential information is not to be shared or used for competitive purposes. It also protects the broker’s position as the intermediary in the introduction of the buyer to the seller’s business.
Personal Financial Profile
- This is NOT a credit report or an official document that requires confidential information such as a social security number or your bank statement. This form requires the buyer to assess his/her financial capabilities. It outlines the buyer’s financial condition in terms of assets, liabilities and liquidity to which the buyer attests to its truth and accuracy. It provides insight to the buyer’s availability of funds for a down payment, the purchase price range, and net earnings requirements for an acquisition. It will help narrow the focus of the businesses to research as possible candidates for purchase consideration.
