I've been searching for about three months, and coming from a big4 firm myself I've always sworn I would never move forward on a deal without reviewing tax returns.

Fast forward to now, and I've discovered a seemingly great business on many fronts. $4M revenue, $1.1M SDE, asking $1.8M on 85% seller financing. The business gets paid in full before delivering services and all prepaid revenue will be transferred at close. So at closing, cash transfer of $300K from me to Seller, swapped for approx. $1M from Seller to me.

I met the seller in person and saw the business in real life - offices, warehouse, inventory and all. Operationally, the business is sound with eight employees and software programs in place, with some room for improvement. Marketing is limited but there's a (very) long trail of content and tags from third parties, partners and customers demonstrating their work. Seller is happy for us to meet employees indirectly (as a "customer"). He seems like an incredibly kind person and I felt great about the entire thing, until I requested tax returns. He is reluctant to share them and feels it is a violation of privacy. Clearly an emotionally-driven guy, and he's been honest that he runs personal expenses through the business.

He has shared financial statements, and is happy for me to verify (proof of cash) in diligence, but doesn't want to share his tax returns.

I believe I can reasonably mitigate risk of moving forward with both: (1) extensive unilateral indemnification provisions in the purchase agreement (he is holding the note which would serve as escrow), and (2) condition to close upon verification of "target cash" in bank account.

The SBA is not a factor - all seller financing. What else would you consider here?