Proof of Funds

searcher profile

March 13, 2024

by a searcher from University of Northern Colorado - Kenneth W. Monfort College of Business in Denver, CO, USA

How do searchers navigate when brokers require proof of funds to submit an LOI? A lot of searchers are looking for businesses that would be out of reach without outside investor help. There have been brokers who want proof of funds shown before moving forward with the deal. Most searchers don't have $500K+ in funds to show and most investors want to see a deal when it's already under LOI to make commitments. Has anybody had success navigating around this?

6
34
558
Replies
34
commentor profile
Reply by an investor
from Ivey Business School at Western University in Boca Raton, FL, USA
I invest in searchers' deals and am happy to provide a letter of support with proof of funds if I like the deal based on the limited information available at that stage. Please reach out to me here or at redacted I focus on home services, property services, professional services, and other stable industries.
commentor profile
Reply by a searcher
in Rindge, NH 03461, USA
I have a contrarian view on proof of funds requests. I believe 99% of proof of funds requests are a trick question, cleverly used by brokers to see who is a newbie and who has experience with acquisitions. Experienced people don't fall for the trap. Newbies fall for it and try to provide a POF and thereby reveal that they are new at acquisitions and have not figured out that POF's are totally pointless and are 99% not needed. Experience buyers respond and talk in a way that answers the brokers question, which is 'are you a qualified buyer'. I don't provide them and I get right through the 'gate' just fine, coming out the other side with a higher level of respect from the broker.
commentor profile
+32 more replies.
Join the discussion