Tax Returns and LOI for SMBs

by a searcher

1 year ago

Keeping in mind that clean tax returns from a seller / target are quite important if you are looking to use SBA to finance, how do people here typically approach this? Do you ask for these tax returns before putting in any offer / LOI? I presume that going off the word of broker that tax returns are clean can often be misleading.

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searcher from Dartmouth College

it is important to get tax returns as early on as possible because SBA loans are made based off tax returns, not compiled/reviewed/audited financial statements.

1 year ago | like reply | 0 likes

searcher

I ask for tax returns before extending an LOI. I think this helps to minimize wasted time and money of going under LOI to only find out that the business is not as profitable as advertised by the broker. Hope this helps!

1 year ago | like reply | 0 likes

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