M&A buyers are still looking in the midst of uncertainty. However, buyers will be mindful of added risks caused by COVID-19. These are some financial questions that may come up in future due diligence:
• Did the business utilize any government relief, debt deferrals, or rent reductions?
• In terms of government relief, was the business accurately entitled to that relief and did they meet requirements for debt forgiveness?
• Did the business take on new debt that would impact the viability of an acquisition?
• Are revised financial projections reasonable?
• What is the financial condition of the business’s key customers?
• Are there risks to collecting on accounts receivable?
• What is the seller doing, if anything, to reduce or renegotiate operating expenses?
Business owners should review their current practices now, so they’re prepared to address buyer concerns.
COVID-19 Era Due Dilligence Pt 4
Cornerstone Business Services
200 S. Washington St., Suite 401Green Bay, WI 54301
