007: Importance of Due Diligence in Closing a Sales Transaction

Private Practices in Maine

If you are planning to buy or sell a business--or it could happen sometime in the future--do not underestimate the importance of due diligence.

One of the most common pain points buyers run into when purchasing a property is a lack of due diligence on the seller's part. With the proper preparation beforehand, you can create a much smoother transaction for both parties. Furthermore, understanding the bank's position in the acquisition can help you identify what needs to be done before involving the bank or the buyer's counsel.

In this episode of Private Practices in Maine, Michael outlines what you need to know before buying or selling a business. He explains when a bank should get involved, when you will need to bring in your attorney, and how doing your due diligence can save you a lot of time and money.

While you may believe you have a good grasp on what should be done before a business sale, Michael reveals the critical steps many people miss.

In this episode, you will hear:

• One of the most common pain points when acquiring a practice or other types of business assets
• Why a seller's due diligence can smooth the transaction process, and when a bank and the buyer's counsel get involved
• The process of underwriting a business acquisition loan and the role of the commitment letter
• The bank's position in the acquisition, what the law of secured transactions is, and how collateral is guaranteed for the mortgage
• Some steps to take to ensure the title on the property that is being sold is clear
• Red flags that may occur during the acquisition of a property, including taxes and liens
• Why sellers need to be proactive in this process and why they need to put their business under scrutiny to understand the state of the business and its assets

Resources from this Episode

Website - malloyfirmmaine.com

Phone - [phone]

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