What do you do when a seller won't share financials?

What is normal to receive at each stage?

Sellers release information in steps. Knowing the steps keeps you from walking away from good deals too early or staying in bad ones too long.

1. Listing. Asking price, revenue and an earnings figure. No company name in many cases.
2. After an NDA. A summary of the business, often called a CIM or offering memorandum, with summary financials for several years.
3. Before an LOI, on request. Some sellers share year-end P&Ls or the add-back schedule. Fewer share full tax returns at this point.
4. After a signed LOI. Tax returns, bank statements, the general ledger, customer lists, payroll, leases and contracts. This is what the diligence period is for.
5. Late in diligence. Access to key employees and, with care, key customers.

A broker who holds full financials until after an LOI is usually following a standard process. See why brokers hold financials until the LOI.

Why do sellers hold back?

Some reasons are legitimate. Others are warnings. You cannot always tell which from the first refusal, so ask.

• Legitimate: confidentiality, especially if you are a competitor. Fear that employees will hear about the sale. Fatigue from buyers who asked for everything and never made an offer.
• Uncomfortable but fixable: the books are a mess and the seller is embarrassed. The tax returns were filed late or are being amended.
• Warnings: the tax returns show much less income than the listing. Part of the income is unreported cash. The business is shrinking faster than the summary shows.

How do you get the documents without walking away?

Most refusals are about trust. Give the seller reasons to trust you.

• Show you can close. A lender's pre-qualification and proof of your equity injection. Under SBA rules the injection is at least 10% of project costs and must be seasoned about 30 days or documented as to source.
• Sign a proper NDA. If you are a competitor, offer a "clean team": your CPA or lawyer sees customer-level data, you see summaries.
• Make the LOI conditional. State the earnings figure your price is based on, and say the price adjusts if the documents show otherwise.
• Ask for a staged release. Tax returns first, then bank statements, then customer detail.
• Explain the lender's requirement. The refusal is not to you. The lender needs historical cash flow, an independent valuation and, for smaller loans, the two most recent months of bank statements. Projections cannot be used.

When should you walk away?

Use clear rules, decided before you are invested in the deal.

1. After a signed LOI, no tax returns within the first two weeks. Walk.
2. Tax returns arrive but the seller will not provide bank statements to tie them to. Walk.
3. The seller says the real earnings are higher than the tax returns because of unreported cash, and wants to be paid for them. Walk, or reprice to the reported number. See unreported cash income.
4. Documents arrive but keep changing. Ask once in writing for an explanation. If they change again, walk.
5. The seller will share only with your lender, not with you or your CPA. Ask why. The lender's review is not your diligence.

A short exclusivity period makes these rules more important. LOI exclusivity typically runs 30 to 90 days. Two weeks lost waiting for documents is a large share of that.

Worked example: a conditional LOI

A seller shares only a summary P&L before the LOI, showing SDE of $400,000. The asking price is $1.2 million.

1. Your LOI offers $1.2 million, "based on SDE of $400,000," which is 3.0x.
2. It says the price adjusts at 3.0x if SDE verified in diligence differs.
3. Diligence supports $340,000. The adjusted price: $340,000 times 3.0 = $1.02 million.
4. The $180,000 change was agreed in advance as a formula. There is no retrade to argue about.

A seller who will not accept the formula is telling you they do not expect the documents to support the number. Check that 3.0x itself is reasonable: the BizBuySell all-sector average is 2.57x SDE, and 2.7x in Q1 2026, with wide ranges by industry.

Where these numbers come from: SBA coverage, valuation, injection and bank statement rules from this guide to SBA SOP 50 10 8.1 and FunderIntel. Diligence and exclusivity periods from BizBuySell's SBA loan timeline and Big Ideas DB on letters of intent. Multiples from Beancount's guide to BizBuySell data. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026; lender practice under it is still settling and these are secondary summaries, so confirm current terms with your SBA lender.

Related questions

Can I sign an LOI without seeing tax returns?

Yes, if the price is tied to a stated earnings figure and diligence is a condition of closing. Most LOI terms on price are non-binding, but confirm that with your lawyer before you sign.

What if the seller hasn't filed last year's tax return?

Ask when it will be filed. The lender will need it or will use an earlier year. If the filed return shows much lower income than the P&L, treat it as an earnings gap.

Is it different if I am a competitor?

Yes. Sellers are right to protect customer lists and pricing from a competitor. A clean-team arrangement through your advisers usually solves it.

What comes next

Sometimes the documents arrive and show a business that is shrinking. The next question is whether you should buy a business with declining revenue.

Related articles

• What are the red flags when buying a business?
• How do you value a business with unreported cash income?
• When should you renegotiate and when should you walk away?
• Why won't the broker share financials before an LOI?
• How do you verify that a seller's numbers are real?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.