Who Performs Due Diligence? - For the financial due diligence including tax and payroll, Transworld M&A will engage accounting specialists on their team to provide feedback, analysis and a report. For legal due diligence, this will be a member of the legal team. Operational due diligence is generally broad and has to do with the Buyer getting comfortable with the operations of the business in conjunction with post-sale planning. Debt Funding Stream Most businesses are bought we some debt. We always use the example of buy-to-let flats which most people understand. However, most business sales are not funded by high street banks but by specialist funders that operate more like investors than banks. In fact, if you think about it, the business funders are really investors! They are putting money into the purchase of a business and getting an expected return rate via interest and a payment schedule that is made out of the profits of the business usually. The only difference with an equity investor is they do not have a payment schedule generally but have traded their investment for equity which will pay them dividends out of profit (rather than a set amount like a funder) and return funds to them upon some kind of exit. But in the end, both are putting money in and expect it returned and a profit generated, it is just the method is slightly different. The reason for mentioning this is it sets the stage for working with these specialist funders and helps understand why they have the requirements that they will about how the transaction is structured and how the business will be run and by who. Funding for a business purchase is obviously more complex than buying a property and generally requires a funding specialist that can manage the process. These specialists will know what funders are lending in what sectors as this can change like the wind. They will also
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