Due diligence before you buy a U.S. business
We check whether the business earns what the seller says, what could go wrong after closing and whether the numbers will hold up in your E-2 application. You get the findings in writing before you commit the money.
What we check
Financial
- P&L rebuilt from three years of bank statements
- Reconciliation with tax returns and the seller P&L
- Add-backs: which are real and which are recurring costs
- Revenue concentration and seasonality
- Working capital, payables, receivables, debt
- Verified SDE or EBITDA and a valuation opinion
Business and operations
- How dependent the business is on the owner
- Staff, key employees, payroll and contractor classification
- Customers, contracts and churn
- Vendors, pricing and margins
- Equipment condition and capital needs
- Marketing channels, competition and growth drivers
Legal, through qualified counsel
- Legal standing of the company and good standing in the state
- Lease terms and assignment
- Licenses and permits that must transfer
- Litigation, liens and tax issues
- Customer and vendor contracts, change-of-control clauses
- Employment and classification risks
Red flags we look for
- Revenue in the P&L that never reaches the bank account
- Cash revenue the seller asks you to "take on trust"
- One customer above 20 to 30% of revenue
- A lease that expires soon or cannot be assigned
- The owner holds the only license or the key relationships
- Add-backs that are really ongoing costs of running the business
An example of a finding
- Asking price
- $850,000
- Seller-reported SDE
- $310,000
- Revenue in the seller P&L vs bank deposits
- $46,000 a year higher than deposits
- Add-backs that were recurring costs
- $26,000 a year
- Verified SDE
- $238,000
- Price at the same multiple
- about $650,000
Details changed. The buyer either renegotiates on verified numbers or walks away before closing.
What you receive
Investment memorandum
Verified earnings, risks, valuation opinion and our recommendation: proceed, renegotiate or walk away.
Risk list for your attorney
Items to cover in the purchase agreement: representations, indemnities, holdbacks, escrow terms.
Numbers for the E-2 file
A documented investment amount and the earnings history that the business plan and your attorney can rely on.
Why it matters for an E-2 visa
The consular officer looks at whether the business is real, operating and not marginal, and whether the investment is substantial for its cost. The same verified numbers that justify the price support those points. A purchase made on unverified seller figures is weak twice: as an investment and as a visa case.
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