Free Tool

The complete SMB acquisition due diligence checklist

61 items across 7 sections — based on the Live Oak Bank due diligence framework. Check off items as you collect documents and verify financials.

61 Items 7 Sections Live Oak Framework Pre & Post LOI SBA Pre-Qual
Your Progress
0 of 61
📊 Financial Documents
0 of 10 ▼
✓
3 years business tax returns
Post-LOI
✓
3 years P&L statements
Post-LOI
✓
Balance sheets (3 years)
Post-LOI
✓
AR aging schedules
Post-LOI
✓
AP aging schedules
Post-LOI
✓
Statement of cash flows
Post-LOI
✓
2+ years bank statements
Post-LOI
✓
YTD interim financials (P&L + balance sheet)
Post-LOI
✓
Prior year comparative P&L
Post-LOI
✓
Monthly sales breakdown for seasonality analysis
Post-LOI
👥 Customer & Revenue
0 of 8 ▼
✓
Customer and client list with applicable contracts
Post-LOI
✓
Top 10 customers by revenue — 3 year trend
Post-LOI
✓
Sales and profit per customer
Post-LOI
✓
Customer retention data
Post-LOI
✓
Payment terms for customers
Post-LOI
✓
Sales breakdown by geographic market
Post-LOI
✓
Current pipeline and WIP report
Post-LOI
✓
Revenue verification vs bank deposits (CPA reconciliation)
Post-LOI
🏢 Employees & Management
0 of 7 ▼
✓
Organizational chart
Pre-LOI
✓
Key employment contracts
Post-LOI
✓
Non-compete and non-solicitation agreements
Post-LOI
✓
Seller role assessment — passive vs active involvement
Pre-LOI
✓
Key employee retention plan
Post-LOI
✓
License requirements identified
Pre-LOI
✓
Employee handbook reviewed
Post-LOI
⚙️ Operations
0 of 7 ▼
✓
Inventory and asset list
Post-LOI
✓
Physical equipment inspection completed
Post-LOI
✓
Equipment list included in purchase agreement
Post-LOI
✓
Supplier and vendor list with contracts
Post-LOI
✓
Insurance requirements overview
Post-LOI
✓
Business license requirements confirmed
Pre-LOI
✓
Existing corporate structure reviewed
Post-LOI
🔍 Financial Verification
0 of 8 ▼
✓
EBITDA addbacks validated with W-2s and receipts
Post-LOI
✓
Addbacks quantifiable and verifiable
Post-LOI
✓
Trend analysis completed (3 year minimum)
Post-LOI
✓
Margins reviewed for unusual recent improvement
Post-LOI
✓
Cyclicality assessment completed (recession stress test)
Post-LOI
✓
Seasonality working capital requirement calculated
Post-LOI
✓
Revenue pull-forward risk assessed
Post-LOI
✓
"Coasting to finish line" risk assessed
Post-LOI
⚖️ Legal & Deal Structure
0 of 6 ▼
✓
Details of any pending lawsuits reviewed
Post-LOI
✓
Working capital target established with seller
Post-LOI
✓
A/R treatment agreed — retained by seller or included in sale
Post-LOI
✓
Business debt schedule reviewed
Post-LOI
✓
LOI or Purchase Agreement executed
Post-LOI
✓
Copies of invoices and sales proposals reviewed
Post-LOI
🏦 SBA Pre-Qualification Documents
0 of 15 ▼
✓
Personal Information Form (per guarantor/20%+ owner)
SBA
✓
3 years personal tax returns (per guarantor)
SBA
✓
Personal Financial Statement — SBA Form 413
SBA
✓
Joint Intent Form
SBA
✓
3 years business tax returns
SBA
✓
YTD interim financials
SBA
✓
Business debt schedule
SBA
✓
CIM or Executive Summary
SBA
✓
Letter of Intent or Purchase Agreement
SBA
✓
M&A Questionnaire
SBA
✓
Top 10 customer list by % of revenue
SBA
✓
YTD detailed AR and AP agings
SBA
✓
2 years P&L projections (first year monthly)
SBA
✓
Business Information Form
SBA
✓
Executed proposal letter
SBA

The Searcher's Guide

When does due diligence actually start?

One of the most common mistakes first-time buyers make is treating due diligence as something that happens after the LOI. In reality, due diligence is a continuous process that starts the moment you spot a deal — it just changes in depth and formality at each stage.

Pre-NDA

Preliminary Review

Teaser analysis, revenue/EBITDA sanity check, industry fit, geographic fit. Does the listing make sense at first glance?

NDA Signed

CIM Analysis

Full CIM review — management team, financials summary, customer concentration, growth story. Identify red flags before going deeper.

LOI Submitted

Formal Due Diligence

Full books open. Tax returns, bank statements, customer lists, employment contracts. This is where the 61-item checklist kicks in.

SBA Process

Lender Diligence

Your lender runs their own parallel diligence. The SBA pre-qual documents are what they need from you simultaneously.

The three questions every item answers

Every item on this checklist exists to answer one of three questions about the business:

1. Is the revenue real? Tax returns vs P&Ls vs bank statements. Addbacks validated. Revenue reconciled. No pull-forward.

2. Will it survive the transition? Key employee risk. Customer concentration. Seller dependency. License transferability.

3. Can you afford to close it? Working capital requirements. Debt schedule. Seasonality. SBA pre-qual documents ready.

What this checklist doesn't replace

This checklist is a framework — not a substitute for professional advice. Your M&A attorney, CPA, and SBA lender will each have their own diligence requirements. The checklist gives you a structured starting point so you show up to every advisor conversation prepared, not asking what to ask next.

This checklist is for informational purposes only and does not constitute legal, financial, or investment advice. Every acquisition is unique — consult your attorney, CPA, and SBA lender before making any decisions.

Track Every Deal

This checklist. Inside your deal. Tracked per item.

DealEconomics tracks your DD checklist per deal — with progress, notes, and everything connected to your deal data, DSCR analysis, and AI Deal Summary.

61-item DD checklist per deal Pipeline + Deal tracking DSCR Lender Analysis AI Deal Summary Deal Room sharing SBA Pre-Qual tracker
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