Medro Updates

Buying a Business? Verify the Agreements Behind the Cash Flow

By Don McClain

By Don McClain | Founder & Principal, Medro Advisors

A business acquisition depends on more than the purchase price. Customer contracts, leases, supplier terms and operating agreements can affect revenue, expenses and the cash needed after closing.

Before finalizing a financing plan, buyers should review which agreements require notice, consent or replacement, and model the cost and timing of unresolved items. The SBA recommends reviewing contracts, leases, cash flow and inventory when evaluating an existing business.