Having one prepared in advanced will establish much
credibility and will instantly put you on the "serious buyer" list of
any broker
or seller. There
aren't many things that
impress a broker as much with a buyer prospect as when they provide
them with their own
personal financial statement.
It shows a serious and prepared buyer, and hopefully a financially qualified one!
A basic personal financial statement simply details a list of your assets and liabilities and a net worth total.
Some buyers generally have some misgivings about this part, and some are apprehensive about filling one out, which is understandable at first, but wrong.
Frankly speaking, if a buyer is asking a seller to provide their financials, it is not unreasonable for them to ask for yours. It is important for a broker and seller to know that you will be able to complete the deal.
Releasing financials will not put you at risk or compromise
your negotiating position. Most
brokers
do not run credit and they're not asking where you keep your money or
asking
for account numbers. Furthermore, brokers take this information very seriously and keep it strictly confidential.
Some buyers think that if the seller or broker knows how much capital and assets they have they may not negotiating leverage. Nothing could be further from the truth, it will most likely improve your position because the brokers and seller will appreciate that you have the resources to get the deal done and will be able to take you seriously from the beginning.
You also set yourself apart from the tire-kickers competing for our attention.
Brokers also want to determine if you have the financials execute the deal and the resources for inventory and working capital and if you'll be able to qualify for a third-party loan. Sometimes a particular deal will be very hard to finance via a bank it will require more liquid capital.
