Proof of funds for buying a business: what brokers actually want
A business broker asking for proof of funds wants evidence that you can pay the asking price, or the equity injection on a financed deal. They will normally accept a bank or brokerage statement, a proof-of-funds letter from your bank, a lender pre-qualification letter, or a third-party verification of your balances — and only the first of those requires disclosing your account numbers and transactions.
A broker asking for proof of funds is asking one narrow question: can this person pay for this business? They are not asking for your financial history, your tax returns or your net worth. Understanding how narrow the question is makes it much easier to answer well.
What counts as proof of funds
Most brokers will accept any of the following:
- A bank or brokerage statement showing a balance at or above the figure in question. The most common, and the one that exposes the most.
- A proof-of-funds letter from your bank or advisor on letterhead. Easy to read, slow to obtain, and increasingly treated with suspicion because they are trivial to fake.
- A commitment or pre-qualification letter from an SBA lender, if the purchase is financed.
- A third-party verification of your balances, which is what FundStamp produces.
How much do you need to show?
For an unfinanced purchase, the asking price. For an SBA-backed acquisition, brokers usually want to see the equity injection plus working capital rather than the whole price. If you are unsure which the broker means, ask — the answer changes what you need to show by an order of magnitude, and no broker minds the question.
When they ask
Increasingly early. Ten years ago proof of funds arrived with the letter of intent. Today many brokers want it before releasing the confidential information memorandum, because the volume of unqualified enquiry has risen and reviewing a CIM is a real disclosure by the seller. If it feels early, it is not personal.
What not to send
A full statement is far more than the question requires. It carries your account numbers, every transaction that month, and usually your home address — to someone you met last week, over email, with no idea where the file ends up. Blacking it out is harder than it looks: a box drawn over a number in most PDF editors covers the pixels and leaves the text underneath, selectable.
The better instinct is to send something built to answer only the question asked.
FundStamp connects your brokerage and bank read-only through Plaid, or reads a statement you upload and does not keep, and produces a link a broker can open: your verified funds, the institutions holding them, and the date they were read. No account numbers, no transactions, no statement. Free, with no time limit.
Get my proof of fundsSee an exampleA note on speed
The buyers who get taken seriously are usually the ones who answer this within a day. Brokers are triaging, and an enquiry that stalls at proof of funds reads as an enquiry that will stall at diligence.
Common questions
- What counts as proof of funds when buying a business?
- Business brokers commonly accept a bank or brokerage statement showing a sufficient balance, a proof-of-funds letter from a bank or advisor on letterhead, a pre-qualification or commitment letter from an SBA lender, or a third-party verification of your balances such as a FundStamp link.
- How much proof of funds does a business broker need to see?
- For an unfinanced purchase, the asking price. For an SBA-backed acquisition, brokers usually want to see the equity injection plus working capital rather than the full price. The two figures differ by an order of magnitude, so it is worth asking the broker which they mean.
- When do brokers ask for proof of funds?
- Increasingly before releasing the confidential information memorandum, rather than at the letter of intent stage. Reviewing a CIM is a real disclosure by the seller, so brokers use proof of funds to filter unqualified enquiries first.