Why is a broker asking for proof of funds before showing me anything?

Because the confidential information memorandum contains the seller's real financials and enough detail to identify the business, so releasing it is a genuine disclosure. Proof of funds is the cheapest filter that removes competitors and unqualified enquiries before that disclosure happens. Being asked is routine, and answering the same day materially improves how seriously a buyer is taken.

Because the confidential information memorandum is not marketing material. It contains the seller’s real financials, customer concentration, staff, and often enough detail to identify the business. Releasing it is a disclosure the seller has to live with.

What the broker is protecting against

• Competitors. The most damaging reader of a CIM is a rival who has no intention of buying.
• Volume. Listings attract far more enquiry than they used to, and most of it is not real. A broker with fifty enquiries and one seller has to triage.
• Their own time. Every unqualified buyer taken to diligence costs weeks that the seller pays for.

A signed NDA does none of this work: it is a promise, enforceable only after the harm. Proof of funds is the cheapest filter that actually filters.

What it says about you

Being asked is not a judgement. Answering quickly is a signal — in a stack of enquiries, the buyer who returns a verification the same day moves to the top, and the one who goes quiet for a week is assumed to have been browsing.

Reasonable pushback

Two questions are entirely fair to ask before you send anything:

1. What figure do you need to see? The asking price and the equity injection on a financed deal are very different numbers.
2. Who will see it, and will it be forwarded to the seller? A reasonable broker will answer plainly.

What is not reasonable is being asked for a full statement when a verified figure would answer the question.

If you are a broker reading this

Buyers comply faster when the ask is specific and the method is easy. Naming a figure and pointing at a two-minute way to evidence it converts materially better than “please send proof of funds”, which quietly asks the buyer to decide how much of their financial life to hand over.

Common questions

Is it normal for a broker to ask for proof of funds before sending a CIM?

Yes, and it has become more common. A confidential information memorandum contains the seller's real financials and often enough detail to identify the business, so brokers increasingly qualify buyers before releasing it rather than at the letter-of-intent stage.

Why is a signed NDA not enough for the broker?

An NDA is a promise that is enforceable only after the harm has occurred. It does not stop a competitor reading a seller's financials; proof of funds filters out enquiries that were never going to buy, before the disclosure is made.

What should I ask a broker before sending proof of funds?

Two things: what figure they need to see, since the asking price and the equity injection on a financed deal are very different numbers; and who will see the evidence, including whether it will be forwarded to the seller.