Proof of funds

Check the amount, owner and date

Evidence might include an appropriately redacted statement or bank confirmation, subject to verification. Check whose funds they are, whether the buyer can use them and what date the document covers. Money reserved for another obligation is not automatically available for this purchase.

The SBA buyer cash exercise separates a paid deposit from fresh funds still needed after the deal changes. It also distinguishes accessible cash from a possible gift. Equal proposed dollars do not supply the same evidence.

The buyer funds-evidence exercise combines fictional account balances from different dates after a transfer. The total counts the same transferred cash twice, although each account balance is correct. Readers can practice a date check before reviewing ownership, permitted use and the amount needed for the purchase.

The SEC distinguishes assets and net worth from cash flows. The acquisition question goes further: which money can actually be committed here? Its financial-statement guide does not prescribe a proof-of-funds format. (SEC guide)

Reconcile a fictional funding gap

Assume a $750,000 purchase price, $50,000 of fees and $100,000 of initial operating cash. Total uses are $900,000. The buyer has a $250,000 bank balance but reserves $100,000 for other needs, leaving $150,000 available.

A proposed $600,000 loan and $100,000 seller note bring proposed sources to $850,000, leaving a $50,000 gap. The loan is still conditional. The note defers price; it is not cash to spend on fees or payroll.

Equivalently, cash uses are $800,000 after the deferred price. Available buyer cash plus the proposed loan is $750,000. The same $50,000 gap remains. These invented figures demonstrate reconciliation, not loan eligibility or a recommended cash reserve.

The regional-buyer sale guide asks whether the signing entity has a binding right to the funds shown by the wider group. It pairs that funding question with internal approvals and the operating budget. A familiar local brand still needs evidence for the specific purchase it proposes.

Verify without unnecessary disclosure

Confirm institutional contact details independently and obtain appropriate permission for verification. Do not treat payment instructions as proof or request banking credentials. Store sensitive evidence with limited access and agreed retention.

SBA’s 7(a) process runs through lenders and has eligibility and repayment requirements. A proposed use of that program still needs review. (SBA overview)

Use the buyer comparison to apply the same standard to each bidder. A letter of intent should not be mistaken for proof that the remaining money is committed.