I'm selling my logistics company and a buyer's lender is asking for proof of cash. We provided 12 months of bank statements, but the broker says that's not enough, they want a letter from our CPA. Is that normal? What actually counts as valid proof? I don't want to scare off the buyer but also don't want to hand over my entire financial history unnecessarily.
Proof of Cash
Bank statements vs broker letters: What is valid proof of cash?
Bank statements are the primary source. A CPA letter is just a summary. Lenders often want both, but the statements should be sufficient.
i went through this last year. The buyer's lender wanted bank statements AND a letter from our accountant confirming the balances. It felt redundant, but we complied. Took a week to get the letter. Annoying but not a dealbreaker.
What exactly is the broker saying is missing? A CPA letter usually just verifies what the statements show. If they want assurance, they might be looking for a letter that explicitly states the cash is unrestricted and available for the owner's benefit. That's different from just a balance confirmation.
Our lender accepted bank statements for the last 6 months plus a letter from our bookkeeper. No CPA needed. Maybe it depends on the lender.
A broker letteer is typically when a third party holds funds, like a Brokerage account. For a business operating account, bank statements are the standard. If the broker is insisting on a CPA letter, ask them to specify the exact wording they need. Often it's just a formality to satisfy the underwriter. Don't hand over more than necessary, but also don't dig in over something simple.
Thanks, all. The broker specifically wants a letter confirming that the csah balances shown on the statements are accurate and not borrowed. I've asked our CPA to draft something. Will update if it works.
That's a reasonable request. Lenders want to know the cash isn't from a loan that needcs to be repaid. A simple letter from your CPA should do it.
I've seen buyers accept a signed statement from the owner backed by statements. But if the lender is driving the deal, you'll probably have to Give them what they want. It's not worth fighting over.
Make sure the letter doesn't include any language that could be interpreted as a guarantee. Just stick to the facts. Our CPA charged $300 for it and it was fine.
If the broker is asking for a letter, it's likely because their lender requires it. It's a common request. I wouldn't read too much into it.