If you are planning to sell in the next few years, start with the broader steps in our guide to making your business lender-ready before you retire. Then examine the eight issues below. Each can change how much debt a buyer can raise and, in turn, how much cash you receive at closing.

1. Earnings That Depend on Disputed Add-Backs

A seller may present adjusted earnings that add back personal expenses, unusual legal bills, above-market owner compensation, or costs expected to disappear after the sale. Some adjustments are legitimate. Others are hard to defend.

If the buyer’s lender rejects an add-back, the earnings figure used to size the loan falls. The effect can be larger than the disputed expense itself because lower earnings may reduce both the lender’s leverage limit and its debt service coverage.

Prepare an adjustment schedule that identifies each item, the period it relates to, why it will not recur, and the invoices, payroll records, or ledger entries supporting it. Treat any add-back you cannot document as uncertain when evaluating offers.

2. A Working Capital Shortfall Hidden Behind Profit

A profitable company can still need substantial cash to operate. Slow-paying customers, inventory buildup, supplier deposits, and seasonal swings may leave the buyer needing more liquidity immediately after closing.

The lender will look beyond EBITDA to understand cash conversion and the amount of working capital the business must retain. If the buyer has to fund a larger operating cushion, less of its available capital may be left for the purchase price.

Build a monthly history of receivables, payables, inventory, and cash balances. Explain seasonal peaks and investigate overdue receivables before they become a diligence finding. Agreeing a realistic working capital target early can also reduce the risk of a closing price adjustment.

3. Revenue Concentrated in One Customer or Contract

Suppose one customer represents 35% of revenue. A lender will ask what happens to loan repayments if that relationship ends, even if the customer has been loyal for years.

Review your top customers by revenue, gross profit, contract length, and renewal history. Check whether the contracts contain termination or change-of-control provisions. Where possible, renew key agreements before the sale and document the relationship across multiple people in the business rather than leaving it with the owner alone.

You may not be able to diversify revenue quickly. You can still give a lender better evidence of its durability.

4. Contracts That May Not Survive the Sale

Buyers can inherit a business operationally while losing the legal right to use something essential. A premises lease may require landlord consent. A major customer agreement may prohibit assignment. A license or supplier arrangement may need approval after a change of control.

Make a list of agreements the business cannot operate without and have counsel identify the relevant assignment, consent, termination, and change-of-control language. Resolve foreseeable problems before the buyer’s lender discovers that a key revenue stream or operating location is uncertain.

5. An Owner Who Cannot Be Replaced

If customers call you for every decision, staff wait for you to approve pricing, and suppliers deal only with you, the lender has to assess what earnings will look like when you leave.

Give managers real responsibility before the sale. Introduce them to important customers and suppliers, document approval limits, and show how recurring decisions are made. A transition agreement can help, but it does not replace a management team capable of running the company after your departure.

6. Financial Records That Do Not Reconcile

Differences between tax returns, management accounts, bank deposits, and sales reports invite questions. Some have straightforward explanations, such as accounting timing or a change in policy. Unexplained differences make it harder for a lender to rely on the numbers.

Ask your accountant to reconcile the major figures across the records a buyer is likely to request. Close the books consistently each month, record adjustments clearly, and retain support for significant transactions. If the accounting basis changed, show when it changed and its effect on reported results.

7. Existing Debt and Security Interests

A lender financing the acquisition needs to know which creditors already have claims over the company’s assets. Equipment loans, lines of credit, shareholder loans, guarantees, and registered liens can all affect the closing structure.

Prepare a current debt schedule showing balances, lenders, collateral, maturity dates, prepayment terms, and required releases. Find out early what it will take to repay or refinance each obligation at closing. A lien that no one planned to discharge can hold up an otherwise ready transaction.

8. A Price That Only Works Under an Optimistic Forecast

Buyers may justify an offer using planned growth, new contracts, or savings they expect to achieve after the acquisition. Their lender may give little or no credit for improvements that have not yet appeared in the financial results.

Separate historical performance from forecasts. For each projected improvement, show its basis: a signed contract, a documented price increase, an implemented cost reduction, or a measurable sales pipeline. Then ask whether the deal still works if the lender sizes debt using current, supportable cash flow.

Prepare for the Loan Before You Negotiate the Price

You do not need a lender’s credit approval before putting your business up for sale. You do need to understand which parts of your asking price depend on the buyer obtaining debt.

Clean records, durable customer revenue, transferable contracts, manageable working capital, and a capable team give a lender fewer reasons to cut the loan. They also give you a clearer basis for judging offers before you commit to a buyer.