For Buyers & Searchers

Buy-side financial diligence, QoE and pre-LOI underwriting.

From initial deal screening through post-LOI financial diligence, we help buyers determine what a business actually earns, whether the purchase price is supportable, and how the transaction holds up under debt. Choose the level of diligence that matches where you are in the deal.

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A buyer reviewing SBA acquisition financing with a lender

The problem

The offer decision happens on the seller's numbers

A broker P&L is built to sell a business, not to underwrite one. Add-backs can be aggressive, one-time items get folded into earnings, and customer concentration, working-capital requirements, and earnings-quality issues may not surface until diligence is underway. We help buyers identify those issues at the appropriate stage: from pre-LOI underwriting and targeted QoE Lite reviews to full post-LOI Quality of Earnings diligence.

Choose your level of diligence

Three levels of buy-side financial diligence

The right level of diligence depends on where you are in the transaction. From an initial pre-LOI screen to a full Quality of Earnings review, we match the depth of analysis to the decision you need to make.

Pre-LOI Underwriting

Is this deal worth pursuing at the proposed price and structure?

Best for

Before the LOI, or before committing significant diligence expense to a deal.

What we analyze

The broker or seller financials as presented: normalized SDE and EBITDA, questionable or aggressive add-backs, purchase-price supportability against closed-transaction comparables, debt-service coverage stress-testing where the deal is financed, customer concentration, working-capital observations, and the financial red flags that change offers.

What you get

A clear financial read to support a pursue, renegotiate, restructure, investigate, or walk decision, plus a prioritized list of what to verify in formal diligence. A pre-LOI review is an offer-stage screen, not a full QoE, and is scoped accordingly.

QoE Lite

Do the earnings and the major financial risks hold up under focused testing?

Best for

Focused financial diligence when the transaction requires more than an initial screen but does not warrant the breadth of a full Quality of Earnings engagement.

What we analyze

Targeted testing of normalized earnings; support for the material add-backs; revenue and expense trends; concentration and financial dependencies; targeted financial-statement and general-ledger analysis where appropriate; selected balance-sheet and working-capital issues when relevant.

What you get

Focused written diligence findings on the earnings and the issues that matter most to the transaction. QoE Lite is deliberately narrower than a full QoE, not a discounted version of one.

Buy-Side Quality of Earnings

What are the sustainable earnings of the business I am actually buying, and what could affect valuation, financing, negotiation, or closing?

Best for

Post-LOI, formal financial diligence.

What we analyze

Historical earnings and normalization in depth: revenue and expense quality, add-back testing, earnings sustainability, trend and margin analysis, customer concentration, balance-sheet and working-capital observations, cash-to-accrual and accounting-quality issues where relevant, and the unusual items specific to the deal.

What you get

Defensible written financial diligence findings that support your financing, valuation, negotiation, and closing decisions.

Each scope is financial and tax advisory analysis, not an audit, review under attestation standards, or assurance engagement.

Not sure which level you need?

Send us the listing and whatever financials you have. We will recommend the appropriate scope based on where you are in the transaction, the size of the deal, and the financial risks that need to be tested.

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How it works

From first look to ownership

Send the deal

The listing, the broker P&L, and whatever financials you have. No formatting required.

We identify the right scope

We determine whether the deal calls for Pre-LOI Underwriting, QoE Lite, or a full Buy-Side Quality of Earnings review. Some engagements start and end pre-LOI; others begin directly at QoE.

We perform the analysis

The work is scoped to the transaction stage and the financial questions that actually need answering, from earnings recasting and coverage stress-testing to full earnings-quality diligence.

You get a clear financial read

Written findings calibrated to your stage: whether to proceed, renegotiate, investigate further, finance, or close.

Who it's for

Built for searchers and independent sponsors

Self-funded searchers, independent sponsors, and first-time buyers acquiring privately held businesses, including SBA-financed transactions in the $500K to $10M range. Whether you are deciding what to offer, validating the earnings after an LOI, or preparing for financing and closing, we match the level of financial diligence to where the deal actually stands.

Questions

Common questions

Do I need pre-LOI underwriting, QoE Lite, or a full Quality of Earnings review?

It depends on where you are in the transaction and the level of diligence the deal requires. Pre-LOI underwriting helps determine whether a deal is worth pursuing before committing significant time and capital. QoE Lite provides a more focused review of normalized earnings and key financial risks, while a full Buy-Side QoE provides deeper post-LOI financial diligence into the quality and sustainability of earnings. We'll help you determine the appropriate scope based on your deal.

How is this different from a broker's numbers?

A broker presents the earnings. We question them. We recast SDE and EBITDA to a basis a lender would accept and flag the add-backs that will not survive scrutiny.

Do you provide legal or tax opinions?

We provide financial and tax advisory analysis to inform your decisions. Legal work and formal tax opinions remain with your attorney and your own advisor.

What do I need to get started?

The listing and whatever financials you have. A short call is usually enough to scope whether the deal is worth a closer look.

Evaluating a deal right now?

A confidential call is the fastest way to find out whether the numbers hold up.

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NexTax Advisory provides financial and tax advisory services. It does not provide legal services or formal audit or attest engagements. Analysis is intended to inform your decisions alongside your attorney, lender, and independent quality-of-earnings provider, not to replace them.