A signed Letter of Intent can feel like the finish line.
For a business owner, it often feels like the hardest part is finally over. You found a buyer. You agreed on a price. You signed the LOI. Now all that is left is to get through due diligence and close.
Then the questions start.
Can you provide the last three years of financial statements? What supports this EBITDA adjustment? Can we see every major customer contract? Why did revenue decline in this particular month? Who owns the company vehicles? What happens to this contract if the business changes hands? Why does the tax return not match the financial statements? Can you explain this employee classification?
One question leads to another. Then another.
Suddenly, what was supposed to be a few weeks of diligence starts stretching into months.
Due diligence is designed to uncover questions. That is its purpose. But the difference between a thorough process and a painfully long one often comes down to how quickly those questions can be answered.
For business owners preparing for a sale, understanding what can slow diligence down can help prevent a transaction from getting stuck in the data room.
The Data Room Is Missing Information
One of the simplest ways to slow down a transaction is also one of the most common: the buyer asks for something, and the seller does not have it readily available.
A buyer may request customer-level revenue, employee information, contracts, insurance policies, tax returns, equipment schedules, leases, corporate documents or historical financial information.
If those documents are already organized, the answer can be uploaded quickly.
If they have to be tracked down from an accountant, office manager, attorney, payroll provider or someone who left the company three years ago, the clock starts running.
And missing information rarely creates just one delay.
A buyer waiting for one document may have to pause an entire workstream. That can create additional questions, which creates additional requests, which can push other parts of diligence further down the road.
A well-organized data room is not just convenient. It can keep the entire transaction moving.
The Numbers Do Not Tie Together
Financial inconsistencies are another major source of delay.
Perhaps the revenue in the general ledger does not match the tax return. Maybe the EBITDA in the marketing materials differs from what appears in the financial statements. Perhaps an expense was classified differently from one year to the next.
None of these issues necessarily means there is a serious problem with the business.
But they have to be explained.
Buyers and their advisors are trying to understand exactly what the business earns and whether those earnings are sustainable. Quality of earnings work specifically tests the financial story presented by the seller, and current M&A guidance identifies financial statements and quality of earnings among the areas where late surprises can materially affect deal terms.
If the numbers do not reconcile, the buyer cannot simply move on.
Someone has to figure out why.
EBITDA Add-Backs Become A Debate
This is one of the areas that can create particularly lengthy discussions.
An owner may have expenses they consider personal, unusual or non-recurring and therefore believe should be added back to EBITDA.
The buyer's accounting team may see some of those expenses differently.
Was the expense truly one-time?
Will the expense disappear after closing?
Was the owner's compensation above market?
Does the business actually need to replace a service the owner currently provides?
Was a family member's compensation really discretionary?
These questions can turn a simple EBITDA calculation into a much deeper discussion about how the business actually operates.
And because EBITDA often affects the purchase price directly, buyers have an incentive to scrutinize it carefully.
Working Capital Does Not Look The Way The Buyer Expected
Working capital can also create delays, particularly when the buyer and seller have different expectations about what the business needs to operate normally.
Accounts receivable, accounts payable, inventory and other current assets and liabilities can all become part of the discussion.
A buyer may want to understand why receivables increased. Perhaps inventory levels are unusually high. Maybe the company has historically operated with very little working capital because the owner has personally managed collections or paid certain expenses.
These questions can become particularly important when the purchase agreement includes a working capital target.
The buyer wants to make sure they are receiving a business with the normal amount of working capital required to operate.
The seller wants to make sure they are not effectively giving the buyer additional value without receiving credit for it.
Getting to an agreed methodology can take time.
A Major Customer Becomes A Bigger Question
Customer concentration is another issue that can emerge during diligence.
An owner may already know that one customer represents 20% or 30% of revenue. The buyer may have already seen the number.
But then the buyer starts asking additional questions.
How long has the customer been with the company?
Is there a contract?
When does it expire?
Can the customer terminate without cause?
How profitable is the relationship?
Who owns the relationship?
Is the revenue growing or declining?
Is there anything that could cause the customer to leave after the acquisition?
The concentration itself may not kill a deal. But if the buyer discovers that the largest customer is unhappy, the contract is about to expire or the relationship depends almost entirely on the owner, the issue can become much more significant.
That can lead to additional diligence, negotiations or changes to deal structure.
Contracts Contain Surprises
Contracts that seemed routine can become important once attorneys start reading them closely.
A lease may contain a change-of-control provision.
A customer agreement may not automatically transfer to a new owner.
A supplier contract may have unusual termination rights.
A franchise agreement may require approval.
A licensing agreement may not survive an acquisition.
These issues can take time because they often require attorneys to determine what the contract actually means and then work with the relevant third party to obtain consent or modify the agreement.
This is one reason sellers should review their important contracts before going to market rather than assuming everything will transfer automatically.
Legal Or Compliance Issues Surface
Sometimes diligence uncovers something the owner simply did not realize was an issue.
It could involve an old lawsuit, an unresolved tax matter, an employee classification question, an expired license, an environmental concern, an intellectual property issue or a regulatory requirement.
Again, discovering an issue does not necessarily mean the transaction is in trouble.
But it may require additional investigation.
The buyer's attorney may need documentation. The seller may need to consult an attorney or accountant. A government agency or third party may need to be contacted.
What looked like a straightforward question can turn into a separate workstream.
The Business Changes While Diligence Is Happening
One of the most frustrating things about a long diligence process is that the business does not stop operating while everyone reviews it.
Customers leave.
Employees resign.
New contracts are signed.
Revenue changes.
A major project gets delayed.
A large customer places an unusually large order.
The company makes an acquisition.
The owner purchases equipment.
All of these things can create new questions if they materially change the business from what the buyer originally evaluated.
This is another reason transaction momentum matters.
The longer a deal remains open, the more opportunity there is for something in the underlying business to change.
The Buyer Keeps Finding New Questions
This is perhaps the biggest reason diligence can feel endless.
Diligence is not always a straight line.
A buyer asks a question.
The answer leads to another question.
That answer leads to another document.
That document reveals something that requires another explanation.
This is normal to a certain extent.
The goal of diligence is to understand the business deeply enough that the buyer is comfortable completing the transaction.
But a seller can make this process dramatically easier by providing complete answers, supporting documentation and context the first time around.
A vague answer often creates more questions.
A well-supported answer can close the issue.
Different Advisors Are Reviewing Different Parts Of The Business
There is also a practical reason diligence can take longer than owners expect.
The buyer may have several different groups involved in the process.
The accounting team is reviewing financials.
Attorneys are reviewing contracts and corporate matters.
Tax professionals are reviewing returns and liabilities.
Operational teams may be evaluating employees, systems and processes.
IT specialists may review cybersecurity and technology.
Commercial diligence may examine customers, competitors and market conditions.
These workstreams can overlap, and questions from one advisor can create additional questions for another.
Technology and cybersecurity diligence, in particular, has become a significant area of scrutiny. A 2026 Mergermarket/Ion Analytics survey found that 51% of respondents considered technology diligence the single most burdensome part of the review, while 84% expected cybersecurity scrutiny to increase over the following 12 to 24 months.
The more complex the business, the more coordination is required.
The Seller Is Slow To Respond
Sometimes the problem is not the business at all.
It is simply the response time.
If the buyer sends 20 questions on Monday and receives answers two weeks later, the entire process slows down.
That does not mean a seller needs to answer every question instantly. Owners still have a business to run.
But diligence requires someone on the seller's side who is responsible for keeping the process moving, coordinating with accountants and attorneys, gathering documents and making sure open questions do not disappear into an inbox.
The faster legitimate questions can be answered, the less opportunity there is for momentum to disappear.
What Takes Two Weeks Can Turn Into Two Months
None of these issues necessarily means a business is in trouble.
That is important for owners to understand.
Due diligence is supposed to uncover questions. A buyer who asks a lot of questions is not necessarily looking for a reason to walk away.
The problem comes when questions cannot be answered quickly, information conflicts with what the buyer was originally told, or a new issue requires a deeper investigation.
A 2026 survey of M&A professionals found that one in five respondents had experienced longer diligence timelines over the previous two years, and among those respondents, 57% said the process had added another one to three months.
That is a meaningful amount of time for a deal to remain in limbo.
The Best Way To Speed Up Due Diligence Is To Start Before It Begins
The easiest way to make diligence faster is not to become better at answering questions after the LOI.
It is to anticipate the questions before the buyer asks them.
Review your financials.
Understand your EBITDA adjustments.
Reconcile your tax returns and financial statements.
Organize customer information.
Review your major contracts.
Identify change-of-control provisions.
Document employees and compensation.
Clean up corporate records.
Understand your working capital requirements.
Make sure licenses and insurance are current.
Identify potential legal or compliance issues.
And most importantly, be honest about anything a buyer might find.
A problem that has already been identified and addressed is much easier to explain than a problem the buyer discovers first.
As recent M&A guidance has emphasized, proactive sell-side diligence can help reduce surprises and keep transactions moving because issues are identified before the buyer's review is underway.
Conclusion
Due diligence is rarely just about checking boxes.
It is the point in the transaction where a buyer takes everything they have been told about a business and tries to verify it.
That process can uncover something significant. It can also uncover dozens of small questions that, individually, are not particularly concerning but collectively can add weeks to a transaction.
For business owners, the goal should not be to avoid scrutiny.
The goal should be to make the answers easy to find.
A clean data room, consistent financial reporting, organized contracts, documented processes and a willingness to address potential issues early can make a meaningful difference in how smoothly a transaction moves from LOI to closing.
At Exit Stage Left Advisors, we often tell business owners that preparing to sell is about much more than finding a buyer. It is about making the business easy for a buyer to understand, verify and ultimately acquire.
Because once you have a signed LOI, the question is no longer whether someone wants to buy your business.
It is whether everything you have built can withstand the questions that come next.
