OnwardLearn · Selling · Step 9. Prepare to close
When a buyer comes back with a lower number
The short version
- A buyer asking to lower the price after the [letter of intent](/learn/reference#letter-of-intent "The offer document. It sets out the price, the structure and the main terms, and starts diligence.") is called a retrade. It is common.
- Some retrades are fair: diligence found something real. Some are tactics.
- Ask for the reason in writing, with the evidence behind it.
- You have more options than yes or no: change the terms, share the risk or walk away.
- Clean books, early disclosure and strong results during the sale are the best protection.
Why retrades happen
Diligence found something. Earnings were lower than presented. A customer left. Equipment needs replacing. An add-back did not hold up.
The lender's valuation came in low. The loan cannot cover the agreed price. Lesson 9.3 covers this.
Results slipped during the sale. Lesson 9.2 covers this.
Tactics. Some buyers lower the price late because they know you have stopped talking to other buyers.
How to respond
- Ask for the reason in writing, with the specific findings and numbers.
- Check it with your accountant and attorney. Is the finding real? Is the price change in proportion to it?
- Look at your options.
Your options
- Accept it, if the finding is real and the new price still works for you.
- Counter. A smaller reduction, backed by your own evidence.
- Change the terms instead of the price. For example, a rebate tied to the concern (Lesson 8.5), money held back until a risk passes (Lesson 9.6) or a different role for you after closing.
- Fix the problem. A lease extension, a signed customer renewal or a repair.
- Walk away, if the new number no longer meets your needs. Lesson 3.1 covers knowing that in advance.
Protect yourself before it happens
- Disclose weaknesses before the letter of intent. Lesson 6.4 covers this.
- Make sure your add-backs have records. Lesson 5.3 covers this.
- Keep the business strong until closing.
- Keep exclusivity short and tied to milestones. Lesson 8.2 covers this.
Take this to your own people
The questions for this topic, for your attorney, your accountant or your lender.
- For your accountant: "Is the buyer's finding accurate, and is the price change in proportion to it?" Listen for: an independent check of their numbers, not just agreement.
- For your M&A attorney: "Instead of lowering the price, which terms could address the buyer's concern?" Listen for: specific alternatives, and which ones the buyer's lender would allow.
- For yourself: "At this new price, am I still better off selling than keeping the business?" Listen for: an answer grounded in your numbers from Lesson 3.7, not frustration.
This names the question. Your CPA, your M&A attorney and your lender answer it for your situation.
When you’re ready
How a sale actually happens, in plain language — before you decide anything. Make a free account — nothing is shared