A buyer’s earnest money deposit is
to assure that he or she will complete a transaction after agreeing to do so. The
nature of an offer to purchase a business, as opposed to real property, is
that the seller builds certain contingencies that allows the buyer
to prove the facts presented.
Some of these facts may be:
- Are the presented financial documents correct?
- Can I obtain the lease that I need?
- What happens if I
cannot receive the needed outside financing?
Once these questions are answered to the buyer's satisfaction, he or she will remove
them in writing from the offer. Remember that failure to complete the deal
will put that deposit at risk. Therefore, the buyer will show all due diligence when capital is on the table.