Show Me the Money: Why Proof of Funds Is Crucial for Restaurant Brokers and Sellers
- Jimmy Carey
- May 26
- 8 min read
In the fast-paced and often confidential world of Restaurant sales, few things are as frustrating as wasted time. A Restaurant Broker lines up a serious seller. A buyer expresses interest. Everyone seems excited. But just as things start moving—a sudden stall. Why?
The buyer can’t verify that they actually have the money.
This is where Proof of Funds (POF) becomes a deal-maker or a deal-breaker.
Whether you’re buying your first café or exploring a restaurant for sale through Jimmy Carey Commercial Real Estate, understanding the role of POF in Restaurant Brokerage is critical. It’s not just a document. It’s a signal—to Brokers, Sellers, and Landlords—that you're serious, qualified, and ready to transact.
📺 Watch this video for a quick explanation:Why Proof of Funds is Crucial When Buying a Restaurant
What Is Proof of Funds?
Proof of Funds is exactly what it sounds like—evidence that a buyer has the financial means to purchase a business. But not all POF is created equal. Brokers and Sellers, including top professionals like those at Jimmy Carey Commercial Real Estate, are typically looking for documentation that shows liquid or near-liquid assets that can be used for the acquisition.
Acceptable forms of POF include:
Recent bank statements (within the last 30–60 days)
Investment account statements
SBA pre-approval letters or loan term sheets
A letter from a financial institution verifying available funds
Escrow confirmation showing deposited earnest money
The document should clearly show:
The buyer’s name
The institution’s name and contact
The available balance
The date of the statement
Buyers can (and should) redact account numbers or other sensitive personal information, but the core details need to remain visible to verify authenticity.
Why Proof of Funds Matters in Restaurant Sales
The Restaurant Brokerage world is unique. Unlike traditional business sectors, food and beverage deals often involve leased spaces, perishable assets, and time-sensitive operational risks. Margins are tight, emotions can run high, and confidentiality is paramount.
Requiring proof of funds upfront helps create a safe, efficient, and professional environment for all parties involved. Here’s why:
1. It Filters Out Tire-Kickers
Every Restaurant Broker has had conversations with “buyers” who are just exploring or testing the waters—but don’t actually have the means to buy. Requiring POF early in the process is one of the most effective ways to qualify serious buyers and avoid wasting time. It acts as an initial filter to separate serious, financially capable buyers from those who are simply curious, underprepared, or not truly committed.
In some cases, it even helps protect the business from competitors posing as buyers, whose real intention is to access privileged data—not to purchase the Restaurant.
2. It Protects Sensitive Business Information
When a Restaurant is being sold, the seller must eventually disclose critical and highly confidential business information. This includes not just basic financials like tax returns, profit and loss statements, and sales reports, but also:
Lease agreements and lease abstracts
Payroll records and labor costs
Vendor contracts and pricing
Technology stack and subscription contracts
Sales mix and customer metrics
Standard Operating Procedure (SOP) information
These are not the types of documents a business owner wants circulating freely. Sharing them without first confirming a buyer’s financial legitimacy can jeopardize not just the deal—but the business itself.
When a buyer submits POF, they signal that they have the financial capability and seriousness to justify being included in confidential discussions. It reassures the seller that they’re not handing over the inner workings of their restaurant to a curious onlooker, a competitor, or someone who lacks the means to make an offer.
POF establishes trust. It allows the seller to move forward with the release of a Confidential Information Memorandum (CIM) and supporting documentation, knowing that the recipient is financially qualified and has “skin in the game.”
Real Estate & Landlord Considerations: Why Proof of Funds Is Crucial Beyond the Sale
In Restaurant transactions, the real estate component is just as critical as the business itself. In fact, in many deals—especially asset sales or leasehold transfers—the fate of the transaction hinges less on the quality of the Restaurant’s concept and more on how the incoming buyer is evaluated by the landlord.
When a buyer is acquiring a restaurant for sale, they’re not just buying equipment, goodwill, and customer traffic—they’re stepping into a landlord-tenant relationship. And that’s a relationship built on financial trust and risk assessment.
Lease Assignments: Landlord Approval Isn’t Optional
Nearly every commercial lease includes a clause requiring landlord approval for assignment. Landlords typically request:
Personal Financial Statement (PFS) and Credit Reports
Bank statements or portfolio summaries
Business plan or executive summary
Industry experience and operator track record
Franchise buyers or multi-unit operators may also need to provide:
Corporate guarantees
Sales performance from other units
Landlord references
Lease Negotiations for New Terms
In cases where the buyer negotiates a new lease, landlords often require:
Higher security deposits
Shorter initial terms
Adjusted CAM charges
Personal Guarantees
This is why POF matters not just for buying the business—but also for securing and keeping the space.
When to Ask for Proof of Funds
From a process standpoint, many buyers expect the first step to be signing a Non-Disclosure Agreement (NDA). However, in today’s fast-paced and highly confidential Restaurant Brokerage environment, that approach is becoming less common among experienced brokers.
In fact, most seasoned Restaurant Brokers—including those at Jimmy Carey Commercial Real Estate—now request POF before even sending an NDA.
Why? Because even an NDA opens the door to sensitive information. POF ensures the buyer has the intent and ability to move forward.
The Restaurant Broker Process:
Buyer inquiry
POF request
NDA sent
Buyer profile collected
CIM and documents released
This safeguards the seller’s information and prioritizes serious, qualified buyers.
💡 Tips for Buyers
If you're serious about acquiring a restaurant for sale:
✅ Have POF documents ready
✅ Be transparent about funding
✅ Follow broker protocols
✅ Present yourself as a professional
💼 Tips for Sellers and Brokers
✔️ Use soft language when requesting POF
✔️ Accept CPA letters or pre-approval in some cases
✔️ Create a system: POF→NDA → Buyer Profile → CIM
✔️ Protect confidentiality while moving the deal forward
❓ Q&A: Common Questions About Proof of Funds in Restaurant Transactions
Q: What if I’m using an SBA loan?A: Provide a lender pre-qualification letter and proof of down payment or working capital.
Q: Why POF before the NDA?A: Because NDAs unlock sensitive information. Brokers want to confirm financial seriousness first.
Q: Can I redact account numbers?A: Yes. Just leave the name, date, institution, and available balance visible.
Q: What if I have a financial partner?A: Disclose their role and submit documentation verifying their commitment.
Q: How current should my POF be?A: Ideally no older than 30 to 60 days.
Q: Can POF improve my negotiation position?A: Absolutely. It proves you’re real.📺 Watch this short video on why POF gives buyers an edge in competitive restaurant transactions.
Q: What happens if a buyer refuses to provide proof of funds?A: In most cases, the process stops there. Brokers and sellers will not release confidential materials or schedule walkthroughs without verifying financial capacity. It’s a standard step in serious business transactions, and refusing to comply raises red flags.
Q: Does proof of funds guarantee a buyer will close the deal?A: No—POF shows capacity, not commitment. It’s the first step in qualifying a buyer, but closing the deal also depends on due diligence, lease negotiations, and final contract terms. Still, without POF, a deal rarely moves forward in the first place.
Q: Can a personal financial statement replace proof of funds?A: Sometimes. A PFS is helpful, especially when evaluating overall net worth or long-term stability, but most brokers will still require a separate document verifying liquid funds available for the purchase.
Q: I'm interested in multiple listings—do I need to submit POF for each one?A: If you’re seriously evaluating several businesses simultaneously, one general proof of funds letter may suffice initially. However, some brokers will request listing-specific documentation once you start moving forward with due diligence or negotiations.
🎥 Want more insights like this?Subscribe to the Jimmy Carey Commercial Real Estate YouTube Channel for expert videos on buying and selling restaurants, lease negotiations, and commercial real estate tips.
📌 Case Study: How Proof of Funds Protected a Deal—and a Seller’s Business
A local restaurant group in the Atlanta area contacted Jimmy Carey Commercial Real Estate to list one of their successful fast-casual concepts for sale. The seller had built a loyal customer base, maintained healthy profit margins, and had a long-term lease in place—making it a highly attractive opportunity.
Within hours of listing, the business drew several inquiries. One buyer was especially enthusiastic—pushing for access to tax returns, payroll data, and business details without providing any financial credentials.
Following our protocol as seasoned Restaurant Brokers, we required proof of funds, a signed NDA and screening before releasing confidential materials. The buyer resisted and eventually disappeared from the process.
Meanwhile, another buyer promptly submitted a redacted bank statement showing liquid funds of over $250,000 and an SBA lender pre-approval letter. We scheduled a walkthrough, released the CIM, and coordinated direct communication with the landlord. This buyer ultimately moved forward and closed on the business.
Had the seller released sensitive information to the first party without POF, it could have compromised employee confidentiality and lease negotiations—potentially damaging the business before a deal was even in place.
Lesson: Proof of Funds isn't just a gatekeeping tool. It's a vital part of protecting both the deal and the integrity of the Seller’s Restaurant Business.
Final Thoughts: Show Me, Don’t Tell Me About Proof of Funds
Buying or selling a Restaurant is a significant business decision. Proof of Funds is not a formality—it’s a foundation. It builds trust, shows seriousness, protects confidentiality, and accelerates deal momentum.
It’s a two-way street. Buyers want detailed financials and insights to make informed decisions. Brokers and Sellers want to ensure they’re working with someone qualified and serious. POF bridges that gap.
For Sellers, POF filters out distractions and keeps the process efficient For Brokers, like those at Jimmy Carey Commercial Real Estate, it protects the integrity of the transaction. For Buyers, it’s a badge of credibility—and your first step toward negotiating and owning a successful Food & Beverage business.
So if you’re ready to do business, don’t just say you’re serious—show it!
🚀 Ready to Buy or Sell a Restaurant?
Whether you're looking to acquire your next Restaurant or prepare your business for a successful sale, Jimmy Carey Commercial Real Estate is your trusted partner in the Atlanta food and beverage market.
✅ Work with an expert Restaurant Broker who understands Restaurants from the inside out
✅ Access exclusive listings of restaurants for sale
✅ Receive a complimentary business valuation or buyer consultation
✅ Navigate lease negotiations, NDAs, and Proof of Funds with confidence
📞 Let’s talk.Jimmy Carey – Restaurant Broker
Coldwell Banker Commercial Metro Brokers
📍 Atlanta, Georgia
📱 305-788-8207
👉 Contact Jimmy Carey to schedule a confidential consultation today.
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