What is involved in performing “due diligence”?
A. It usually includes a site inspection, verification of assets, verification of permits, licenses, liens etc., review of all the financial (historical and projected) statements, meeting with principals and personnel in active management, evaluating the marketing strategy, examining employee agreements and benefit plans, investigating environmental issues, legal matters, foreign operations, product issues, suppliers, overlooked information sources and tax issues. The funder or his representative will also engage and/or consult with accountancy firm, law firm, construction firm, appraisal company and marketing firm. Sometimes not all of these tasks are necessary.
