Offers & due diligence
How long does due diligence usually take when selling a midsize company?
How long due diligence usually runs for a midsize company, what makes it faster or slower, and how sellers can shorten it.
By Michael D. Rubin, CEO & Founder · September 2026 · 912 words
For a midsize company, due diligence commonly runs from about one month to three months after a letter of intent is signed, and longer when the records are disorganized, the buyer relies on a bank or SBA loan, or a private equity buyer commissions a full review of earnings. How prepared you are is the biggest factor within your control.
Due diligence is the buyer's detailed investigation of your company before it commits to the final purchase agreement: finances, taxes, contracts, customers, employees, operations and legal matters. It usually happens during an exclusivity period set in the letter of intent, which is why its length matters so much to you.
What sets the pace
No two diligence periods are alike, because the length depends less on the size of the company than on how much work the buyer has to do to trust the numbers. A well-prepared company with a cash buyer can finish quickly. The same company sold to a buyer relying on a lender and an outside accounting firm will take longer, however organized it is. These are the factors that make the difference:
| Factor | Tends to be faster | Tends to be slower |
|---|---|---|
| Financial records | Monthly accrual statements that reconcile to tax returns | Cash-basis books, unexplained differences, missing years |
| Buyer type | A strategic or cash buyer with a small team | Private equity with outside accountants, lawyers and lenders |
| Financing | All cash or committed financing | A bank or SBA loan that requires underwriting and appraisals |
| Review of earnings | None, or a limited scope | A full quality of earnings review of EBITDA and add-backs by an outside accounting firm |
| Third-party consents | Few contracts need consent to transfer | Landlord, key customers or licensing bodies must approve |
| Operations | Simple, well-documented operations | Environmental questions, regulated licenses, complex inventory |
The workstreams running in parallel
These run at the same time, so the slowest one sets the timeline. In many deals that is the review of earnings or the buyer's financing, not the legal work. Expect the heaviest requests in the first few weeks, then a second round of narrower follow-up questions once the buyer's team has read the first batch.
- Financial: three or more years of statements and tax returns, monthly results, add-backs, working capital and debt
- Commercial: customer lists and concentration, contracts, pricing, pipeline, and sometimes calls with key customers near the end
- Legal: entity documents, contracts, leases, litigation, intellectual property, licenses and permits
- People: employee roster, pay and benefits, key-person agreements, and how contractors are classified
- Operations: equipment, facilities, systems, insurance, safety and environmental matters
Why a long diligence period is a risk for the seller
Time works against sellers in diligence. Every extra week is a week in which a customer can leave, a key employee can hear rumors, a month can come in soft, or the buyer's enthusiasm can fade. A long diligence period also means a long exclusivity period, during which other interested buyers move on to other opportunities. If the deal then fails, you return to a market that has cooled, with a company some buyers have already seen.
Owner fatigue is real too. Answering hundreds of requests while running a company wears people down, and tired sellers make concessions they would not make on a fresh day. The long read on what causes a sale to fall apart in due diligence covers the failures in detail.
How to shorten it
The goal is not to rush the buyer. A buyer that feels hurried may slow down or add conditions. The goal is to make sure no week is lost waiting on the seller, so the timeline is set by the buyer's genuine work rather than by missing documents.
- Build a data room, a secure online folder, before going to market and organize it by the workstreams above
- Have your own accountant review the financials first, so problems surface on your timetable
- Keep a written add-back schedule with support for every item
- Name one person in the company to handle requests, and agree a response time with your advisor
- Put a diligence timeline and an exclusivity end date in the letter of intent
- Talk to your landlord, and check key contracts for consent requirements, before a buyer asks
Where due diligence sits in the whole sale
Diligence is only one stage. Before it come preparation, marketing, buyer meetings and letters of intent; after it come the purchase agreement and closing. For a midsize company, starting preparation a year or two ahead through pre-exit consulting moves much of the diligence work to a time when there is no deadline and no buyer watching.
Keep the whole timeline in view when you plan. If you want to close by a certain date, for a retirement, a family event or before a slow season, count backward: a few weeks for the purchase agreement and closing, one to three months for diligence, and before that the time needed to market the company and receive offers.
How MDR & Associates keeps diligence moving
Due diligence is step eight of our ten-step process. Because every company goes to market with a financial recast and a confidential marketing package, many of a buyer's first questions are answered before diligence begins. Buyers also complete a financial profile proving they can fund the purchase before they see details. Our typical timeline from engagement to funds wired is three to nine months; we have closed in eight days and taken eighteen months. To talk about your own timeline, contact us.
Where this fitsHow a business sale works, step by step →