The broker on the listing represents the seller.

The broker who sent you the listing, the teaser and the NDA is retained by the seller and paid out of the seller’s proceeds. That person owes the seller loyalty and confidentiality, and owes you only honesty and whatever a state licensing statute imposes on everyone. Treat what arrives from that broker as advocacy, and control what you hand back.

Who does the business broker on the listing actually work for?

A business broker who lists a company works for the seller under a written listing agreement, is paid from the seller’s proceeds, and takes instruction from the seller. The broker’s assignment is to produce a buyer on terms the seller will accept. A buyer who answers the listing is a prospect in that process, not a client of it.

Agency is a relationship, not a job title. A principal engages someone to act on its behalf and that person accepts. The seller signed. You did not. Loyalty and confidentiality run to the signer.

Federal law does not govern that listing agreement. It governs people who deal with SBA on your loan. SBA defines an “Agent” as an authorized representative, including an attorney, accountant, consultant, packager or lender service provider, representing an applicant in conducting business with SBA. Acting as both a referral agent or lender service provider and a packager on the same SBA business loan, paid by both the applicant and the lender, is good cause to suspend or revoke that person’s privilege of doing business with SBA, subject to a narrow exception requiring disclosure in both directions. The sanction is discretionary, and the rule reaches SBA filings rather than your purchase agreement.

Law: 13 C.F.R. 103.1(a); 13 C.F.R. 103.4 (introductory text and (g)). Stated as of September 2026; confirm the current text.

What is the difference between a broker, a finder, a transaction broker and a dual agent?

A broker acting as the seller’s agent negotiates for the seller. A finder introduces two parties and negotiates for neither. A transaction broker, in states that create the category by statute, facilitates without owing fiduciary loyalty to either side. A dual agent purports to represent both principals at once, which requires informed consent and is prohibited outright in some states.

The label does not control. What controls is whose instructions the person takes and who pays at closing. A self-described finder who argues the seller’s price is negotiating for the seller.

Law: 13 C.F.R. 103.1(a), (e), (f), for the SBA definitions only. The state-law roles above vary and are a working frame, not a statute.

Dual agency means one person claims to represent buyer and seller in the same negotiation, so nobody argues for your price. Florida bars a licensee from operating as a disclosed or nondisclosed dual agent, defines the term as a broker who represents both prospective buyer and prospective seller as a fiduciary, and presumes transaction brokerage unless single agency or no brokerage relationship is established in writing. Read the carve-out with the rule: Florida’s required brokerage-relationship disclosures do not reach dispositions of interests in business enterprises or business opportunities. Ask for the relationship in writing anyway. Where a state allows dual agency on consent, consent is the whole ballgame, and you do not sign that consent on a first call.

Law: Fla. Stat. 475.278(1)(a), (1)(b), (5)(b). Florida illustrates; your state may differ.

Is business brokerage even a licensed activity in my state?

Business brokerage is licensed in some states and not in others, because licensing is state law and statutes differ on whether selling a company is regulated. California’s real estate licensing part defines “business opportunity” to include the sale or lease of a business and its goodwill. Other states regulate only transactions touching real property.

That is a definition, not the licensing duty itself, so whether it captures the person on your listing turns on the operative licensing section and on how the state agency applies it. In a licensing state the broker answers to a disciplinary regime and a violation has a forum. In a non-licensing state the only constraints are the seller’s contract and general law on fraud. Ask for the license number on the first call, then verify it with the agency, not the broker’s website.

Law: Cal. Bus. & Prof. Code 10030 (definition of “business opportunity”).

What happens to what I tell the broker about my budget, my lender and my timeline?

Information given to the seller’s broker should be assumed to reach the seller, because a seller’s agent owes the seller a duty to communicate what is material. Your price ceiling, your pre-approval amount, your departure date and the fact that this is your only live deal all adjust what the seller believes you will pay.

One narrow exception is not protection. Some states recognizing transaction brokers impose a limited confidentiality duty barring disclosure that a buyer will pay more than the price offered. It exists only where a statute creates it, only in that role, never by default.

The mechanism is not bad faith. It is the job. An agent who learned your maximum and kept it from the seller would be failing the person who hired them. I ask who pays each person before I read a single number in the offering memorandum.

• Hold back until the process requires it: your maximum price, your liquid capital, your personal deadline, and any pressure from a spouse or a landlord.
• Give early, because credibility is cheap to prove: that you are working with a specific lender, that you can fund the required equity injection, and that you can move on a defined schedule.
• Route through the lender: detailed personal financial disclosure belongs in the lender’s file, not in an email to the seller’s agent.
• Put price in the letter of intent: a number with conditions attached is worth more to you than a number said on a call.

Your maximum price, said once, becomes the seller’s minimum.

Can I rely on the asking price, the recast earnings and the growth story?

The asking price, the recast earnings and the growth narrative in a confidential information memorandum are the seller’s work product, assembled with the seller’s agent and presented to sell. They are marketing documents, not audited statements, and nothing requires them to be conservative or complete. General fraud law still reaches affirmative lies.

The working test for an addback is simple. An addback is legitimate only if the expense will not recur for you as the owner. The seller’s boat qualifies. The seller’s salary qualifies only to the extent you are not paying someone to do that work, and if the seller ran operations you are doing that job or hiring for it. Debt service does not shrink when an addback fails, and on a variable-rate loan the payment can rise.

Your lender, not you, orders any business valuation SBA requires on a change of ownership, and the report is prepared for the lender’s credit file. Whether one is required, who may prepare it and at what threshold are procedural questions SBA revises. Stated as of September 2026, ask your lender which requirement applies and whether you receive a copy. That report is not your diligence, and the asking price is not a valuation.

How is the broker paid, and does the SBA require fees to be disclosed?

The listing broker’s fee is set by the listing agreement with the seller, usually contingent on a closing and usually a percentage of transaction value, so the person managing information between you and the seller is paid more when you pay more. SBA’s fee disclosure reaches loan-side agents, not that commission.

That is a structural conflict, not an accusation. Listing agreements also carry minimum fees, retainers, fees earned on production of a ready, willing and able buyer, and tail periods that survive expiration.

On the financing side, federal law puts fees on paper. The Small Business Act requires an applicant to identify persons engaged to expedite the application and the fees paid to them. SBA’s regulations require any applicant, agent or packager to execute and provide SBA a compensation agreement providing that where SBA deems the compensation unreasonable the agent reduces the charge and refunds the excess. The vehicle is SBA Form 159. Stated as of September 2026, it is signed by the SBA lender, the applicant and the agent whenever an agent is paid by either in connection with the loan, with a separate form for each agent. You are the applicant. You sign it, so you read it first, and you check the current edition on SBA’s site.

Law: 15 U.S.C. 642; 13 C.F.R. 103.5(a), (b); SBA Form 159, Fee Disclosure and Compensation Agreement, OMB Control No. 3245-0201.

The fee that gets disclosed to SBA is not the fee that moves your price.

SBA’s lending procedure is revised, and a lender applies the version in force when your loan number issues, not the version in force when you signed the letter of intent. SOP 50 10 8 took effect for loans receiving an SBA loan number on or after June 1, 2025, and SBA amends its procedures by notice between editions. Stated as of September 2026, confirm the governing version in writing with your lender rather than relying on any article, including this one.

Can I hire someone who owes duties to me, and who pays them?

Buyer-side representation exists and you pay for it. An attorney you engage, and an accountant you engage to test the numbers, owe their obligations to you, and their fees come out of your funds rather than the seller’s proceeds. Before anyone advises you, establish two facts: who signs the engagement letter, and who pays at closing.

Scope that honestly. A full quality-of-earnings engagement and a retained buy-side adviser are normal in sponsor-backed deals and uncommon on a first acquisition. The usual substitute is a scoped accountant’s review of returns, bank statements and payroll records.

Who pays matters most for the people the broker introduces. Under SBA’s definitions a referral agent who identifies and refers an applicant to a lender may be employed and compensated by either the applicant or the lender. Ask whether a referral fee is being paid on your file, and ask your lender for every fee disclosure form in it before closing. Referrals are not disqualifying. Undisclosed referrals are.

Law: 13 C.F.R. 103.1(f); 13 C.F.R. 103.4(g). Stated as of September 2026.

Does treating the broker as an adversary help me?

No. A competent broker keeps a fragile transaction moving, holds the seller to a schedule, produces documents that would otherwise take weeks, and controls your access to the seller, the financials and the site visit. Antagonizing that person is expensive and sometimes fatal to the deal, because the broker chooses which buyer gets the next call.

Information discipline is not hostility. Answer quickly, show capacity, meet every deadline, and be pleasant about it. Say once that price will be addressed in the letter of intent and that your financial disclosure goes to the lender. A buyer who treats a seller’s agent as an enemy gets screened out, and screening you out costs the broker nothing.

What should I do before the first call with the broker?

Before the first substantive call, a buyer should establish who represents whom, read the NDA as a contract rather than a formality, and decide privately what the deal is worth before hearing the seller’s number. Those three steps come before any number is discussed, and they set the terms of every conversation that follows.

• Ask in writing whom the broker represents on this transaction and how they are compensated. Keep the answer.
• Read the NDA before the teaser. Identify the counterparty, the term, any non-circumvention clause, any bar on contacting employees, customers or the landlord, and any duty to disclose your financing sources.
• Look up the broker’s license, if the state licenses the activity, with the state agency itself.
• Write down your walk-away price and your walk-away date, and keep both out of every call, email and text.
• Engage your own counsel and accountant before the letter of intent, which is usually non-binding on price and structure and binding on exclusivity, confidentiality and expenses.
• Ask your lender, in writing, which procedural version governs your loan, which valuation requirement applies, and for copies of every Form 159 in your file.

I read the NDA before I read the teaser, because the first document tells you what the second one costs you.