How to Prepare for Due Diligence

Ensuring Your Business Stands Strong

Dear MSB owner, being unprepared for scrutiny may harm your business valuation and raise questions about the management. Although due diligence is a tedious process, if you know what to expect you can use it to your advantage.

Allow me to elaborate:

What is Due Diligence?

Due diligence is a comprehensive investigation conducted by a prospective buyer to assess the value and risks associated with a business before finalizing a purchase. This process typically begins after a formal offer has been accepted but before the contract is signed. The main goal is to verify that the business is worth the proposed purchase price and to uncover any potential issues that could affect the transaction.

The Importance of Due Diligence

When it comes to selling your payment institution or money service business in the UK, thorough due diligence is not just a formality — it’s a critical step that can make or break the deal. By following these guidelines, you can position your business for a smooth and successful sale, ensuring that both your interests and those of the buyer are well-protected.

Why is Due Diligence Important?

1. Accurate Valuation: Due diligence helps the buyer determine whether the business is worth the asking price by thoroughly examining its financial health, assets, liabilities, and overall performance. This ensures that the buyer is making an informed investment decision.

2. Risk Mitigation: By identifying potential legal, financial, and operational risks, due diligence allows the buyer to negotiate terms that protect their interests. This might include requesting warranties or indemnities to cover any future liabilities that may arise.

3. Smooth Transaction: Early and thorough preparation for due diligence can expedite the sales process, saving both time and legal fees. It also helps build trust between the buyer and seller, making it more likely that the transaction will proceed smoothly.

Key Areas of Due Diligence

1. Legal Due Diligence

Legal due diligence involves a detailed review of the company’s legal affairs, including:

  • Corporate Structure and Records: Ensure that your statutory registers, board meeting minutes, and shareholder resolutions are up to date.
  • Contracts: Review all trading, supplier, and employee contracts to ensure they are current and legally binding.
  • Compliance: Verify that your business complies with all relevant regulations and has no pending litigation or regulatory issues.

2. Financial Due Diligence

Financial due diligence focuses on the company’s financial health, including:

  • Accounts: Provide up-to-date financial statements, including profit and loss statements, balance sheets, and cash flow statements.
  • Tax Records: Ensure that all tax filings are current and accurate, and be prepared to answer any questions about your tax position.
  • Assets and Liabilities: Offer a detailed list of assets and liabilities, including any outstanding debts or obligations.

Preparing for Due Diligence

1. Organize Your Documents

Create a virtual data room to store and share all necessary documents. This should include subfolders for different categories such as corporate records, financial statements, contracts, and compliance documents. Keeping everything well-organized will make it easier for the buyer to review the information and speed up the due diligence process.

2. Conduct a Self-Audit

Before the buyer begins their due diligence, conduct your own internal audit. This will help you identify and address any potential issues before they become a problem. Consider hiring a professional adviser to assist with this process, as they can provide valuable insights and help you prepare more effectively.

3. Be Transparent

Honesty is crucial during the due diligence process. Disclose any potential issues upfront rather than trying to hide them. This will build trust with the buyer and reduce the likelihood of problems arising later in the process.

4. Prepare for Questions

Anticipate the types of questions the buyer might ask and be ready to provide detailed answers. This includes being prepared to discuss your business’s financial performance, legal compliance, and any potential risks or liabilities.

Tips for a Smooth Due Diligence Process

  1. Start Early: Begin preparing for due diligence well in advance of putting your business up for sale. This will give you ample time to organize your documents and address any potential issues.
  2. Maintain Clear Communication: Keep an open line of communication with the buyer and their advisers. Respond to requests for information promptly and thoroughly to keep the process moving smoothly.
  3. Use Professional Advisers: Engage experienced legal and financial advisers to guide you through the due diligence process. Their expertise can help you navigate complex issues and ensure that you are well-prepared for buyer scrutiny.


Thorough due diligence is a vital component of the sales process for any payment institution or money service business in the UK. By understanding its importance and preparing effectively, you can facilitate a smooth and successful transaction that protects your interests and those of the buyer. Remember, early preparation, transparency, and professional guidance are key to navigating this critical step with confidence.

If you need help dealing with compliance and exit planning, we will support you through every stage of the process, give us a call with no commitment and we’ll be happy to discuss your case confidentially.

We support fintech companies in many diferente ways.
Let’s have a quick chat.

About the Author

Rodolfo Basilio has over 12 years of fintech expertise in the UK, and leads Vertice Fintech at the forefront of the fintech consultancy sector.

Entrepreneur and investor, Rodolfo is a senior accountant, business consultant and founder of Vertice Services. He also founded Angra in 2015 and exited in 2022, and co-founded Remitec in 2018 and exited in 2022.


From the very first steps all the way through day-to-day management and growth, we will make your journey in the fintech industry smooth, jargon-free and straight forward. Get in touch with us 020 7328 8338 or email Rodolfo Basilio directly at: [email protected]


Vertice Fintech is your one-stop shop for maximizing your MSB’s value with a comprehensive suíte of services, including:

  • Expert guidance on operational efficiency
  • Tailored tech stack recommendations
  • Proven customer retention strategies
  • Deal-sourcing solutions to connect with the right buyers

Leave your details with us and we’ll help you with a free business valuation.

FREE Business Valuation

Considering a sale in the now or in the future? Our Exit Strategy Review could be the pivotal step towards maximizing your outcome.

  • Comprehensive understanding of your business and objectives.
  • Free indicative valuation.
  • Customized sales process design to maximize value.
  • Preparation of confidential information memoranda.
  • Targeted identification and engagement of potential acquirers.
  • Management of offers, site visits, and due diligence.
  • Negotiation and legal process oversight through to completion.