Does undocumented cash income actually help or hurt what a buyer is willing to pay?

In almost every practical sense, it hurts. Even if undocumented cash income is real, a buyer can only pay for earnings they can verify and rely on, and income that never appeared in your books, your tax filings, or your bank records can't be credibly presented as part of the business's earning power during a sale. Buyers and their advisors value the business on what its financial records actually show, not on a seller's word about additional income that was never reported.

The deeper problem is that raising it at all can damage trust in everything else you've told a buyer, since it suggests your reported numbers may not reflect the full financial picture in other ways too, and it can raise tax compliance questions that go well beyond the sale itself.

If your business's true performance is meaningfully understated in its books, the only way to actually capture that value in a sale is to have properly reported that income before you sell, which is a conversation for your accountant, not something to try to represent informally to a buyer. A business lawyer can also help you understand the risk of disclosing this kind of history during a transaction.