- Buyers frequently treat due diligence as a formality — a quick look at the books before signing.
- A landlord's consent to assign the lease, a lender's payout and discharge of existing security, and any franchise or industry-specific regulatory approval all depend on someone outside…
- Where a buyer needs financing, the lender's own underwriting and conditions become part of the deal's critical path.
Almost every buyer goes into a purchase expecting a fairly linear process — make an offer, review the numbers, sign, close. Then diligence uncovers something, a landlord goes quiet for weeks, or a lender wants one more document, and the deal that was supposed to be simple starts to feel like it's stuck.
This is a recognizable pattern, not a sign that your deal is unusual. Below are the causes that come up again and again in Ontario business purchases, and what you can do to keep your own deal moving.
Underestimating Due Diligence
Buyers frequently treat due diligence as a formality — a quick look at the books before signing. In practice, it covers corporate records, financial statements, material contracts, leases, employee records, intellectual property, licences, litigation history, environmental matters, insurance, and tax compliance. Working through all of that thoroughly, especially where a seller's records aren't already organized for a sale, is genuinely time-consuming — and rushing it is exactly how liabilities get missed.
Third-Party Consents You Don't Control
A landlord's consent to assign the lease, a lender's payout and discharge of existing security, and any franchise or industry-specific regulatory approval all depend on someone outside the deal. Under the Commercial Tenancies Act, where a lease restricts assignment without consent, that consent is generally deemed not to be unreasonably withheld — unless the lease itself says otherwise — but that doesn't compel a landlord to respond quickly. Neither buyer nor seller can force these third parties onto the deal's own schedule.
Financing Conditions That Aren't Cleared Early
Where a buyer needs financing, the lender's own underwriting and conditions become part of the deal's critical path. Buyers who leave financing until after the purchase agreement is drafted often find it's the last condition standing between signing and closing, adding a layer of negotiation and paperwork the rest of the deal has already moved past.
Seller Records That Aren't Deal-Ready
An outdated minute book, financial statements that need to be reconstructed, or contracts that were never centrally filed all slow down the exact diligence process a buyer's lawyer and accountant need to complete. This is one of the more avoidable causes of delay — a seller who prepares records in advance of listing the business generally moves through this stage far faster than one who doesn't.
Renegotiating After a Diligence Finding
A single significant finding in diligence — an undisclosed lien, a lease with a restrictive assignment clause, a gap in tax compliance — can send both sides back to negotiating price, an indemnity, or a holdback, even after an LOI was signed on the assumption everything was clean. This isn't a failure of the process; it's the process working as intended, but it does add time.
How to Protect Your Own Timeline
- [ ] Ask the seller for organized due diligence materials as early as possible, ideally before the LOI is finalized.
- [ ] Arrange financing in parallel with due diligence, not after the purchase agreement is drafted.
- [ ] Identify any lease, licence, or franchise consents you'll need, and reach out to those third parties early.
- [ ] Build realistic buffer into your own personal or business planning rather than anchoring to a single target closing date.
- [ ] Loop in your lawyer and accountant at the LOI stage, not after diligence has already started.
Frequently asked questions
Is it normal for a business purchase to take longer than I originally expected?
Yes — this is one of the most common experiences buyers report, largely because due diligence and third-party consents are harder to predict than the initial offer stage suggests. It doesn't necessarily mean something has gone wrong with your deal.
Can the seller cause delays too, not just the buyer?
Absolutely. Disorganized records, a slow response to diligence requests, or reluctance to agree to a buyer's proposed protections after a finding can all slow a deal down just as much as anything on the buyer's side.
What's the single most common reason deals stall?
There isn't one universal answer, but third-party responsiveness — landlords, lenders, and licensing bodies in particular — comes up repeatedly, simply because neither buyer nor seller can control how quickly someone outside the deal responds.
Should I set a firm closing date in the LOI to keep things on track?
A target date is useful for planning, but treat it as an expectation rather than a guarantee unless your lawyer specifically drafts it as a binding deadline. An artificially firm date can also pressure you into skipping steps you shouldn't skip.
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