Selling a trucking company before the cash ran out

The situation

The number that kept Bogdan awake was not the sale price. It was payroll. His logistics company ran about forty trucks out of a Whitby yard, and the biweekly payroll run was roughly $180,000. He had enough in the account to make two more of those runs, maybe three if a couple of large customers paid on time. After that, he was not sure what happened, and he did not want to find out. He had built the company from four trucks over almost two decades, and a forced wind-down was worse to him than accepting a lower sale price than he wanted.

The company had been profitable two years earlier. Then diesel costs spiked, two large shipping customers renegotiated their rates downward within months of each other, and a factoring arrangement Bogdan had used to smooth cash flow started eating into margin in a way he had not fully appreciated when he signed it. He was current on his loans, but only barely, and his lender had started asking for weekly cash reports instead of monthly ones. That is usually the first sign a lender is preparing to act, and Bogdan read the shift correctly and started looking for a way out before the lender forced one on him.

A logistics consolidator had approached him about buying the business roughly four months earlier. Talks moved slowly at first, the way these things often do, with the buyer's side asking for financial statements and Bogdan's side gathering them piecemeal between dispatch calls and driver shortages. By the time Bogdan came to us, the buyer's principal, Baldev, had put forward a letter of intent at a price in the $50 to $80 million range for the business, subject to due diligence. The letter gave the buyer roughly six weeks to complete that diligence, which is a fairly ordinary timeline for a transaction of that size. Bogdan did not have six weeks of comfortable runway. He had, realistically, three to four, and every one of those weeks would need to be spent negotiating while still running the business day to day.

What Bogdan was afraid of was not a lower purchase price. He had already made peace with the idea that a distressed seller does not get the best number a healthy seller would. What he was afraid of was the process collapsing entirely: the buyer walking away midway through diligence, the news reaching his drivers and customers before he had a chance to control how it landed, and the company being worth less the following month than it was worth that day. Every week the deal stayed open was a week his leverage eroded and his cash position worsened at the same time, and those two problems fed each other in a way that could spiral quickly if either side lost patience.

Where it went wrong

We agreed with Bogdan that the standard approach to diligence, working through every category methodically over six weeks, was not available to him. Instead we built a compressed ten-day diligence window with the buyer's counsel, agreeing which categories mattered enough to slow the deal down and which could be resolved after closing through representations and warranties instead. Employment records, environmental questions on the yard, and ordinary corporate housekeeping went into the second bucket, since problems there could be priced or indemnified without derailing the timeline. Customer contracts and secured financing went into the first, because those were the categories that could change the purchase price or kill the deal outright if they surfaced late.

That prioritization turned out to matter. On day six, the buyer's team, led by Harpreet, an anesthesiologist who had put a significant share of her own savings into the acquiring group alongside Baldev's fund, flagged two problems that were connected in a way nobody on either side had initially seen. First, several of the company's largest customer contracts contained clauses requiring the customer's consent before the contract could be assigned to a new owner, and Bogdan had never sought that consent because the topic had never come up in earlier, slower negotiations conducted mostly by email. Second, the factoring facility Bogdan had used to manage cash flow held a security interest over the same receivables the buyer had assumed would transfer with the business, and that interest ranked ahead of almost everything else, including the buyer's expected claim on those same accounts.

Put together, the buyer was looking at a business where a meaningful slice of expected revenue might not legally transfer without customer consent that could not be obtained in the time available, and where the receivables backing that revenue were already pledged to someone else entirely. From the buyer's side, that was not a paperwork problem to be tidied up later. It changed what they thought they were buying, and it changed what the business would be worth to them in its first year under new ownership if even one large customer balked.

Baldev's team came back with a revised position roughly fifteen percent below the letter of intent price, with part of the reduced price held back in escrow against any customer contracts that did not successfully transfer by closing. For a day and a half, it looked like the whole process might unwind, because fifteen percent on a transaction of this size was not a small number, and Bogdan initially read it as an opportunistic move rather than a response to a real problem.

What we did

1. Triaged the diligence list within the first two days so the compressed timeline was spent on the categories that could actually change price or kill the deal, rather than spreading limited hours evenly across every standard checklist item as a full six-week process would. Getting this ordering wrong would have meant surfacing the receivables problem too late in the process to negotiate around it, at which point the buyer's only real option would have been to walk.
2. Pulled the factoring agreement and every customer contract with an assignment clause before the buyer's team formally asked for them, working through them at night alongside Bogdan's bookkeeper. So when the issue surfaced on day six, we already understood its exact shape and could respond with a position immediately, rather than scrambling to explain a document set we were reading for the first time under real time pressure.
3. Called the factoring lender directly rather than waiting for the lender to raise the sale on its own, to ask what it would realistically take to release or subordinate its interest in the specific receivables tied to the transferring contracts. A partial, targeted release was a plausible ask even on short notice, while an outright discharge of the full facility across every receivable was never realistic given the lender's own risk position.
4. Reached out to the largest affected customers on Bogdan's behalf to request consent to assignment, framing the request around continuity of service and account management rather than mentioning the sale of the company directly. Customers with no operational reason to object were considerably more likely to sign quickly when the request read as routine housekeeping rather than as a warning that something was changing.
5. Modelled the price impact of each realistic outcome for the receivables and consent issues before the buyer's revised offer actually arrived, running rough numbers on what full, partial, and failed resolution of each item would mean for the deal. So when Baldev's team proposed a specific reduction and escrow structure, we could tell Bogdan within hours whether it was reasonable relative to the real exposure, not just whether it felt painful in the moment.
6. Negotiated the escrow release conditions line by line so that Bogdan's holdback would be released item by item as each customer consent came in or each receivable cleared the factoring lien, rather than sitting frozen as a single block until every last item resolved. That structure meant Bogdan started recovering funds within weeks instead of waiting months for the slowest customer to respond.
7. Kept the revised timeline to two additional weeks, not the six originally contemplated, by agreeing with the buyer's counsel on a short, fixed schedule for each remaining closing condition with hard dates attached. Bogdan's cash position meant that a second open-ended extension was not something the business could survive regardless of how favourably the underlying numbers eventually settled. Hard dates also gave both sides a shared reason to resolve small remaining issues quickly rather than let them drift.

The outcome

The deal closed just under three weeks after the letter of intent's original diligence deadline, at a price roughly fifteen percent below what Bogdan had hoped for, with a portion of the purchase price held in escrow against the customer contracts still awaiting consent at closing. Two of the three affected contracts secured consent before the closing date, once the requests had been reframed around continuity rather than the sale itself. The third took another five weeks, well after closing, and Bogdan received that portion of the escrow once it finally came through.

Bogdan did not get the number he wanted, and he was direct with us about that both during the negotiation and afterward. He had gone into the process hoping the top of the range in the letter of intent was realistic, and it was not, once the receivables and consent issues were priced in. What he did get was closure on a timeline his cash position could actually survive. He made his last two payroll runs from the company's own account rather than from a bridge loan he had been quietly exploring with a second lender at a much higher rate, a loan that would have added debt he could not have serviced if the sale had stalled even a few weeks further.

The gap between the price he wanted and the price he accepted was real money, not a rounding difference, but it was a known, bounded gap tied to specific identified issues rather than an open-ended discount driven by fear. Baldev's group closed the acquisition and kept the yard operating under its existing name through the transition period, which mattered to Bogdan because several of his longer-serving drivers stayed on rather than scattering to other carriers. Harpreet later told us the receivables issue was the closest the deal came to falling apart on her side, and that the speed and specificity of the response, rather than the size of any single concession, was what kept her and Baldev willing to stay at the table through a difficult week.

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