Proof of Funds (POF)
Proof of funds is documentation that shows you actually have the money to close. Brokers often ask for it before they'll send a CIM or set up a seller call. It's their filter for tire-kickers: it proves you can fund the deal, so they're not wasting a seller's time on someone who can't.
Why it matters to a buyer
Deal flow runs on credibility. A broker juggling a dozen interested parties prioritizes the ones who can clearly close. Showing proof of funds early moves you to the front of the line and signals you're a serious buyer, not someone browsing. On competitive deals, the buyer who's obviously ready often wins over a slightly higher offer that looks shaky.
What actually counts
The common misread: brokers want to see the full purchase price in your bank account. They don't. For an SBA deal, you're financing most of the price. What you need to show is the cash you'll actually bring:
- Your down payment (often 10% to 15% of the price)
- Closing costs and a working capital cushion
- A pre-qualification or term sheet from an SBA lender covering the financed portion (see the SBA lender directory)
How to prepare it
Have it ready before you ask for a single CIM. A clean package is a recent bank or brokerage statement (you can redact account numbers) plus a lender pre-qualification letter. On a $1.5M deal financed with 10% down, your POF needs to show roughly $150K to $200K in liquid funds plus the lender letter, not $1.5M. Getting this together early means you never lose momentum waiting on paperwork when a good deal appears.