Deals fall apart in SMB acquisitions all the time, often for reasons the buyer can’t control. Here’s how we make sure a buyer who walks away from the wrong business isn’t starting from zero on the next one.
If you’ve been searching for a while, you already know this: deals die. A lot of them.
Sometimes the seller gets cold feet. Sometimes the lender changes the terms. Sometimes diligence turns up something that changes the picture enough that the right move is to walk away.
That last scenario is the one we think about most. By the time a buyer is in diligence, they’ve usually spent months finding the business, negotiating the LOI, lining up financing, and paying for legal work. Walking away at that point is often a disciplined decision, but it’s also an expensive one.
That’s why every engagement with Rapid Diligence includes a Broken Deal Credit. Here’s what it is, how it works, and why we built it the way we did.
What the Broken Deal Credit is
The Broken Deal Credit covers situations where a buyer starts a Quality of Earnings engagement with us and the acquisition falls apart before diligence is complete.
At a minimum, the buyer receives a credit toward a future engagement based on when the deal was canceled:
| Deal canceled within | Minimum credit |
| First week | 75% |
| First two weeks | 50% |
| First three weeks | 25% |
The credit is generally valid for 12 months. We can extend it, and often do, if the buyer is still actively searching.
It’s worth mentioning one important point: those percentages aren’t a defined limit. We often take a more generous approach depending on the situation, how much work has actually been completed, and the buyer’s history with us.
Why we have it
Deals die all the time in ETA and SMB acquisitions, and often for reasons that have nothing to do with the buyer’s judgment. We’ve seen deals fall apart over lender issues, seller hesitation, and findings nobody could have known about before the books were opened.
When a buyer spends thousands of dollars on diligence and uncovers something that makes them walk away, the diligence did exactly what it was supposed to do. We don’t think that should mean starting completely from zero financially when they find the next business and need to start diligence again.
Why a credit and not a refund
We structure this as a credit toward a future deal rather than a refund for a specific reason: it helps preserve the independence of the diligence.
We never want our compensation to depend on whether the current transaction closes. Our job is to tell you what’s actually in the books, whether that helps the deal get done or not. The credit follows the buyer and their search, not the outcome of any single deal.
How it works
The Broken Deal Credit is included in every Service Agreement by default. Buyers don’t need to ask for it, and they don’t need to negotiate for it.
If the deal dies during diligence, we determine the credit based on when the engagement ended. The percentages above are the minimum a buyer can expect under the agreement.
In practice, we’re often more flexible than that where it makes sense. If a deal dies early and relatively little work has been done, or if a buyer has been with us across multiple searches, we’ll take that into account.
What it means for buyers
The biggest benefit is simple: it reduces the financial downside of doing proper diligence.
Without something like this, every failed deal can feel like another full QoE fee waiting on the next one. That creates a quiet but real pressure. When you’ve already spent money on legal, lender fees, and diligence, and you’ve put months of your life into a deal, it’s tempting to talk yourself past a finding that should give you pause.
We’ve seen that pressure firsthand. The credit is meant to take some of it off the table, so walking away from a bad deal is easier when the findings justify it.
Put another way, the policy is designed to reward disciplined buyers, not penalize them for finding a problem.
Is this unique to Rapid Diligence?
We won’t claim that no other QoE provider offers any kind of broken-deal accommodation. Some do.
From what we’ve seen, though, it’s often something the buyer has to negotiate upfront, and the terms are usually less generous.
The difference with us is in how it’s set up:
- It’s automatic. It’s built into every agreement, not something you have to know to ask for.
- The minimum is clear upfront. You know exactly what you can expect before the engagement starts.
- We often go beyond it. When the circumstances warrant it, the floor is just a starting point.
Real Examples of the Broken Deal Credit in Action
We worked with one buyer who went through multiple failed acquisitions with us before they eventually closed.
Across four engagements, they received broken-deal credits. Several of those deals died relatively early, and on some of the later ones we took a more generous approach than the minimum. By the time they closed on their fourth deal, they had paid roughly 1.75x the cost of a single QoE across the entire process, rather than paying the full fee four separate times.
The relationship didn’t end there. They later acquired two additional businesses and used us for the QoE on both.
Not every situation will play out that way, but it’s a good illustration of what the policy is meant to do: a serious buyer shouldn’t feel financially punished every time they make the right call and walk away from a bad deal.
The bottom line
Buying a small business is hard. Most serious buyers will lose at least one deal along the way, and some of the best decisions they make will be the deals they choose not to close.
We built the Broken Deal Credit so that making that call doesn’t come with the added weight of starting over financially. Good diligence should give you the confidence to walk away when you need to, not make you feel trapped because you’ve already paid for it.
If you’re under LOI or heading into diligence, we’d love to connect. You can learn more about how we work via a free consultation call with our team.
