Lessons from the field
Closing Deals During Lockdown: Bargain Buyers, Lowball Offers and What Sellers Should Do
A month into the pandemic, deals were closing again, but at prices nobody expected. Sellers were calling back buyers whose lowball offers they'd rejected months earlier, and bargain hunters with cash were touring businesses. Here's what happened in April 2020, how to tell a bargain hunter from a serious buyer, and how a seller should decide whether to accept, counter or walk away from a lowball offer.
Quick answer
A lowball offer is an offer well below a business's asking price or likely value. Sellers shouldn't accept or reject one on reflex: compare it on price, terms and certainty, not price alone. A lower all-cash offer that will close may be worth more than a higher offer that depends on financing or a long earnout, and a low offer can often be improved with seller financing, an earnout, a different transition period or a lease takeover. Before deciding, check the buyer's proof of funds, ask what the offer is based on, and compare it with the business's earnings and your other options. Counter with terms rather than just a number, keep backup buyers in play, and walk away when the offer is far below what the business can earn. A free, printable offer comparison worksheet is available to download from this article.
April 2020: cautiously hopeful
A month earlier, business broker Abe Jenners wasn't expecting to close anything soon. Buyers were backing out and businesses were shutting their doors. “It has been very tough,” he said in March. (See how brokers kept deals alive in March 2020.)
By April, calling from his home office in his basement, Abe was cautiously hopeful, though too guarded to call it optimism.
“It's not as horrible as it was last month.”
The lowballers come back
Sellers who had turned down low offers were suddenly calling their brokers with a new message:
“Go back to that guy or gal who offered me X and tell them I'll take it.”
“The lowballers of late 2019 and early 2020 are being accepted now.”
Not every buyer came back. Some came back with even bigger cuts. But deals were closing.
Bargain hunters with cash
Then a new kind of buyer appeared: people with cash, asking to tour businesses.
“I was really shocked by what you might call the bargain hunters.”
Their offers were low, but some came with a promise a struggling seller wanted to hear: “I'll take over your lease in 30 days. At least you'll get something.”
“They remind me of the guys who bought homes in 2008”
“You can't imagine the stories. A month ago, it was like an earthquake hit a lot of my clients. Deals dying or put on hold. And then, suddenly, those bargain hunters, as you called them; they started coming up out of the wood works. They remind me of the guys who bought homes during the Great Recession in 2008.”
A longtime client in New Jersey had two deals that had been “dying on the vine” come back to life. The first was a dry cleaner.
“There's a very motivated buyer on one deal for a dry cleaner.”
The price came down about 10%, and the seller agreed to stay on for two more weeks to train the buyer while the business kept operating. In the second deal, a couple was buying two restaurants for very little, a deal my client described as a “bottom dweller.” The seller would stop paying rent on businesses that couldn't open, and the buyers planned to reopen once restrictions lifted.
75% off, and a welcome-back party
Back with Abe, a medium-sized restaurant in Georgia was selling for more than 75% below its price. The seller was “calling every day to make sure it's on.”
“And the buyer is confident he can use the money he saved to have an ‘end of the plague’ welcome back event. I hope he's right.”
What is a lowball offer?
A lowball offer is an offer well below a business's asking price or what its earnings support, usually made to test how motivated the seller is. It isn't always an insult or a waste of time. In April 2020, many lowball offers from late 2019 turned out to be the best offers those sellers would get. The question is whether this offer, from this buyer, at this moment, is better than the seller's realistic alternatives.
Should you accept a lowball offer? 7 questions to ask first
- What is the offer based on? Ask the buyer to explain their number. A buyer with a reason can be negotiated with; one fishing for a desperate seller usually can't.
- Can the buyer close? Ask for proof of funds or a lender's pre-approval before taking any offer seriously.
- What do the business's earnings support? Compare the offer with the cash flow the business has actually produced, and what it's likely to produce once the current problem passes.
- What are the terms? Cash at closing, seller financing, earnouts, the transition period and contingencies can matter as much as the headline price.
- How certain is it? A lower offer that will close may be worth more than a higher one that depends on financing, landlord approval or a long earnout.
- What are the alternatives? Other buyers, waiting, restructuring the business, or closing it. Put a real number on each.
- What does it cost to wait? Rent, payroll, debt payments and a declining business all have a cost. So does selling too cheaply.
Abe's bar owner in March and his restaurant seller in April both chose a big discount, with their eyes open. That's the goal: a decision made with the full picture, not a reaction to a frightening week.
Price vs. terms vs. certainty: comparing offers
| Offer | Cash at closing | Certainty | When it can make sense |
|---|---|---|---|
| Full price, bank financed | High | Lower: depends on the loan | The buyer is pre-approved and the business qualifies |
| Lower price, all cash | Medium to high | High | The seller needs a fast, certain exit |
| Lower cash, plus seller financing | Lower | Medium | The seller can carry a secured note and wants a higher total price |
| Base price plus earnout | Lower | Lower | Earnings are temporarily down and likely to recover |
| Lease takeover only | Little or none | Varies | The business can't continue and the lease is the seller's biggest liability |
Seller financing can also help a buyer qualify for a bank loan. Under SBA 7(a) rules, part of a buyer's equity injection can come from a seller note on full standby, meaning no payments for a set period, so a seller's willingness to carry a note can turn a weak offer into one that closes.
How to respond to a lowball offer
- Don't take it personally, and don't ignore it. Reply promptly and professionally. Silence ends negotiations that could have worked.
- Ask for the basis and the proof. What is the number based on, and can the buyer show proof of funds?
- Counter with terms, not just a number. Offer a path to a better total, such as a higher price with seller financing, or a lower price with a shorter transition period.
- Set your floor in advance. Know the lowest total, and the worst terms, you'll accept before the negotiation starts.
- Keep backup buyers in play. One low offer is a data point. Two or three tell you what the market will pay.
- Put everything in writing. Price, terms, dates and contingencies, in a letter of intent.
Scripts for countering a lowball offer
Asking for the basis: “Thanks for the offer. Before the seller responds, can you walk me through how you arrived at that number, and send proof of funds? It will help us find a deal that works.”
Countering with terms: “The seller can't accept that price in cash, but there may be a way to bridge the gap. Would you consider [price] with [amount] in seller financing over [term]?”
Holding the line: “We appreciate the interest. The offer is well below what the business has earned, and the seller is going to pass for now. If anything changes on your side, call me.”
Free download: Offer Comparison Worksheet (printable PDF)
Compare up to three offers side by side on one page: price, cash at closing, seller financing, earnout, contingencies, closing date, transition period and the buyer's proof of funds, plus the questions to ask before accepting and scripts for countering. Download the free offer comparison worksheet (PDF).
Bargain hunter or serious buyer? How to tell
- Serious buyers sign the NDA, provide proof of funds, ask about the business's operations and explain their offer.
- Bargain hunters may be serious too, but they're buying a discount, not a business. Expect low offers, fast timelines and little interest in the seller's future.
- Tire kickers won't sign, won't show funds and disappear when asked to commit. (How to spot tire kickers.)
A bargain hunter with real cash and a fast closing can be exactly the right buyer for a seller who needs out. The broker's job is to know which one is on the phone.
Lease-takeover offers: what the seller really gets
“I'll take over your lease” can sound like a rescue. Before accepting, check:
- Landlord consent. Most leases need the landlord's approval to assign. Talk to the landlord early.
- Personal guarantees. Will the seller be released from any personal guarantee on the lease, or remain liable if the buyer defaults?
- Equipment, inventory and the name. What exactly is the buyer getting for nothing? (Inventory in a business sale.)
- Other liabilities. Debts, taxes and contracts that stay with the seller after the keys change hands. (Bad deals and how to verify a seller.)
If you're the buyer: buying a business in a downturn
- Separate the temporary from the permanent. Is revenue down because of the downturn, or because the business was already declining?
- Check the landlord and the lease before you count on a lease takeover.
- Plan your financing early. Lenders may be more cautious in a downturn; seller financing can help.
- Ask for a transition period. Like the New Jersey dry cleaner, a seller who stays on to train you protects the value you're buying.
- Don't confuse cheap with good. A business bought at 75% off still needs customers, staff and cash to reopen.
How a CRM helps you manage offers
- Every offer recorded on the deal, with its price, terms and dates, so you can compare them side by side. (Pipeline tools.)
- Proof of funds and NDAs on the buyer's record, so you know who can actually close.
- Backup buyers on file, so a low offer is never the only offer.
- Follow-up reminders for every buyer who said “not now,” because some of them will come back, as they did in April 2020. (15 automations that save brokers time.)
- Drip campaigns that keep past buyers warm until the timing is right. (Email marketing.)
What happened next
- The market recovered. BizBuySell reported 7,612 closed small business transactions in 2020 and 8,647 in 2021, a 14% rebound.
- Restaurants still sell below asking. Even in Q2 2026, BizBuySell's restaurant analysis found restaurants sold at 90.3% of asking price on average, which is why every offer is a negotiation.
- Renegotiation still kills deals. In Axial's Dead Deal Report on deals that died after a letter of intent in 2025, renegotiation challenges caused 14.7%. A buyer who lowballs and then re-trades is a risk to watch for.
Track every offer with Vertica CRM
See how Vertica CRM records every offer, buyer and backup buyer on the deal, so you always know where you stand. Contact us for a short demonstration.
Schedule a Demo Questions? Call +1 212 381 4994 (USA) or +61 3 8518 4759 (Australia).Frequently asked questions
What is a lowball offer for a business?
An offer well below the business's asking price or what its earnings support, often made to test how motivated the seller is.
Should I accept a lowball offer for my business?
Not on reflex. Compare it on price, terms and certainty, check the buyer's proof of funds, compare it with the business's earnings and your alternatives, and consider the cost of waiting. Sometimes a low but certain offer is the right one.
How do you respond to a lowball offer on a business?
Reply promptly, ask what the offer is based on and for proof of funds, then counter with terms, such as a higher price with seller financing, rather than just a number. Know your floor and keep backup buyers in play.
Is a lower all-cash offer better than a higher financed offer?
Sometimes. A lower all-cash offer may be more certain and faster, while a higher financed offer depends on the buyer's loan approval. Compare the total value and the likelihood that each will close.
How can seller financing help with a low offer?
It can raise the total price by spreading part of it over time, and under SBA 7(a) rules a seller note on full standby can count toward part of the buyer's equity injection, helping the buyer qualify for a loan.
What is a bargain hunter in business sales?
A buyer, often with cash, looking for businesses that can be bought at a steep discount, such as during a downturn. They can be serious buyers, but they're buying a discount rather than a business.
What is a lease takeover offer?
An offer where the buyer takes over the seller's lease, often paying little or nothing else. Sellers should check landlord consent, whether personal guarantees are released, and what other liabilities stay with them.
Why do sellers accept lowball offers in a crisis?
Because waiting costs money: rent, payroll and debt continue while revenue falls. In April 2020, many sellers accepted offers they had rejected months earlier, some at more than 75% off.
How can a buyer tell if a business is a bargain or a bad deal?
Separate temporary problems from permanent decline, check the lease and the landlord, plan financing early, ask for a transition period, and remember a cheap business still needs customers, staff and cash to run.
Do businesses sell for less than the asking price?
Usually. BizBuySell found restaurants sold at 90.3% of asking price on average in Q2 2026, so some negotiation is normal.
When should a seller walk away from a lowball offer?
When the offer is far below what the business can earn, the buyer can't show proof of funds, the terms shift most of the risk to the seller, or better alternatives exist.
Is there a worksheet for comparing offers on a business?
Yes. Vertica CRM offers a free one-page Offer Comparison Worksheet (PDF) for comparing up to three offers on price, cash at closing, terms, certainty and buyer strength, with questions and counter scripts.