10 Business Brokerage Terms You Should Know Before Buying or Selling a Business in Wilmington, NC
Buying or selling a business in Wilmington, North Carolina is a major financial decision—whether you’re a local entrepreneur preparing for an exit or a buyer looking to acquire an established company in the Cape Fear region. Understanding common business brokerage terms can help you make informed decisions, reduce risk, and move through the transaction process with confidence.
Below are 10 essential business brokerage terms every Wilmington-area buyer and seller should understand before entering a deal.
1. Business Broker
A business broker acts as an intermediary between buyers and sellers during the sale of a business. In Wilmington, NC, brokers help business owners confidentially market their companies while guiding buyers through available acquisition opportunities.
A local broker brings insight into regional market conditions, buyer demand, and valuation trends specific to southeastern North Carolina.
2. Business Valuation
Business valuation determines what a company is worth based on financial performance, industry trends, market demand, and risk factors. In the Wilmington market, valuation may also reflect tourism-driven revenue, seasonal fluctuations, and local economic drivers.
An accurate valuation is essential for attracting qualified buyers and avoiding extended time on the market.
3. EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It’s a common metric used to evaluate a business’s profitability and overall financial health.
Many mid-sized businesses across North Carolina are priced using EBITDA multiples, making this a key number for serious buyers and sellers.
4. Seller’s Discretionary Earnings (SDE)
Seller’s Discretionary Earnings (SDE) represent the total financial benefit an owner receives from the business. This includes net profit plus owner salary, benefits, and discretionary expenses.
SDE is commonly used when valuing owner-operated businesses throughout Wilmington and surrounding coastal communities.
5. Letter of Intent (LOI)
A Letter of Intent (LOI) outlines the preliminary terms of a business sale, including price, deal structure, timelines, and contingencies. While typically non-binding, the LOI sets expectations for both parties and formally begins the due diligence phase.
6. Due Diligence
Due diligence is the buyer’s comprehensive review of financial records, operations, contracts, and legal compliance. This step verifies that the business aligns with representations made during negotiations.
Local brokers often help organize documentation and manage timelines to keep Wilmington-area transactions on track.
7. Asset Sale vs. Stock Sale
Business sales are typically structured as either:
- Asset Sales: Selected assets and liabilities are transferred
- Stock (Equity) Sales: Ownership shares are sold
Each structure carries different tax, legal, and liability implications under North Carolina law, making professional guidance essential.
8. Confidentiality Agreement (NDA)
A Non-Disclosure Agreement (NDA) protects sensitive business information shared during the sales process. Confidentiality is especially important in tight-knit local markets like Wilmington, where rumors can impact employees, customers, and vendor relationships.
9. Deal Structure
Deal structure refers to how the transaction is financed and paid out. Common components include:
- Cash at closing
- Seller financing
- Earn-outs
- Deferred payments
A thoughtful deal structure helps balance risk and flexibility for both buyers and sellers.
10. Closing
Closing is the final stage of the transaction, when contracts are signed, funds are transferred, and ownership officially changes hands. Successful closings require coordination between brokers, attorneys, lenders, and accountants familiar with North Carolina regulations.
Why These Business Brokerage Terms Matter
Understanding these core business brokerage terms helps Wilmington-area buyers and sellers:
- Evaluate opportunities accurately
- Reduce unexpected risks
- Negotiate with confidence
- Move efficiently through the sales process
Working with a knowledgeable Wilmington, NC business broker provides local insight, professional guidance, and a smoother transaction from listing to closing.
Ready to Buy or Sell a Business in Wilmington, NC?
Whether you’re preparing to sell your business or actively searching for the right acquisition opportunity, having the right guidance makes all the difference. Working with an experienced local business broker helps ensure accurate valuation, strong negotiation, and a smooth, confidential transaction from start to finish.
If you’re considering buying or selling a business in Wilmington or the surrounding Cape Fear region, connect with a trusted professional who understands the local market and will advocate for your best interests every step of the way. Contact Momentum Projects today to start the conversation and take the next confident step toward your business goals.