TRANSACTIONS GLOSSARY
Due Diligence
Due Diligence
Investigation and verification performed before a financing or acquisition closes.
What does Due Diligence mean?
Investigation and verification performed before a financing or acquisition closes. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Due Diligence in context
A lender reviews financials, ownership, collateral and legal documents before funding.
Why it matters in financing
Due Diligence can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related transactions terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.