How much does due diligence cost when buying or selling a company: real ranges by type (financial, legal, tax), what the price depends on and who pays.
Before buying a company, the buyer commissions a due diligence: the audit that inspects from the inside what, until then, they only knew on paper. And the first question almost everyone asks us is the same one: how much does due diligence cost? The honest answer is that it depends —on how many areas are reviewed, the size of your company and how well-organised your documentation is— but it can be pinned down far better than the typical "between €1,500 and €100,000" that gets thrown around and helps no one.
In the sale of a mid-sized Spanish SME —the profile we work with at Fundenza, companies from €3M in revenue upward— the cost of due diligence moves within fairly predictable bands. Let's look at them.
How much does due diligence cost? Real ranges
For an SME deal, the financial due diligence block —the most common and almost always essential— usually falls between €15,000 and €40,000. Add the other areas (legal, tax, labour) and a reasonably complete review ends up costing between €30,000 and €90,000. Amounts above €100,000 exist, but that is the territory of large or highly complex deals, not the average SME.
The wide range you'll see on many sites (€1,500 to €100,000) is real, but it mixes apples and oranges: a quick review of a micro-business has nothing to do with buying a group with subsidiaries in three countries. The more your company resembles a professionalised SME, the more predictable the cost.
How much each type of due diligence costs
Due diligence is not a single job but several, contracted separately depending on what worries the buyer. These are the indicative ranges for an SME:
| Type | What it reviews | Indicative cost |
|---|---|---|
| Financial | Accounts, real EBITDA, debt, working capital | €15,000–40,000 |
| Legal | Contracts, litigation, ownership, corporate structure | €8,000–30,000 |
| Tax | Tax risks and contingencies with the authorities | €5,000–15,000 |
| Labour | Workforce, contracts, agreements, hidden liabilities | €3,000–10,000 |
| Commercial / market | Customers, competition, market position | €10,000–30,000 |
Not every deal needs all five. In many SME sales, buyer and adviser concentrate the spend on financial and legal, adding tax when there are doubts with the authorities. The commercial review is usually reserved for when the buyer is a fund or the business depends heavily on a few customers.
What the price depends on
The cost of due diligence is, at heart, hours of expensive professionals. Anything that increases those hours raises the bill:
- Scope. Each area you add is one more team working.
- Size and complexity. A company with one business line is not the same as a group with subsidiaries, holdings and real estate.
- The quality of your documentation. The most underestimated factor. If the adviser has to chase down every contract and rebuild the accounts, the hours —and the cost— soar. A company with a tidy data room pays considerably less.
- The timeline. Due diligence against the clock, with the team working weekends, carries a surcharge.
- The sector. Regulated sectors (healthcare, financial, energy) require specialised reviews that push the price up.
And even before you start, something shapes the whole scope: your company's valuation and your sector's multiples. The higher the price at stake, the deeper the buyer will want to look —and the more the review costs.
Who pays for due diligence?
By default, the buyer pays for due diligence. It makes sense: they are the ones who need to confirm that what they are buying is worth what they are putting on the table, and who hire the advisers who carry it out. No law requires it; it is market custom.
There is an increasingly common exception: vendor due diligence, commissioned and paid for by the seller before putting the company on the market. It sounds like an extra expense, but it usually pays off: it uncovers problems before the buyer finds them (and uses them to knock down the price), shortens the deal and signals seriousness. In competitive processes, arriving with vendor due diligence already done is a real advantage.
And if the deal falls through halfway through due diligence? Unless agreed otherwise, each side bears what it has spent so far. That is why it is worth setting it out in writing before starting, usually already in the letter of intent (LOI).
How to reduce your due diligence cost
You set the due diligence bill more than you think. Three levers:
- Prepare the documentation in advance. A complete, tidy data room —accounts, contracts, deeds, labour and tax status— is what cuts hours the most. It is, literally, money.
- Keep the accounts in order, audited if possible. Reliable accounts reduce verification work and, along the way, build trust.
- Work with an adviser who coordinates the process. A good M&A adviser sizes the scope so you don't overpay, organises the documentation and avoids the mistakes that most inflate (or sink) a due diligence. The alternative, handling the sale on your own, usually costs more in time and final price.
If you want to understand the full process before getting into figures, this guide to what due diligence is and how it works gives you the whole map. And the professionals who carry out this work —economists, auditors and lawyers— are grouped in bodies such as the General Council of Economists of Spain, a good reference for judging the standing of whoever you hire.
Frequently asked questions
How much does due diligence cost for an SME?
For a mid-sized Spanish SME, financial due diligence usually costs between €15,000 and €40,000, and a complete review (financial, legal and tax) between €30,000 and €90,000. The final figure depends on scope, company size and how well-organised the documentation is.
Who pays for due diligence, the buyer or the seller?
By market custom the buyer pays, since they are the ones who need to verify what they are buying. The exception is vendor due diligence, commissioned and paid for by the seller before putting the company up for sale.
Can due diligence be done more cheaply?
Yes. The main lever is preparing the documentation in a tidy data room before starting: it reduces the working hours, which is what gets billed. Having audited accounts and matching the scope to what really matters also brings the cost down.
How long does due diligence take?
In an SME it usually takes between 4 and 8 weeks, within a full sale process that lasts 6 to 12 months. A well-prepared data room shortens that timeline noticeably.