When buying or selling a business, one of the first formal steps in the negotiation process is the Letter of Intent—commonly known as the LOI.
At BizBroker+, we use this document to outline the initial terms of a potential deal between a buyer and a seller, helping both parties move forward with clarity and confidence.
đź’Ľ What Is a Letter of Intent?
A Letter of Intent is a non-binding agreement that sets the groundwork for a business purchase. It’s not the final contract—but it helps get both sides aligned on the big picture before diving into deeper negotiations.
Some key things typically included:
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The proposed purchase price
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A timeline for due diligence
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Agreements around confidentiality
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Clarification that the LOI is not legally binding
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Basic financing terms (down payment, loans, or seller financing)
🧠Why Does It Matter?
Think of the LOI as a handshake—written down. It doesn’t lock anyone into a deal, but it does:
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Show serious intent from the buyer
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Give the seller confidence to share sensitive business information
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Create a shared understanding before drafting the final purchase agreement
It also helps avoid misunderstandings, keeps negotiations on track, and can speed up the closing process.
🚨 What It’s Not
The LOI is not a final contract.
It doesn’t guarantee a sale.
It doesn’t include every tiny detail of the transaction.
Instead, it serves as a starting point—an outline that both sides agree to explore further. Either party can walk away at any time, without legal consequences.
đź“Ą Get the Letter of Intent Template
If you’re working on a deal—or preparing for one—you’ll want a solid LOI to guide the process.
Click below to download the BizBroker+ Letter of Intent template, the same one we use to help brokers all across the country close successful business sales.
