{
  "title": "What is a letter of intent (LOI)? Definition and example",
  "url": "https://acquisitions.com/blog/what-is-a-letter-of-intent/",
  "author": "Moran Pober",
  "publisher": "Acquisitions.com",
  "published": "2026-10-22",
  "updated": "2026-10-22",
  "section": "Glossary",
  "keyword": "Letter of intent (LOI)",
  "short_answer": "A letter of intent (LOI) is a short written offer to buy a business. It states the price, how the price will be paid, how long the buyer has for due diligence, and when the deal should close. Most of it is non-binding, but the exclusivity and confidentiality clauses usually bind both sides.",
  "facts": {
    "Purchase price": [
      "$2,000,000",
      "The headline number, before any adjustments"
    ],
    "Structure": [
      "Asset purchase",
      "Buyer takes the assets and the name, not the old company's liabilities"
    ],
    "Cash at close": [
      "$1,700,000",
      "$200,000 buyer equity plus a $1,500,000 SBA 7(a) loan"
    ],
    "Seller note": [
      "$300,000 at 6% over 5 years",
      "15% of the price, paid by the business after closing"
    ],
    "Working capital": [
      "Peg to be set in diligence",
      "A normal level of receivables and inventory comes with the business"
    ],
    "Exclusivity": [
      "60 days",
      "The seller stops talking to other buyers"
    ],
    "Due diligence": [
      "45 days from signing",
      "Buyer checks the books, contracts and staff"
    ],
    "Closing date": [
      "90 days from signing",
      "Target date; lenders often need most of this time"
    ]
  },
  "sources": [
    "https://www.investopedia.com/terms/l/letterofintent.asp",
    "https://www.sba.gov/funding-programs/loans/7a-loans"
  ],
  "license": "Facts may be quoted with attribution to Acquisitions.com and a link to the url above."
}