Clause by clause, verified August 2026

Letter of Intent to Buy a Business: Template, Sample LOI and Terms to Purchase a Business

A letter of intent to buy a business is a short document, usually two to four pages, that fixes your price, your deal structure and your timetable before either side starts paying lawyers. Nearly all of it is deliberately non-binding. The price, the structure and the closing conditions describe where you intend to land rather than promising that you will buy. Three clauses normally do bind you from the moment you sign: confidentiality, exclusivity, and who pays which costs. Those three are the real purpose of the document, because they buy you a window in which the seller stops talking to other buyers while you run diligence.

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What no source will tell you is how long that window should run or how large a deposit should sit behind it, because no US body publishes a standard. We checked the SBA business guidance, the IBBA and the LOI templates published by US law firms in August 2026, and none of them states a number. The ranges circulating on advisory blogs are individual opinion, not surveyed data, so this page does not repeat them as fact. What can be checked is what the venues actually do, and they differ far more than buyers expect: Acquire.com builds the LOI for you and wires escrow into it, while Empire Flippers has no LOI stage at all for a listed purchase. Both were read firsthand on 26 August 2026 and both appear in the table below. Buyouts is a marketplace for AI SaaS where verified MRR, ARR, growth and churn are published before a listing goes live. Browsing is free, buyer membership is planned rather than currently on sale, listings shown here are illustrative product UI, and nothing on this page is legal advice.

The purchase price is the least important number in your letter of intent. The exclusivity window, the diligence period and the financing contingency decide whether you can still walk away, and most first-time buyers sign all three without negotiating any of them.

Read firsthand, 26 August 2026

Where a letter of intent is actually required, venue by venue

Buyers assume the LOI is a fixed step in every deal. It is not. On one major marketplace the platform drafts it for you and attaches escrow, and on another there is no LOI at all: you click a button and wire the money. Everything below was read on each provider's own pages, and where a provider publishes nothing this table says so instead of guessing.

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Venue	Is there an LOI stage	What binds you at signature	Deposit or escrow
Acquire.com (formerly MicroAcquire)	Yes, built into the platform. Its LOI Builder is stated to cover 85% to 90% of on-platform deals and to take about five minutes	A no-shop clause is included automatically, and the LOI may carry a mutual NDA. The purchase itself is not binding	Escrow runs through Escrow.com. You choose who pays the fee: you, the founder, or a 50/50 split
Empire Flippers	No. A listed business is bought with the Buy It Now button and a bank wire	Nothing is signed first. In its own words, all sales are final and it makes no guarantees, expressed or implied	No deposit is published. Where two buyers wire for one listing it is first in, and losing wires are refunded
Flippa	Not published on any page we could read. Its pricing and process pages return a Cloudflare challenge to automated requests	Unverified, so treat the listing terms as the source	Unverified. Flippa has offered escrow historically but publishes no LOI policy we could confirm
Curated brokers: Website Closers, Quiet Light, FE International	Yes. A broker-run sale runs on an LOI before the definitive purchase agreement	Whatever the broker's own form says, which is why you read it rather than sign it. Exclusivity is the clause worth negotiating	Varies. None of the three publishes a deposit policy, so ask before you offer
BizBuySell	Not published. Listings are advertisements and the parties transact off the platform	Only what the two of you privately sign	None. Escrow is arranged by the buyer and the seller themselves
Off-market, direct from the owner	Only if you write one, and this is where an LOI earns the most	Only what your own document says, which is why the drafting matters most here	None unless you create it. A deposit is how you make a private seller take you seriously
Buyouts	Verified MRR, ARR, growth and churn are published before a listing goes live, so diligence starts earlier than the LOI	Nothing today. Listings and metrics shown are illustrative product UI	Escrow-backed closes are part of the planned model. Membership is planned, not currently on sale

Acquire.com LOI Builder details, the automatic no-shop clause and the Escrow.com fee split were read on Acquire.com's own letter of intent explainer on 26 August 2026. The Empire Flippers Buy It Now process, the all sales are final wording and the first in wire policy were read on its buyer FAQ on 26 August 2026. Flippa returned a Cloudflare challenge to every automated request on 26 August 2026, so its LOI position is recorded as unverified rather than assumed. Website Closers, Quiet Light and FE International publish no deposit or LOI policy on their public pages. Providers change their processes, so confirm before you rely on any row. Nothing here is legal advice.

The clause table

Every clause in a letter of intent, and whether it binds you

This is the part buyers get wrong. An LOI is not binding as a whole, and it is not non-binding as a whole either. It is a mostly non-binding document with a few genuinely enforceable clauses buried in it, and the enforceable ones are rarely the ones people worry about. The binding column below reflects standard US drafting convention rather than a rule of law, because what binds you is ultimately what your specific document says.

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Clause	Binding at signature	What it does	What to watch
Purchase price	No	States your number and the basis for it, usually a multiple of earnings	On an SBA deal, any price above the lender's independent valuation is made up in your cash, not in loan
Deal structure	No	Says whether you are buying assets or stock, and what is excluded from the sale	Asset purchases leave most liabilities behind. Sellers prefer stock sales for tax reasons, so expect this to be contested
Payment terms	No	Splits the price into cash at close, any seller note, and any holdback	SBA prohibits seller earnouts outright. A seller note counts toward your equity injection only on full standby
Exclusivity, or no-shop	Yes	Stops the seller negotiating with other buyers for a fixed period	This is what you are actually buying. Too short and diligence runs out, too long and the seller will want a deposit for it
Confidentiality	Yes	Keeps the financials, and the fact that you are talking at all, private	Usually mutual. If the seller's form is one-way, ask for it to run both directions
Due diligence period	No, but it starts the clock	Defines how long you have and what access you get	Access matters more than length. Name the documents, the accounts and the systems you expect to see
Financing contingency	No	Lets you walk away if the loan does not come through	On an SBA acquisition, tie it to a loan number being issued rather than to a pre-qualification letter
Earnest money deposit	Yes, if you pay one	Signals to the seller that you are a real buyer rather than a tire-kicker	Tie refundability to the diligence period in writing. No US body publishes a standard deposit size
Expenses and costs	Yes	Says that each side pays its own advisers	A small clause with real money in it. On an SBA deal the valuation and any Quality of Earnings report are your cost
Transition and seller support	No	Sets how long the seller stays involved and in what role	SBA bars a selling owner from remaining an officer, director or employee. A consulting agreement is the only route
Key people and employees	No	Names who has to stay for the business to be worth the price	If the earnings walk out with the owner, the lender's coverage test will find it before you do
Expiration date	Yes	Sets the date your offer lapses if it is not accepted	Without one, a stale LOI sits in a drawer and gets used as leverage against other buyers
Governing law	Yes	Names the state whose law applies to the binding clauses	Pick an actual state. To be agreed later is how a dispute becomes expensive
The non-binding statement	Yes, and it is what makes the rest non-binding	States explicitly which clauses survive signature and which do not	If this is missing or woolly, your price can be read as a firm offer. This is the clause to have an attorney check

The binding column reflects the standard US drafting convention that confidentiality, exclusivity, expenses, expiry and governing law survive signature while the commercial terms do not. It is not a statement of law, and it is not legal advice: what binds you is what your particular document says, read against your state's law. SBA points are from SOP 50 10 8 with technical updates effective 1 June 2025 and SOP 50 10 8.1, which applies to applications issued an SBA loan number on or after 1 October 2026, both read firsthand in August 2026. Have a deal attorney review any LOI before you sign it. The cost of that review is trivial against the cost of an exclusivity clause you did not understand.

Side by side

Writing an LOI on a verified listing versus an unverified one

A fair look at what each does well. Both are useful. Here is where they differ.

Feature	Buyouts	A verbal offer or a handshake
What your price is based on	Verified MRR, ARR, growth and churn published before the listing went live	A seller-prepared profit and loss statement and a screenshot of a dashboard
How much diligence the LOI has to buy	Less, because the revenue was verified at source before you made an offer	More, and a longer exclusivity window to fit it in
The most likely reason the deal dies	Price disagreement, which surfaces early and cheaply	Revenue that does not reconcile in week five, after you have paid for diligence
What the exclusivity clause costs you	A short window, because there is less to discover	Weeks off the market, which is why sellers resist granting it
Deposit expectations	Escrow-backed closes are part of the planned model here	Set case by case, with no published norm anywhere in the market
Who verifies the numbers	The marketplace, before publication, as a condition of listing	You, at your own expense, after you have signed
What you can buy today	Browsing is free and membership is planned rather than on sale	A live listing you can transact on now, which is a genuine advantage they have

Comparison reflects general, publicly understood positioning. Capabilities change, so check each marketplace for the latest. Trademarks belong to their owners.

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The exclusivity window is the only thing you are actually buying

Strip an LOI back and one clause is doing the work. Exclusivity, sometimes called the no-shop, is the seller agreeing to stop marketing the business and stop negotiating with anyone else for a set period. Everything else in the document either describes a deal you have not committed to or protects information you both already share. That is why the negotiation over exclusivity is the negotiation, and why sellers who have been through a sale before push back on it hard. Handing a buyer a long exclusivity window means taking the business off the market for someone who can still walk away for free, and if that buyer does walk, the listing goes back up looking stale. The buyer wants the window long enough to finish diligence and get a lender to a decision. The seller wants it short enough that a failed deal costs a few weeks rather than a quarter. Neither side has a published benchmark to point at, which is exactly why it gets negotiated on feel. The practical move is to work backwards from your own constraints rather than asking for a round number: if your lender needs sixty days to reach a loan number and your accountant needs three weeks with the books, say so in the document and ask for that plus a margin. A specific, justified window is far easier for a seller to grant than a generic one, and it makes you look like a buyer who has done this before. If the seller will only grant a short window, the honest response is to shrink the scope of diligence to match rather than to sign and hope, because the clause that expires mid-diligence leaves you with sunk costs and no protection.

What an SBA loan does to your letter of intent

If you are financing with an SBA 7(a) loan, the LOI stops being a purely commercial document and starts having to survive an underwriter. Three published rules bite directly on clauses buyers routinely sign without thinking. First, valuation: under SOP 50 10 8.1, which applies to applications issued an SBA loan number on or after 1 October 2026, every change of ownership needs an independent business valuation from an accredited Qualified Source, requested by and prepared for the lender. A valuation you or the seller commissioned is unusable. If your agreed price comes in above that valuation, the gap does not become a bigger loan, it becomes more of your cash at the closing table. So a price you fixed in an LOI in August can quietly become a five-figure personal problem in October. Second, seller earnouts are prohibited under both SOP 50 10 8.0 and 8.1. A performance-based payment from you to the seller is out, so if your LOI bridges a valuation gap with an earnout, the deal is not financeable as written. Buyer rebates, which flow the other way, are allowed, and under the new rules those proceeds have to pay down loan principal. Third, the seller cannot stay. A selling owner may not remain an officer, director, stockholder or employee, so a transition clause promising that the founder stays on the payroll for a year has to be rewritten as a consulting agreement, capped at twelve months under the current rules and at twenty-four months in aggregate from 1 October 2026. The fix for all three is the same and it is cheap: send the draft LOI to your lender before you sign it, not after. A lender who sees the document early will tell you in an afternoon which clauses they cannot fund.

Why the marketplaces disagree about whether you need one at all

The most surprising thing we found reading the venues directly is that they do not agree the LOI is a step. Acquire.com has made it central: it ships an LOI Builder that it says accounts for 85% to 90% of the deals done on the platform, it inserts a no-shop clause automatically, and it wires Escrow.com into the same flow with an explicit choice about who pays the escrow fee. On that platform the LOI is the product. Empire Flippers has gone the other way entirely. Its buyer FAQ describes clicking a Buy It Now button and sending a bank wire, states that all sales are final and that it makes no guarantees expressed or implied, and explains that where two buyers wire for the same listing the first wire in wins and the others are refunded. There is no LOI stage to negotiate, because the marketplace has already done the vetting and set the price, and the competition between buyers is settled by speed rather than by terms. Neither model is wrong, and which one suits you depends on how much of the risk you want to carry yourself. A curated marketplace that vets listings and prices them can plausibly compress the process, and its published outcome data is the best evidence any venue offers: when we read the Empire Flippers scoreboard on 31 August 2026 it reported 2,670 businesses sold, an average of 125 days from listing to sold, and sellers achieving 95% of asking price. A platform that hands you an LOI Builder is instead giving you the tools to structure your own protection. Where an LOI matters most is the case neither model covers, which is buying off-market and direct from an owner. There is no platform, no vetting and no escrow unless you build them, and the document you write is the entire structure of the deal.

Good questions

Letters of intent to buy a business, answered

Partly, and that is the answer that matters. The commercial terms, meaning the price, the structure and the closing conditions, are normally written as non-binding statements of intent. A handful of clauses are binding from signature: confidentiality, exclusivity, allocation of expenses, the expiry date and the choice of governing law. What binds you is what your specific document says, so the non-binding statement itself is the clause to read first.

It is a short document, usually two to four pages, in which a buyer sets out the price, the deal structure and the timetable they propose, before either side spends money on lawyers or diligence. Its practical function is to lock in an exclusivity period so the seller stops taking other offers while the buyer investigates the business and arranges financing.

Start with the parties and the business being bought, then state the price and how you reached it, the structure, the payment split, the diligence period and access you need, any financing contingency, the exclusivity window, confidentiality, who pays costs, an expiry date, the governing state, and an explicit statement of which clauses bind. Keep it short. Anything you cannot defend in diligence should not be in it.

Fourteen clauses cover almost every LOI: purchase price, deal structure, payment terms, exclusivity, confidentiality, the diligence period, a financing contingency, any earnest money, expenses, transition and seller support, key people, an expiry date, governing law, and the statement of what is binding. The table above lists all fourteen with what each one does and where buyers get caught.

For as long as its expiration clause says, and no longer. That is the entire purpose of the expiry date: without one your offer sits open indefinitely and a seller can use it as leverage against other buyers months later. Most buyers set expiry to give the seller a short, defined period to accept, then let the exclusivity clock run separately from acceptance.

There is no US standard and no body publishes one. We checked SBA guidance, the IBBA and law firm templates in August 2026 and none states a number. The useful approach is to work backwards from your own constraints: how long your lender needs to reach a loan number, plus how long your accountant needs with the books, plus a margin, and then justify that figure to the seller.

You can draft one yourself, and many buyers do, but have an attorney read it before you sign. The specific risk is the non-binding statement: if it is missing or vague, terms you meant as a proposal can be argued as a firm offer. A short review is inexpensive against the cost of an exclusivity or confidentiality clause you did not fully understand.

Generally yes on the deal itself, because the commercial terms are non-binding. What a seller usually cannot do is negotiate with another buyer during the exclusivity period, since that clause is binding. So a seller can decide not to sell to you, but breaching the no-shop while your window is running is a different matter and is the main remedy an LOI actually gives a buyer.

Usually yes, and that asymmetry is why sellers resist long exclusivity windows. The non-binding commercial terms mean a buyer who dislikes what diligence turns up can walk. The exceptions are any earnest money you agreed to forfeit outside the diligence period, and the binding clauses on confidentiality and expenses, which survive whether or not the deal closes.

There is no published US standard, and this page will not invent one. What matters more than the amount is the refundability: tie it in writing to the diligence period, so the deposit is fully refundable while you still have the right to investigate. A deposit that becomes non-refundable before diligence ends transfers the entire risk of the seller's numbers onto you.

The LOI is mostly non-binding and sets direction. The purchase agreement, usually an asset purchase agreement or a stock purchase agreement, is fully binding and is the document that actually transfers the business. The LOI comes first, buys you exclusivity, and gives the lawyers a term sheet to draft from. A deal moves from one to the other after diligence.

Due diligence and the definitive purchase agreement, usually running in parallel with financing. You investigate the financials, contracts, customers and systems while your lender underwrites, and your attorney drafts the purchase agreement from the terms in the LOI. On an SBA deal the lender also orders its own independent business valuation during this period.

Buyers usually prefer an asset purchase because it leaves most historical liabilities with the seller and resets the tax basis of what you buy. Sellers usually prefer a stock sale for the capital gains treatment. State it in the LOI rather than leaving it open, because the two structures produce materially different prices and the argument is much cheaper to have before diligence than after.

They differ completely. Acquire.com builds the LOI into the platform through an LOI Builder it says covers 85% to 90% of on-platform deals, inserting a no-shop clause automatically and attaching Escrow.com. Empire Flippers has no LOI stage for a listed purchase: its buyer FAQ describes clicking Buy It Now and sending a wire, and states that all sales are final. Both were read on 26 August 2026.

SBA does not mandate the document itself, but three published rules change what yours can say. Seller earnouts are prohibited. The selling owner cannot stay on as an officer, director or employee, so transition has to be a consulting arrangement. And from 1 October 2026 the lender orders an independent valuation, so a price above it is funded from your cash rather than from the loan. Send the draft to your lender before you sign.

Plan on roughly 60 to 90 days on an SBA-financed small acquisition, because diligence and loan underwriting run in parallel rather than one after the other. For context on the whole cycle, the Empire Flippers scoreboard reported an average of 125 days from listing to sold when we read it on 31 August 2026, with sellers achieving 95% of asking price.

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