Letter of Intent Checklist for Buying a Business

Document the Economic Baseline

• Price and whether it represents enterprise or equity value
• Normalized SDE or EBITDA and covered period
• Cash, debt, inventory, receivables, deposits, and working-capital treatment
• Cash at closing, seller note, earnout, escrow, and holdback

Define Transaction Scope

• Asset versus equity purchase
• Included and excluded entities, assets, contracts, and liabilities
• Real estate, lease, vehicles, equipment, intellectual property, data, and accounts
• Required licenses, permits, employees, and qualifying personnel

Set Access and Timing

Define the diligence period, data access, seller cooperation, site visits, professional review, and target closing. Preserve the right to revise or stop when evidence changes material assumptions, subject to counsel’s drafting.

Address Financing and Third-Party Conditions

Identify financing, valuation, lease assignment, landlord approval, franchise consent, customer or vendor consent, license approval, lien release, insurance, and regulatory conditions.

Separate Binding Provisions

LOIs commonly describe principal transaction terms as nonbinding while confidentiality, exclusivity, access, expenses, publicity, governing law, or other clauses may be binding. Language and jurisdiction matter.

Create the Re-Verification Baseline

Attach the facts that supported the offer and identify what will be refreshed before closing. Preserve versions so the buyer can see performance, record, license, lien, contract, employee, and customer changes since the LOI.