As a business transaction attorney with over 12 years of experience representing buyers and sellers in hundreds of U.S. company acquisitions, I’ve drafted and negotiated more letters of intent (LOI) than I can count. A well-written letter of intent to purchase a business is the critical first binding step that sets the tone for the entire deal. In this article, I’m giving you my battle-tested, attorney-reviewed sample LOI business purchase template completely free, along with line-by-line explanations so you can customize it confidently for your transaction.
Download the free Letter of Intent to Purchase a Business template (PDF & Word):
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Important Disclaimer: This sample letter of intent for business purchase is provided for informational purposes only and does not constitute legal, tax, or financial advice. Always consult a qualified attorney and CPA in your jurisdiction before signing any document. Laws vary by state.
A letter of intent to purchase a business (sometimes called an offer to purchase a business, business purchase letter of intent, or LOI for business acquisition) is a written document that outlines the preliminary terms under which a buyer proposes to acquire a company. While most provisions are non-binding, key sections—exclusivity, confidentiality, and expense reimbursement—are usually enforceable.
According to the American Bar Association’s 2024 Private Target Mergers & Acquisitions Deal Points Study, 94% of private company sales begin with a signed LOI. Getting the language right early prevents expensive renegotiations later.
Use this letter of intent purchase of business template when you are:
| Section | Binding or Non-Binding? | Why It Matters |
|---|---|---|
| Purchase Price & Structure | Non-binding | Shows cash vs. stock vs. seller note breakdown |
| Exclusivity / No-Shop | Binding | Prevents seller from shopping the deal (usually 60-120 days) |
| Due Diligence Access | Binding | Grants buyer access to financials, contracts, employees |
| Confidentiality | Binding | Reinforces or supplements existing NDA |
| Closing Conditions & Timing | Non-binding | Material adverse change, financing, etc. |
Click below to instantly download the exact letter of intent to purchase business PDF and editable Word version I provide to my own clients (redacted for general use).
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1. Date and Parties
Always include the full legal name and state of incorporation/formation of both buyer and target company.
2. Proposed Transaction
Specify whether you are buying assets or stock. Asset purchases are more common for tax reasons (see IRS Section 338(h)(10) elections at IRS.gov).
3. Purchase Price and Payment Terms
Break down cash at closing, seller financing, earn-outs, working capital adjustments, and escrow holdbacks. Be specific—vague language here causes 40% of deals to renegotiate price post-LOI (ABA 2024 Study).
4. Exclusivity Period
60-90 days is market standard for companies under $10M; 90-120 days for larger deals. Include “automatically extending” language during diligence delays beyond your control.
5. Access to Information & Cooperation
Seller must provide electronic data room access within 5-10 business days.
6. Conduct of Business
Seller agrees to run the business in the ordinary course—no big bonuses, new contracts, or distributions.
7. Expenses & Breakup Fee (Optional)
Most small deals are “each party pays own expenses,” but buyers of larger companies often negotiate a modest termination fee if the seller accepts a superior offer.
8. Governing Law
Delaware or the state where the target is headquartered is most common.
Your LOI should clearly state which structure you propose—changing later almost always triggers price renegotiation.
The IRS treats asset sales and stock sales completely differently:
Source: IRS.gov – Capital Gains and Losses and Publication 544 – Sales and Other Dispositions of Assets
Is a letter of intent to buy a business legally binding?
Only the exclusivity, confidentiality, and expense provisions are typically binding. The purchase price and closing obligation are non-binding until the definitive agreement is signed.
How long should an LOI for business purchase be?
3-8 pages is ideal. Longer than 10 pages usually means you’re negotiating the purchase agreement prematurely.
Can I use this template for buying a franchise?
No—franchise resales have unique FDD and franchisor approval requirements.
Don’t waste thousands on custom drafting for the first step. Download my proven letter of intent to purchase business template that has closed over $400M in transactions.
100% Free • Attorney-Drafted • Updated for 2025 • Instant Download
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Remember: This is a starting point. Every deal is unique. Have your transaction attorney review before sending to the seller.
Wishing you a smooth and successful acquisition!
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