What is the Letter of Intent When Selling a Business?
Commercial business sales Irvine involve a complex process. That is why you need to get the right help in order to sell fast and at the right price. The business broker in Orange County that you hire can help you sell within months or keep your business on the market for years. At So-Cal Business Brokers we understand how tough the process of selling a business is. We do our best to help you sell fast and at maximum profit. On average, we sell businesses within 10 months.
Bearing in mind the process of selling can be demanding, we keep you at ease by educating you on all the steps that will be involved. The Letter of Intent (LOI) is one of the documents you will have to deal with in commercial business sales Irvine. This is irrespective of the type of business you are selling. What exactly is this document?
The Letter of Intent is submitted to the seller by the buyer. This takes place after meeting and reviewing the company with the seller and business broker. When selling with us, our in-house team will help review the Letter of Intent to ensure you are not on the losing end. Our main duty will be helping you reviewing the terms discussed in the LOI. Our experience helps us identify inappropriate terms so as to keep you from landing in trouble.
A typical Letter of Intent outlines the specifics of the deal structure. The details discussed include the following:
- Price the buyer is ready to pay for the business
- How the payments will be made
- Timeline of the transaction
- Details on training and transition requirements of the business seller
- Non-compete agreement
- Length of due diligence
It is good to remember that the Letter of Intent is not a binding contract. It is just a tool that helps the seller and the buyer get on the same page. Once the terms on the LOI are accepted by both parties, they move forward to the binding closing contract. A standard LOI will also have good faith deposit which is made into an escrow by the buyer. Our in-house transactional attorney will help with the payments. In case the buyer backs out of the deal for reasons in due diligence, he will get the full refund of the deposit.
For more information on the Letter of Intent and the process of commercial business sales Irvine, contact us now and schedule a complimentary consultation. Our business brokers are always happy to help.