What Happens After I Accept an LOI?
When you accept a Letter of Intent, you may feel a rush of excitement—and fear.
For many owners, this is a pivotal turn in the sale process. The deal is not done, but it is suddenly very real. Your legacy. The last 30 years. The people, the memories, the business you built from the ground up. All of it can begin to feel like it is coming to a close.
The first thing to do is acknowledge those feelings.
In Done Deal, Ed Mysogland compares selling a business to a significant loss—something that often requires its own process of grief. That may sound heavy, but it is honest. Selling a business is not simply a financial transaction. It is a major life transition.
Once you have had a moment to process, the next steps generally unfold in a clear order—even if they are not always simple or easy.
A good broker will work tirelessly through this stage to keep the workload on both the buyer and seller as manageable as possible. But if there is one piece of advice I would pass along, it is this: keep communication at an all-time high.
Buyers and sellers lose confidence when the other party stops showing up, goes quiet, or delays the process without explanation. Stay present. Stay responsive. Stay locked in.
If you are the seller, your number-one objective is to keep running the business like this is the best year you have ever had. If you are the buyer, your job is to move financing and due diligence forward promptly. If you do not have a lender selected by the time you submit an LOI, you are already behind—and you may slow the entire process.
The process typically looks like this:
LOI → Due Diligence → Purchase Agreement → Closing → Transition
1. Due Diligence
Due diligence is when the buyer confirms that the business is what the seller represented before closing.
This often includes:
- Financial review: tax returns, P&Ls, bank statements, AR/AP aging, payroll records, and add-backs
- Customer, vendor, contract, and lease review
- Legal, licensing, insurance, and compliance review
- Operations review: employees, systems, equipment, inventory, and owner dependence
- Buyer site visits and management meetings, when appropriate
- Lender underwriting and approval, if financing is involved
- An SBA-required business valuation or appraisal, when applicable
- Occasionally, a Quality of Earnings report for larger or more complex transactions
One important distinction: your broker’s market valuation generally happens before the LOI. A lender’s independent valuation or SBA appraisal typically happens after the LOI is signed.
- Purchase Agreement Drafting and Negotiation
While diligence is underway, the attorneys typically begin turning the LOI into the actual binding deal documents.
Depending on the transaction, that may include:
- An Asset Purchase Agreement or Stock Purchase Agreement
- A clear definition of the assets and liabilities included or excluded
- Purchase-price allocation
- Seller-financing notes and security documents, if applicable
- Non-compete and non-solicit agreements
- Employment or transition agreements
- Representations, warranties, indemnification, and holdbacks
- Closing conditions and remaining contingencies
The LOI establishes the main business terms. The purchase agreement is where the details get real.
- Final Approval and Closing Preparation
This is the “remove the contingencies and get ready to sign” stage.
Before closing, the parties may need to complete:
- Final buyer loan approval and funding
- Completion of due diligence to the buyer’s satisfaction
- Landlord consent or a lease assignment
- Third-party consents, licenses, or franchise approvals
- Final inventory or equipment counts, if relevant
- Wire instructions, the closing statement, and confirmation of funds
- A plan for communicating with employees and customers—usually kept confidential until the right moment
4. Closing
This is the day ownership officially changes hands.
At closing:
- Documents are signed
- Funds are transferred
- Ownership changes hands
- Keys, passwords, records, accounts, and operational control are transferred
- Any seller note begins, if there is one
It is a big day. And while it may feel like an ending, it is also the beginning of a new chapter for both sides.
- Transition and Post-Closing Support
The seller’s transition support helps protect the relationships and value the buyer just acquired.
That may include:
- Introductions to key employees, clients, vendors, and referral partners
- Training and operational handoff
- A defined support period under the purchase agreement
- Ongoing obligations tied to an earnout, holdback, or seller note
The best transitions are thoughtful, organized, and relationship-driven. The goal is not simply to transfer ownership. It is to give the next owner the best possible chance to carry the business forward well.
Jeremiah Morton, Business Broker
