Letter of intent template
A letter of intent (LOI) sets out the main terms of a deal before anyone pays lawyers to write the full contract. Buyers use it to make a serious offer for a business, and sellers sign it to show they accept the outline and will stop shopping the deal for a while. This template is written for buying a small business or its assets. Read it below, then fill in your offer and send it in SignMaster.
Updated November 5, 2026 · 4 min read
The contract
Gray blanks are yours to fill in before you send. Each signer fills in the blanks in their color.
- You, before sending
- Buyer
- Seller
Letter of Intent to Purchase a Business
Date: Letter date
This letter of intent (the "Letter") sets out the main terms on which Buyer name (the "Buyer") proposes to buy the business known as Business name (the "Business") from Seller name (the "Seller"). Except as section 10 says, it is a statement of intent, not a binding agreement to buy or sell.
1. The transaction
The Buyer proposes an Deal structure. The purchase would include Assets included, and would not include Assets excluded. The Business would be delivered free of debts and liens except those the Buyer agrees to take on in the final agreement.
2. Purchase price
The proposed price is Purchase price, paid as follows: How the price is paid. Inventory and working capital at closing will be handled this way: Working capital terms.
3. Due diligence
For Due diligence days days after the Seller signs this Letter, the Buyer and its advisers may review the Business. The Seller will provide, on request, financial statements and tax returns for the last Years of financial records years, customer and supplier contracts, leases, licenses and permits, a list of employees and their pay, and reasonable access to the premises and to key staff, at times that don't disrupt the Business.
4. Conditions
Any purchase would depend on: due diligence results satisfactory to the Buyer; a definitive purchase agreement signed by both parties; Financing condition; consent of the landlord and other parties whose consent is needed; transfer or reissue of the licenses the Business needs; and the Seller's help with the transition for Transition support in days days after closing.
5. Running the Business until closing
Until closing or the end of talks, the Seller intends to run the Business in the ordinary way, keep its assets in good condition, and not take on unusual debts, sell major assets or change pay without telling the Buyer.
6. Exclusivity (binding)
For Exclusivity period in days days after the Seller signs, or longer if both parties agree in writing, the Seller and its representatives will not solicit, encourage or negotiate any offer from anyone else to buy the Business or a significant part of it.
7. Confidentiality (binding)
Both parties will keep the existence and terms of this Letter, and all information exchanged under it, confidential, sharing it only with advisers, lenders and employees who need it and who are bound to keep it confidential. If talks end, the Buyer will return or destroy the Seller's documents on request.
8. Costs (binding)
Each party pays its own legal, accounting, broker and other costs related to this Letter and the proposed purchase, whether or not it closes.
9. Timing and expiry
The parties aim to sign a definitive agreement and close by Target closing date. This offer expires if the Seller has not signed this Letter by Offer expiry date. Either party may end negotiations at any time by written notice; sections 7 and 8 continue after that.
10. What is binding
Only sections 6, 7, 8, 10 and 11 are legally binding. Everything else describes the parties' current intentions, and neither party is obliged to complete any purchase unless and until a definitive written agreement is signed by both.
11. Governing law
This Letter is governed by the laws of the state of State. It may be signed electronically and in counterparts.
Contacts
Buyer contact: Buyer contact Email: Buyer email
Seller contact phone: Seller phone Seller's adviser, if any: Seller adviser
I understand that sections 6, 7, 8, 10 and 11 bind me once I sign, including the exclusivity period in section 6.
Buyer
Seller, accepting these terms
Opens it in SignMaster as a template you can edit and send.
A starting point, not legal advice. Have a lawyer review it for your state and situation.
On this page
What a letter of intent does
It gets both sides to agree on the big numbers early: the price, how it's paid, what's included and when the deal should close. Once it's signed, the buyer spends money on due diligence (accountants, lawyers, inspections) knowing the seller won't sell to someone else mid-review. If the numbers don't survive diligence, the buyer can walk away without owing anything beyond what the LOI says.
Binding and non-binding terms
The core of any LOI is the line between what binds and what doesn't. The deal terms (price, structure, closing date) are usually non-binding: they describe the deal the parties intend to sign later. A few terms do bind immediately: exclusivity, confidentiality, who pays which costs, and governing law. Courts have enforced LOIs as full contracts when the wording blurred that line, so this template names the binding sections one by one and says that nothing else is binding.
What the template covers
- The deal: the business, whether it's an asset or ownership purchase, and what's included or left out.
- Price and payment: cash at closing, a seller note, an earn-out, or a mix, plus how working capital is handled.
- Due diligence: how long the buyer has, and the records and access the seller will provide.
- Conditions: financing, a signed purchase agreement, landlord consent, licenses and key employees.
- Exclusivity: a no-shop period in which the seller won't negotiate with other buyers.
- Confidentiality and costs: both sides keep the talks private and pay their own advisers.
- Timing: a target closing date, and a date the offer expires if the seller doesn't sign.
Mistakes buyers and sellers make
- Writing "subject to" everywhere and calling nothing binding, including exclusivity. The seller can then keep talking to other buyers.
- An open-ended exclusivity period. Give it a number of days, with an option to extend in writing.
- Leaving out the deal structure. Asset versus ownership purchase changes taxes and liabilities for both sides.
- No expiry date on the offer. An LOI the seller signs three months later may no longer reflect what the buyer will pay.
- Using it as the purchase agreement. An LOI is an outline; the definitive agreement needs a lawyer.
How to send it with SignMaster
- 1
Open the letter
Choose Use this template. It opens in SignMaster with the buyer signing first, to show the offer is real, and the seller signing second to accept it.
- 2
Write your offer in the gray blanks
The business, the structure, the price and how it's paid, the diligence period, the exclusivity days, the conditions and the offer expiry. Your broker or adviser can prepare the draft and leave the signing to you.
- 3
Keep it confidential
A sale is sensitive for staff and customers. Require an access code for the seller, either one you share by phone or a one-time code emailed to them, and set the sign-by date to match the offer expiry in section 9.
- 4
Track the response
You can see when the seller opens the letter. If they decline instead of signing, they can give a reason, which tells you where the negotiation stands. When both have signed, each gets the PDF with its certificate of completion.
Offers to several sellers
A buyer putting together several small companies in one region, such as pest control routes or dental practices, may send the same outline to a handful of owners with a different price and closing date for each. Bulk send does that from a spreadsheet: one row per seller, one private envelope each, with columns named after the gray blanks like Purchase price and Target closing date. Each seller sees only their own offer.
Questions? Answers.
Is a letter of intent legally binding?
Usually only partly. The deal terms are typically non-binding, while exclusivity, confidentiality and cost terms bind once signed. This template lists exactly which sections bind, because unclear wording is what leads courts to treat an LOI as a contract.
What's the difference between an LOI and an MOU?
They overlap. An LOI usually comes before a specific transaction, like buying a business. A memorandum of understanding more often records how two organizations will work together.
How long should exclusivity last?
Long enough for due diligence and drafting, often 30 to 90 days for a small business. Tie it to the diligence period and allow a written extension.
Can the seller sign the LOI electronically?
Yes. E-signatures are generally valid for business letters and contracts, and the seller can sign from a phone or computer without an account.