Is it standard practice? No. Can it be done? Yes. As an attorney representing Buyers and Sellers I see an array of things. My last deal, the Sellers needed reassurance that the buyer was serious about the deal so a deposit was required after the signing of the LOI. It was a good faith deposit so you should negotiate what you want. If this is a business you are passionate about and if there are others looking at it, then you may want to do the deposit. My suggestion is that your deposit should not exceed 5-10k.

I would echo the thoughts from other commentors that a deposit should not be used at the LOI stage/it should be very small. Even after signing an LOI, both parties have a LOT of reasons to back out of the deal. That means your safety deposit may be subject to forfeiture if the seller suddenly changes their mind and backs out (or you do with for a good reason), with limited recourse to get the money back.

If the Selller's agent is concerned about you losing interest post-LOI, that should be encouragement for them to move quickly to close. In lieu of a deposit, ask the Seller's agent what would be helpful to demonstrate seriousness about closing from you.

Doing healthcare M&A in the US for multiple years, I have never seen such a deposit ever. To be honest, it feels kinda slimy for Seller's agent to make this requirement.