How to make LOI standout

searcher profile

April 16, 2024

by a searcher from University of Pennsylvania - The Wharton School in Los Angeles, CA, USA

Any advice on how to make an LOI standout if there are 10+ offers on a deal besides strictly price?

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commentor profile
Reply by an intermediary
from University of Colorado at Boulder in Charlotte, NC, USA
The more professional, the better the LOI. I regularly get LOIs on my listings where the buyer looks like they drafted the LOI the night before. Find a solid template and use it. I think timelines are important, but be aware that if you anchor the seller on a timeline and then don't deliver, the seller is going to get upset. I've had to convince more than one seller not to walk when promised timelines are not met by the buyer. If you are using an SBA loan, plan on at least 90 days and it can creep closer to 120 days. If you are using an SBA and promise###-###-#### days to close, good luck!!
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Reply by a professional
from Villanova University in West Chester, PA, USA
Hi ^redacted‌, there are a number of ways to make an LOI stand out besides price. Most importantly, it requires conversations with the seller to understand what other aspects of the deal are important to them. This may include retaining all of the employees, maintaining customer and vendor relationships, having a seller note so that they can earn additional money beyond the purchase price to increase the total value of the transaction, or having retained equity so that they can have a second opportunity to sell the business at a higher valuation, and more. I go over these options and more in my course "Acquisition Insights" and template LOI which are linked in my bio or, you can also schedule a complementary consultation with me.
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