How to Proceed with an LOI

by a searcher from Columbia University - Columbia Business School

4 years ago

I have had 2 calls with the owner and reviewed the financials enough for me to move forward and proceed with a LOI. This business is generating ~$500K SDE and selling for 3X. I'm a self funded searcher and owner is flexible with upfront payment and seller note, but also looking into lending options or search investors. 

1. What should go into an LOI and who can help draft?
2. How should I structure the deal given the current transaction?
3. What happens next after LOI is submitted?

Many thanks.

1 like
236 views
8 comments

intermediary from Southwest Missouri State University

You may want to seek out a local business broker for guidance. via IBBB.org.

4 years ago | like reply | 0 likes

searcher from University of Pennsylvania - The Wharton School

stanford primer also has a template LOI

4 years ago | like reply | 0 likes

More on Searchfunder

Just Closed on My First Deal! Reflections and Takeaways for other Searchers

45,152 transactions are available on Searchfunder (now searchable by keyword)

Now everyone has unlimited IBISWorld access

Family office looking for traditional searchers

2 Best Ways To Find Motivated Sellers, Off-Market Deals

Investor seeking Self-Funded Search Deals

Downsides of "buying a job" below 750k+ EBITDA?

6-7x for a Self-funded Search Deal?

Searchfunder is an online community and toolkit for searchfunds. Over 80% of those involved in searchfunds maintain a Searchfunder.com account to help them network, problem solve challenges, and keep up with the industry.

We maintain partnerships with database providers that make searching more effective, efficient and affordable along with features that help searchers find deals and investors and vice versa.