LOI vs APA

by a searcher from Southern Methodist University

4 months ago

I'm looking at a business in Florida and the broker has pushed for using an Asset Purchase Agreement rather than a Letter of Intent. Are there any key differences to be aware of? Is an APA more advantageous to a seller?

1 like
159 views
15 comments

searcher from Southern Methodist University

Thank you all for your responses! All super helpful. My general takeaway is to start with the LOI and negotiate the APA later on as it can be more detailed and you need DD to really work through accurately. Also, while APA might not be binding, it is more binding (I’m not a lawyer, so this is laymen’s terms) than an LOI.

3 months ago | like reply | 0 likes

searcher from Southern Methodist University

Thank you both!

3 months 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

Examples of self-funded searcher websites

What are market terms for Seller Notes?

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

Sorry, but you are a broker's worst nightmare ... and how to fix it

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.