LOI/Sale agreement time frame question

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August 06, 2020

by a searcher in Newport Coast, Newport Beach, CA, USA

For small-market transactions 5 mil and below, what is the standard time frame in completing the sales agreement by both parties once the LOI has been signed? From my experience, it was 30 days to sign and agree on sales agreement then another 30 days of DD. I appreciate your feedback.

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commentor profile
Reply by a searcher
from Vanderbilt University in St. Petersburg, FL, USA
If you aren't using debt, you may be able to pull off 30 days from LOI to closing depending on the complexity of the business (which includes all diligence and finalizing the purchase agreement). But I'd give yourself at least 60 days as things tend to come up during diligence - and negotiating the terms of the purchase agreement is a legally intensive process (sellers counsel may not be willing/able to move as quickly as you'd like) . Best of luck!
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Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA
If the vast majority of due diligence items are ready to go, and also pending lender backlog/availability and how quickly the lender's application can be submitted: 45-60 days without real estate, 60-75 with real estate. Due diligence and working on the APA can go on simultaneously.
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