The Letter of Intent is the document that turns a negotiation into a deal. Here's exactly what to put in it, what to leave out, and how to make it competitive.
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A Letter of Intent (LOI) is the document that starts the formal acquisition process. It's not a final contract — it's a non-binding (mostly) statement of terms that, once accepted by the seller, kicks off the due diligence period and locks out competing buyers. Getting it right determines whether you get the deal or lose it to a buyer who submitted a cleaner, more confident offer.
Most first-time buyers write LOIs that are too vague, too conditional, or too long. Sellers — especially those working with experienced brokers — can read an LOI in 90 seconds and know whether the buyer is serious. This guide covers what a strong LOI looks like, what each section should contain, and includes a working template you can adapt for your own deals.
An LOI (sometimes called a Term Sheet or Letter of Offer) is a written summary of the proposed deal terms. It is typically non-binding on the substance of the deal — meaning neither party is legally obligated to complete the transaction on those terms. However, LOIs often contain two provisions that ARE binding: an exclusivity clause and a confidentiality clause.
The exclusivity clause prevents the seller from negotiating with other buyers during the due diligence period — typically 30 to 60 days. This is the key protection for buyers: you want to know that the seller isn't running a parallel negotiation with someone else while you're spending money and time on due diligence. Never waive exclusivity.
The confidentiality clause protects information shared during due diligence — financials, customer lists, technical details — from being used or disclosed outside the transaction context. Even though the full deal is non-binding, these two provisions typically have legal teeth.
A well-structured LOI for an online business acquisition covers eight core elements. Each one needs to be specific enough to demonstrate seriousness, but not so detailed that you're negotiating every clause at the LOI stage (that's what the Purchase Agreement is for).
State the total consideration and how it's structured. Break out the cash at closing, any seller financing, and any earnout component. Be specific: "$340,000 total consideration, comprised of $250,000 cash at closing, $70,000 seller note at 6% interest over 24 months, and $20,000 holdback released 90 days post-closing contingent on MRR being at least 90% of the stated figure."
Define what you're buying. For a content site: domain, hosting account, content, email list, affiliate accounts, social media accounts, Google Analytics property, Google Search Console access. For SaaS: source code, customer database, domain, brand assets, third-party integrations and API keys. For FBA: inventory at cost, Amazon Seller Central account (via entity transfer or direct transfer as permitted), trademark, Brand Registry enrollment, supplier relationships.
Specify what the seller keeps. Typically: the seller's personal accounts (bank accounts, other business accounts, personal email), any business lines not part of the deal, cash in the company bank account as of closing date.
How long will the seller provide support? For most online businesses, 30 to 90 days of transition support at a reasonable number of hours per week (typically 5 to 10 hours per week). Specify whether this is paid or unpaid. For complex businesses (SaaS with enterprise customers, multi-channel operations), longer transition periods and paid consulting arrangements are common.
State the length of the due diligence period (typically 14 to 30 days for smaller deals, 30 to 60 days for larger ones) and the exclusivity requirement — the seller agrees not to market the business or negotiate with other buyers during this period. This is the most important protection in the LOI.
These are the buyer's "outs" — the conditions that must be satisfied before you're obligated to close. Standard conditions: satisfactory completion of financial, technical, and legal due diligence; seller representations and warranties being accurate; all required consents and approvals obtained (including account transfer approvals from platforms like Amazon or Stripe); and financing contingency if applicable.
The seller agrees not to start or work for a competing business for a defined period (typically 2 to 3 years) and not to solicit your customers or key employees/contractors. This is standard and almost universally accepted by sellers. State the geographic and industry scope clearly.
Target closing date — typically 45 to 90 days from LOI acceptance, depending on deal complexity and financing structure. Also specify the escrow service you intend to use (Escrow.com, Empire Flippers' escrow, or a lawyer-held escrow).
LOIs that try to resolve every possible issue upfront often kill deals before they start. Leave these for the Purchase Agreement:
The LOI is a framework, not a contract. Its job is to align on the big picture and start the clock on exclusivity. Over-engineering the LOI signals that you don't know how deal processes work, and it slows down the seller's decision to accept.
On well-run listings from Empire Flippers or Quiet Light, brokers sometimes receive multiple LOIs within days of a listing going live. Here's how to make yours stand out without inflating the price:
Attach a bank statement or brokerage account screenshot (with specific balance amounts redacted if preferred) showing you have the liquidity to close. Sellers who receive LOIs without proof of funds often deprioritize them — they've been burned by buyers who couldn't close. A one-sentence verification from your bank or financial advisor works equally well.
Offering a 21-day due diligence period instead of 45 days signals experience and confidence. You're not a first-timer who needs months to understand the business. A shorter DD period is more attractive to sellers because it gets them to closing faster. Only offer what you can actually execute — don't commit to 21 days if you need 45.
Every condition to closing is a potential deal-killer from the seller's perspective. Keep your conditions to the essential three: satisfactory due diligence, accurate representations, and successful account transfer. Don't add conditions that suggest you haven't done basic research — like requiring the business to maintain a specific revenue level during due diligence unless there's a specific reason to.
A one-paragraph section at the opening of the LOI explaining why you want this specific business — and what you plan to do with it — is worth including. Sellers, especially founders, care that their business goes to someone who will continue to grow it. "I plan to maintain the existing content strategy while expanding into affiliate partnerships in adjacent product categories" is more compelling than a generic acquisition offer.
The LOI is not the place for an opening lowball. If a business is priced at $400,000 and your maximum is $340,000, present $340,000 with a clear rationale — not $280,000 hoping to negotiate up. LOIs that open too far below asking price get rejected without counter, especially on brokered deals where the seller has already set price expectations with professional guidance.
Once the seller countersigns your LOI, the clock starts on the exclusivity period. Your first move: send the seller a detailed due diligence request list within 24 hours. A well-prepared DD request list signals that you know what you're doing and will move efficiently. The seller's willingness to provide information quickly — or reluctantly — is itself a data point about how smoothly the transaction will go.
Use the exclusivity period to complete your full review: financial verification, technical assessment, customer analysis, and legal review. At the end of due diligence, you'll either proceed to a definitive Purchase Agreement or exercise your right to terminate based on what you found. The LOI is the beginning of the process, not the end.
Find the right deal to submit your first LOI on at dealalertai.com — the platform tracks hundreds of active listings across Empire Flippers, Quiet Light, Acquire.com, and more, updated daily.