Letter of Intent in an Arizona Business Sale
Eddy Roche, Associate Broker · AZ license BR579487000 · HUB AZ / Sunbelt Arizona
An LOI is where price and structure get real — and where bad exclusivity can waste months. Here's how I explain it to Arizona sellers before anyone signs away leverage.
What an LOI usually covers
An LOI is the term sheet. Price. How the deal is structured. Deposit. How long diligence lasts. What happens if financing falls through. Those are the lines I walk Arizona sellers through before anyone signs.
I am a broker. This page is education, not legal advice. Your attorney drafts the paper. I do not publish sample legal forms.
Structure is its own conversation. An asset sale and a stock sale change tax, liability, and what actually transfers. More on that is on asset vs stock sale in Arizona.
The worksheet that starts the price conversation is Value My Business.
Binding vs non-binding pieces
Most commercial terms stay open after the LOI. Price can still move. Structure can still change. Diligence findings rewrite numbers.
Some pieces can be binding. Confidentiality. Exclusivity. A deposit. A break fee. I will not tell you an LOI is always non-binding. I will not tell you it is always binding. Your counsel reads the draft in front of you and tells you which sentences lock you in.
Exclusivity risk
A long exclusive with a buyer who cannot close parks the file. Other buyers go cold. You sit. Months go by. That is the risk I flag first.
The exclusive should be short enough that a real buyer can finish diligence and a weak buyer cannot sit on the listing. Financing contingencies belong on the same page. If the buyer needs a loan they have not started, a long exclusive is a gift to them and a tax on you.
What happens after the LOI
Diligence is when the buyer rebuilds your numbers. The landlord is asked for consent. A liquor or other license transfer is mapped. Those clocks start after the framework is in place. They do not start on listing day.
Prep the package early. See due diligence for Arizona sellers.
The clocks after an LOI sit on how long a sale takes in Arizona.
How I run the rest of a listing is on Sell My Business.
Why counsel matters
I keep terms tied to market reality. I screen whether the buyer can close. Counsel drafts and advises on the paper. Those are different jobs.
If a broker hands you a form LOI and tells you to sign it tonight, get your own attorney on the phone. I do not fill in your LOI. I do not replace counsel.
I am Eddy Roche, Associate Broker, Arizona license BR579487000. The office is 4745 N 7th St, Phoenix, AZ 85014. Hours are 9AM–8PM every day including weekends. Call (480) 405-3200.
Related reading: due diligence for Arizona sellers, asset vs stock sale in Arizona, how long a sale takes in Arizona, the purchase agreement in an Arizona business sale, and closing and escrow in an Arizona business sale.
Start with a valuation
Send the basics. I look at the file and tell you how I would set price and structure before anyone writes an LOI. No sample forms. No obligation to list.
Frequently Asked Questions
What is a letter of intent in a business sale?
A document that outlines the main deal terms — often price, structure, deposit, and diligence timing — before the full purchase agreement. Some pieces may be binding; most commercial terms are often still negotiated.
Is an LOI the same as a purchase agreement?
No. The purchase agreement is the detailed contract. The LOI is usually the term sheet stage. Your attorney should tell you what is binding in your draft.
What should Arizona sellers watch for in an LOI?
Price and structure, exclusivity length, financing contingencies, and how diligence access is granted. A long exclusive with a weak buyer can park your file.
When does diligence start relative to the LOI?
Often after an LOI or similar framework, once confidentiality and access terms are set. Prep the package early — see due diligence for Arizona sellers.
Do I need a broker involved at LOI stage?
A broker helps keep terms tied to market reality and screens whether the buyer can close. Counsel drafts and advises on the paper.
How do I start?
Valuation and a process conversation at bizsalesguy.com/value-my-business or (480) 405-3200. Eddy Roche, Associate Broker BR579487000.
Talk through an LOI on your file
No obligation. I look at the numbers and call you. Across Arizona.