What happens after you sign a letter of intent?

Who does what after the LOI?

• You. Run diligence, coordinate everyone, decide on problems, and plan the first 90 days of ownership.
• The lender. Underwrites the loan, orders the independent business valuation, commissions a quality of earnings report if the business price is $3 million or more, and issues a commitment.
• Your lawyer. Legal diligence, the purchase agreement, the seller note, transition and non-compete agreements, and closing documents.
• Your CPA or QoE provider. Tests the earnings, add-backs and working capital.
• The seller and broker. Provide documents and access. The broker usually manages the process on the seller's side.
• Third parties. The landlord, licensing agencies, key customers or suppliers whose consent is needed.

Week by week: a 90-day SBA timeline

Use this as a plan, not a promise. Your lender and the seller's speed will move it.

1. Week 1. Engage your lawyer and CPA. Send the full document request to the seller. Submit the signed LOI and your personal financial package to the lender. Confirm your injection funds are seasoned about 30 days or documented as to source.
2. Week 2. Test the cheap deal-killers: tax returns against the P&L, a proof of cash from bank statements, the lease, licenses, customer concentration, and lien and litigation searches. Ask the landlord's position on assignment.
3. Weeks 3 to 4. If week 2 is clean, start the QoE or accounting review. The lender begins underwriting and orders the valuation. Your lawyer starts the purchase agreement.
4. Weeks 5 to 6. Operational diligence: equipment, employees, systems, vendors. Review QoE findings. Decide whether any finding changes price or terms, and raise it with the seller right away.
5. Weeks 7 to 8. The valuation and QoE are in. The lender completes underwriting and seeks credit approval. Negotiate the purchase agreement. With the seller's agreement, meet key employees.
6. Weeks 9 to 10. Lender commitment issued. Landlord consent or new lease signed. License transfers filed. Insurance quotes, bank accounts and payroll set up for the buyer entity.
7. Weeks 11 to 12. Final purchase agreement and closing documents. Updated monthly financials from the seller to confirm no material change. Closing and funding.

What usually causes delays?

• Slow documents from the seller. A common cause, and the easiest to prevent. Set a date for the full document set in the LOI.
• The landlord. Landlords have no deadline. Start in week 2.
• The valuation or QoE. Both take time, and a low result restarts the price discussion.
• Licenses and permits. Some agencies take weeks to process a transfer.
• Your own file. Missing personal tax returns, unseasoned injection funds, or eligibility questions. Since March 1, 2026, SBA loans are available only to businesses owned by U.S. citizens or U.S. nationals with a U.S. principal residence.
• Franchises. The franchise must be on the current SBA Franchise Directory, and the franchisor must approve the transfer.

What if exclusivity runs out before closing?

Exclusivity and closing timelines often do not match. Worked example:

1. Your LOI has 60 days of exclusivity. Your lender expects closing at day 90.
2. From day 61 to day 90, the seller is free to talk to other buyers: 30 days without protection.
3. Ask for an extension around day 45, before the deadline is close. Tie it to a specific item, such as "the lender's valuation is due on day 55."
4. A better fix is in the LOI itself: an automatic extension while the lender is processing the loan, so the gap never opens.

What should you prepare besides diligence?

Buyers who spend all of the LOI period on diligence arrive at closing with no plan for day one. Use the waiting time.

• A transition plan with the seller: which tasks and relationships move to you, and when. SBA rules allow the seller to stay up to 24 months in total.
• An employee announcement plan: what you will say, and who hears it first.
• Banking, payroll, insurance and software accounts in the buyer entity's name.
• A first-90-days plan. See the first 90 days after buying a business.
• If you plan more acquisitions, monthly reporting and books an auditor can work with from the first month.

Where these numbers come from: LOI-to-close, diligence and exclusivity periods from BizBuySell's SBA loan timeline and Big Ideas DB on letters of intent. SBA valuation, QoE, injection seasoning, seller-transition and franchise rules from this guide to SBA SOP 50 10 8.1. Citizenship rule from Cantrell Firm. Broker commissions from Investors Club. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026; lender practice under it is still settling and these are secondary summaries, so confirm current terms with your SBA lender.

Related questions

When do employees find out about the sale?

Usually close to or at closing, with key employees told earlier and with the seller's agreement. Plan the timing with the seller in the first weeks.

When is the purchase agreement signed?

Often near the end, once diligence and the lender's approval are in hand. Some deals sign earlier with closing conditions. Your lawyer will advise which fits.

Can I walk away during diligence?

Under a typical LOI with non-binding deal terms, yes. You remain bound by sections such as confidentiality. Confirm with your lawyer.

Who pays the seller's broker?

The seller, usually from the proceeds at closing. Main Street commissions typically run 10% to 12% on deals under $1 million.

What comes next

Some sellers sign an LOI only after choosing among several buyers. The next question is how you compete when other buyers want the same business.

Related articles

• What should a letter of intent to buy a business include?
• Is a letter of intent binding?
• What is on a due diligence checklist for buying a small business?
• How long does an SBA acquisition loan take to close?
• What has to be done before closing day?

Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.