When buyers and sellers negotiate a sale, it’s not uncommon for there to be some confusion on the structure of the deal and what it entails. However, this is when a Letter of Intent (LOI) would come in handy to clarify the in-depth details of negotiation. It signals the formal start of the negotiations process, where buyers and sellers collaborate to reach the most feasible deal possible.
Fippa’s embedded LOI feature is available on any listing with an asking price in excess of $25,000 and offers the option to:
- Use the wizard to build an LOI
It’s simple. Choose an offer price, nominate a due diligence period, close date and
any deal terms. You can then submit the LOI for review. Sellers then have the opportunity to accept or reject and of course the LOI will be stored and time stamped.
- Upload your own
Alternatively, upload your own LOI. This is stored as a PDF on the platform but unlike the ‘wizard’ buyers and sellers will need to download, sign and re-upload.
FAQs about Letter Of Intent (LOI)
How do I submit an LOI as a prospective buyer?
The embedded LOI feature is found via The Submit LOI button on the listing and within the Deal Room, along the right-hand side of your discussion with the seller.
As a buyer how do I complete an LOI?
While creating an LOI, you will be asked to complete the following data in step 1 then review the agreement in step 2 before submitting the LOI.
- Buyer and/or Company Name: Buyer name that will be used within the LOI contract.
- Seller's Name: Seller's name that will be used within the LOI contract.
- Asset and/or Company Name: This is the URL or company name of the asset.
- Purchase Price: The purchase price is the total value of the transaction, including assets such as inventory (if applicable). Details of the deal, like payment structure, can be defined in the "Other terms" section. As this is a letter of intent the Purchase price is the value you intend to pay accepted and you move forward with a contract of sale / asset purchase agreement (APA) .
- Execution Date: This is the proposed date by which the purchase and sale agreement will be executed at the latest.
- Due Diligence Period (Days): The period from the date of this LOI for the buying party to review the Business and the Assets with financial and operational data that the seller party shall provide.
- List of assets, inventory or post-sale support: List of items included in the sale.
- Other Terms (optional): Other offer terms including payment terms or contingent terms like financing.