The letter of intent feels like the finish line and is actually the starting gun: everything that makes an acquisition real, diligence, financing, legal drafting, and third-party consents, happens in the 90 to 180 days that follow.
Deals rarely die at the LOI. They die in this window, usually from momentum loss rather than any single discovery. Understanding the sequence is how buyers and sellers keep momentum.
The four parallel workstreams
From LOI signing, four tracks run simultaneously: business diligence (verifying what you are buying), financing (lender underwriting and approvals), legal (purchase agreement drafting and negotiation), and third-party consents (landlords, franchisors, key customers where required).
The slowest track sets the closing date, and the tracks feed each other: lenders wait on diligence outputs, attorneys wait on structure decisions, and consents wait on nearly everything. Managing an acquisition is mostly managing these dependencies.
Weeks 1 to 4: Open everything
- Deliver the full diligence request list to the seller
- Stand up the deal's document workspace and populate initial folders
- Submit the lender application with borrower package complete
- Engage the QoE provider and attorney; agree scope and timeline
- Identify every required consent and start the longest-lead ones
Weeks 5 to 10: Verify and draft
- QoE fieldwork and financial verification
- First draft of the purchase agreement circulated
- Lender orders valuation and processes underwriting
- Operational diligence: site visits, systems, key employees
- Negotiate working capital target and structure refinements
Weeks 11 to 16: Converge
- Final purchase agreement negotiation and disclosure schedules
- Lender commitment letter and closing conditions list
- Landlord, franchisor, and other consents executed
- Insurance bound with lender requirements met
- Closing checklist reconciled between attorneys
Why timelines slip
The recurring causes are mundane: stale interim financials that need refreshing, disclosure schedules started too late, consents requested in week twelve that needed sixty days, and document requests answered serially by a seller still running their business full time.
Sellers control more of the timeline than they realize: a seller who answers requests within days, from an organized document set, can compress the whole process by a month.
Next steps
FAQ
How long from LOI to close on a small business?
Typically 90 to 180 days. Cash deals without financing can run faster; SBA-financed deals cluster around 90 to 120 days when documents flow well.
Is an LOI binding?
The price and terms are typically non-binding, while exclusivity and confidentiality provisions usually are binding. The LOI's real power is setting expectations both sides feel committed to.
What is the most common reason deals fail after LOI?
Momentum loss compounding from small delays, followed by diligence findings that trigger retrades neither side can absorb, and financing falling through late.