A Letter of Intent (LOI) — sometimes called a Term Sheet or Offer to Purchase — is a non-binding document that outlines the proposed key terms of a business sale before the parties invest in full legal documentation and due diligence. Signing an LOI typically triggers an exclusivity period during which the seller stops marketing the business to other buyers while the agreed buyer conducts due diligence.
What an LOI Covers
Key terms in a business sale LOI include: the proposed purchase price and structure (cash at closing vs. seller note vs. earnout), asset vs. stock sale election, inventory handling and working capital requirements, exclusivity period length (typically 60–90 days), contingencies (financing, due diligence approval), expected closing timeline, and any key deal conditions (lease assignment, employee retention requirements, seller transition period).
LOI Negotiation Strategy
The LOI is the most important negotiation in any business sale because it sets the framework for everything that follows. Sellers who accept weak LOI terms believing they can renegotiate during due diligence are almost always disappointed — buyers with exclusivity have more leverage than buyers competing for attention. Negotiate the LOI terms as carefully as you would the final purchase agreement.
Not every term in an LOI is binding, but exclusivity and confidentiality provisions typically are. Read the exclusivity section carefully — it defines how long you cannot talk to other buyers and what conditions allow you to re-engage the market if the buyer fails to perform.
Recast Seller’s Discretionary Earnings, then apply a planning multiple for this Illinois business. Replacement labor is subtracted. This is a planning tool, not an appraisal.
Before debt, working-capital peg, holdback, and tax. Educational only.
What this Illinois guide is for
What Is a Letter of Intent in Business Sales? is a working answer for owners and buyers. We will not invent a statewide average sale price. We will show the earnings math, the Illinois clocks that delay a close, and the questions a serious counterparty will ask.
Marketplace context from BizBuySell’s Q2 2026 Insight Report (median reported sale $349,250, 2.7× cash-flow multiple, 14% of owners with a professional valuation) is context — not your quote.
Illinois diligence that is not optional
Three years of tax returns, bank statements that match the P&L, the lease, licenses, customer concentration, and any environmental file belong in the first data room. See the buy-side checklist.
Documents to gather this week
- Three years of signed business tax returns and matching P&Ls
- Year-to-date P&L, balance sheet, and three months of bank statements
- Current lease, amendments, and a plain-English remaining term
- License and permit list, including who holds each card
- Top-customer concentration (names redacted until an NDA)
A simple Illinois close calendar
Plan six to twelve months from cleanup to close on a prepared Main Street deal. Start CBS-1 and any Chicago or Cook notices at letter-of-intent, not the week of funding. Landlord consent often takes longer than the lender.
Related pages on this site
Educational only — not legal, tax, or a formal appraisal. Confirm bulk-sale notices, licenses, and tax allocation with counsel and a CPA.
Questions
No. This is education and planning math. A professional opinion of value is a confidential conversation. We work on a success fee if you engage a sale process. There is no file-upload portal.
Start with adjusted seller’s discretionary earnings, then a vertical planning band. A marketplace average is context, not your quote.
Personal professional licenses do not transfer. Municipal registrations and state notices have their own calendars. Confirm the path before you grant exclusivity.
Most prepared Main Street sales take about six to twelve months from cleanup to close. License transfers, landlord consent, and SBA underwriting add weeks.
CBS-1 is the Illinois bulk-sale notice. File it at least ten business days before an asset transfer that meets the statute. Late filing can put Illinois tax risk on the buyer.