From LOI to Close: What Actually Happens After You Accept an Offer
Photo by Medienstürmer
Signing a letter of intent feels like the moment you have been working toward. The number is agreed on, both parties are aligned, and there is a signed document to prove it. Most first-time sellers exhale for the first time in months.
Then the due diligence request list shows up.
The stretch between a signed LOI and closing day is where deals live or die, and it is the part of the process that catches sellers most off guard. The LOI is mile 18, not the finish line. The next 60 to 90 days require just as much focus as everything that came before — and a different kind of focus, because the risks are different and the leverage has shifted.
Understanding what is coming, in what order, and where deals typically fall apart gives you a real advantage in a phase where most sellers are just trying to keep up. For context on how buyers evaluated your business to arrive at the number in that LOI, our breakdown of what buyers look for and how your SDE was calculated are worth having in your back pocket going into this phase.
Three tracks run simultaneously from the moment the LOI is signed. Here is what each one looks like across the typical 60 to 90 day window.
Signed
Done
Approved
Timeline reflects a typical 60 to 90 day Main Street transaction. SBA financing timelines vary by lender. Deals with complex lease assignments or undisclosed issues may run longer.
What Is an LOI and What Does Signing One Actually Mean?
A letter of intent is a non-binding document that outlines the agreed terms of a proposed transaction. Purchase price, deal structure, exclusivity period, target closing date…it’s all in there. It signals that both parties are aligned in principle and ready to move into the formal stages of the deal. Getting one signed is a genuinely big deal. It is just not the final deal.
The part that surprises most first-time sellers is what non-binding actually means in practice. The price and terms in the LOI are a starting point, not a guarantee. Due diligence can move them. A buyer who finds something unexpected in your financials has grounds to renegotiate.
No need to panic yet, it’s simply a reason to arrive at this stage with clean books and documented add-backs, which you have already been building toward.
Two provisions in the LOI are binding the moment you sign. Confidentiality means neither party can disclose the deal to outside parties. Exclusivity means you agree to stop marketing the business and negotiate only with this buyer for a set period, typically 30 to 60 days. That window is important to understand because it gives a buyer full access to your financials and operations while you are off the market.
Before you sign, read the exclusivity clause carefully with your attorney. The length of the window, what happens if the buyer misses milestones, and whether it can be extended are all worth nailing down before you hand over access.
How Long Does It Take to Close After an LOI?
For most Main Street business sales, the honest answer is 60 to 90 days. That is the realistic window from a signed LOI to closing day when everything moves smoothly: due diligence wraps on time, financing comes together, attorneys stay on schedule, and no surprises surface along the way.
The operative phrase there is when everything moves smoothly. Deals that stretch past 90 days almost always do so for predictable reasons. SBA financing adds underwriting time that can run 60 to 90 days on its own, which is why buyers using SBA loans need to engage their lender the moment the LOI is signed. Lease assignments that require landlord approval can stall if the landlord is slow to respond. Due diligence that surfaces unexpected issues adds negotiation time while both sides figure out how to handle them.
The timeline also depends heavily on how prepared the seller is going in. A seller who walks into due diligence with a complete data room, three years of clean financials, and a documented add-back schedule moves through the process significantly faster than one who is pulling documents together reactively. The preparation you did before the LOI is what determines the pace after it.
One thing worth knowing going in: deals that drag past 120 days have a meaningfully lower close rate. Momentum matters in a transaction. Both parties get fatigued, financing conditions can shift, and the longer a deal stays open the more opportunities there are for something to go sideways. Moving with urgency from day one is one of the most reliable ways to actually get to the closing table.
What Happens Immediately After the LOI Is Signed?
The 48 hours after a signed LOI are the busiest of the entire transaction. Three things kick off simultaneously, and the sellers who understand this going in are significantly less overwhelmed than the ones who thought the hard part was behind them.
Due diligence opens. The buyer sends a document request list and your job becomes responding to it quickly, completely, and without gaps. If you have been building your data room in advance (which our guide to preparing your financials for due diligence covers in detail) this step is organized and manageable. If you have not, this is the moment that becomes stressful in a hurry.
SBA financing kicks off on the buyer's side. If your buyer is using an SBA loan, their lender begins the underwriting process the moment the LOI is signed. That process runs parallel to due diligence and takes 60 to 90 days on its own. The buyer needs to be moving fast with their lender from day one. As a seller, understanding this timeline helps you know why the buyer may be pushing for documents quickly — their lender needs them too.
Attorneys engage on both sides. The purchase agreement negotiation begins, which is the document that actually binds the transaction. Your attorney and the buyer's attorney will negotiate the terms, representations, warranties, and closing conditions over the next several weeks. This process runs simultaneously with due diligence and financing, which is why the 60 to 90 day timeline requires all three tracks moving at once.
The sellers who get to closing fastest treat the LOI as a starting gun, not a finish line. The deal is in motion. The goal now is to keep it moving.
What Is Retrading and How Do You Protect Yourself?
Retrading is when a buyer uses the due diligence period to renegotiate the terms of the deal after the LOI is signed. The price comes down, new conditions get added, or the deal structure shifts in the buyer's favor. It is one of the least discussed and most important risks a first-time seller faces in this phase.
It happens more than most people talk about. A buyer submits a strong offer to win exclusivity, then uses the access that comes with due diligence to find reasons to revisit the number. Sometimes the issue they surface is legitimate — a genuine problem in the financials that changes the picture. Sometimes it is a negotiating tactic. The two can be difficult to tell apart in the moment, which is exactly why having an experienced advisor in your corner during this phase matters.
The best protection against retrading is the same preparation that makes due diligence go smoothly in the first place. A seller who arrives at the LOI stage with clean, reconciled financials, documented add-backs, and no undisclosed issues gives a buyer very little to work with. Retrading almost always finds its footing in gaps, inconsistencies, or surprises. Remove those and you remove most of the leverage a buyer needs to make the conversation.
A few other things worth knowing going in. Understand what your walk-away terms are before due diligence starts, not during it. Decisions made under pressure in the middle of a transaction rarely reflect what you actually wanted. Know the floor on price, know which deal terms matter most to you, and make those decisions clearly before a buyer is asking you to reconsider them at a moment that feels urgent.
If a buyer does come back with a retrade, the response depends entirely on whether the issue they surfaced is real. A legitimate finding deserves a real conversation. A manufactured one deserves a counteroffer or a walk. Your advisor should help you tell the difference.
What Should a Seller Be Doing During Due Diligence?
Most sellers treat due diligence as something that happens to them — a period of waiting, responding to document requests, and hoping the buyer does not find anything uncomfortable. The sellers who close at strong multiples stay active, organized, and focused on the one thing a buyer is watching more closely than any document in the data room: whether the business is still performing.
Keep the business running at full strength
This sounds obvious until you are three weeks into due diligence, fielding daily document requests, attending advisor calls, and trying to manage a business at the same time.
Revenue that softens during the due diligence period gives a buyer a live, real-time reason to revisit the price. The trailing performance of the business during this window matters. Treat it like your most important quarter.
Respond to document requests quickly and completely
Slow or incomplete responses stall the process and signal disorganization to a buyer who is actively forming opinions about how well-run your business is.
Every gap in a document response is a question that gets added to the follow-up list. The goal is to make due diligence feel like a formality, not an investigation.
Keep your key employees and key clients stable
A buyer is underwriting the future of the business, and both your team and your client relationships are part of that picture. If a key employee leaves during due diligence or a major client relationship shows signs of strain, a buyer will notice.
Stay close to both during this period without disclosing the transaction to people who do not need to know about it yet.
Stay close to your advisor and your attorney
Due diligence is when details that seemed minor during the LOI negotiation start to matter.
Your attorney is negotiating the purchase agreement in parallel with everything else happening.
Decisions you make during this period (about representations, warranties, and closing conditions) have real consequences. Stay in the loop and respond to your advisors quickly.
Do not make major operational changes
A buyer is acquiring the business they evaluated. New hires, restructured pricing, changed vendor relationships, or operational pivots mid-transaction create uncertainty.
Unless something is genuinely urgent, this is not the time to make moves that change the picture a buyer is working from.
What Happens in the Final 30 Days Before Close?
The final 30 days are where the transaction shifts from review to execution. Due diligence is wrapping up, the purchase agreement is in its final stages of negotiation, and the closing date is on the calendar.
This stretch feels faster than everything that came before it, and it requires more attention to detail, not less.
The purchase agreement gets finalized
This is the document that actually transfers ownership of your business and it is significantly more detailed than the LOI.
Your attorney will negotiate representations and warranties, indemnification clauses, non-compete terms, and closing conditions with the buyer's counsel.
Read it carefully.
The representations you make in this document have legal consequences after closing, and the indemnification terms determine your exposure if something goes wrong post-sale.
Lender approval comes through
If the buyer is using SBA financing, the final loan approval lands in this window. Until that approval is confirmed, the deal is not closed regardless of what the calendar says.
Stay in communication with your advisor about where the financing stands and flag any delays early — a financing hiccup in the final 30 days is one of the most common reasons closing dates slip.
Lease and contract assignments get confirmed
If your business operates out of a commercial space, the landlord needs to approve the lease assignment before closing can happen. Key vendor and customer contracts that require consent to transfer also need to be confirmed during this period.
Your attorney tracks these, but as the seller you should know where each one stands and follow up if anything is moving slowly.
A final walkthrough or operational handoff gets scheduled
Buyers typically want a structured transition period, and the terms of that handoff are formalized now if they were not already in the purchase agreement.
How long you stay involved post-close, what you are responsible for during the transition, and how knowledge transfer happens are all worth having documented clearly before you get to the closing table.
Closing documents are prepared and circulated
Expect to sign 20 to 50 documents on closing day, covering everything from the bill of sale to the assignment and assumption agreements to your non-compete.
Your attorney should walk you through each one before closing day so nothing on the actual day is a surprise.
What Can Kill a Deal Between LOI and Close?
Most deals that fall apart between LOI and close do not collapse all at once. They unravel gradually…one issue surfaces, confidence wavers, and the momentum that felt so strong on the day the LOI was signed starts to slow.
Knowing what actually kills deals in this phase is the best way to make sure yours is not one of them.
Most deals that fall apart between LOI and close do so for predictable reasons. Here is what to watch for and how to protect yourself.
Most of these risks are manageable with the right preparation and the right advisors in your corner before the LOI is signed.
Financing falls through
This is the most common deal killer at the Main Street level, particularly in SBA transactions.
A buyer's financing can fall through for reasons that have nothing to do with your business — a lender condition that cannot be met, an appraisal that comes in below the purchase price, or a change in the buyer's personal financial profile during underwriting. There is limited control on the seller's side here, but understanding early in the process how the buyer is financing the deal gives you a clearer picture of the risk you are carrying.
Business performance drops during due diligence
A buyer is not simply reviewing historical financials. They are watching what the business does while they own the right to buy it. Revenue that softens, a key client that goes quiet, or an employee departure during due diligence all give a buyer real-time evidence that the business they evaluated is changing.
Keeping the business performing during this period is one of the highest-leverage things a seller can do.
Something undisclosed surfaces in due diligence
An outstanding tax lien, a vendor contract that is not assignable, a client relationship that is more fragile than the financials suggested — any of these can stop a deal or reprice it significantly.
The best version of this scenario is one where the seller surfaces the issue proactively and presents a solution alongside it. A buyer who discovers something on their own has less confidence in everything else they have been told.
The purchase agreement negotiation breaks down
The LOI captures the major terms of the deal. The purchase agreement captures everything else, and the gap between the two is where negotiations can get contentious. Representations and warranties, indemnification caps, non-compete scope, and escrow terms are all live issues in the final stretch.
Good attorneys on both sides who have done this before make a real difference here. Attorneys who are unfamiliar with small business transactions can slow the process and create friction that derails deals that should have closed.
The deal simply runs out of momentum
Transactions that drag past 90 to 120 days face a different kind of risk.
Buyer fatigue sets in. The seller starts mentally moving on. External circumstances shift.
A deal that felt inevitable in week two can feel uncertain by week fourteen. Moving with urgency from the moment the LOI is signed is critical. This involves responding quickly, staying organized, and keeping all three tracks of the process moving simultaneously. This is the most reliable way to keep a deal alive through to close.
Getting to the Closing Table Is a Team Sport
The sellers who close successfully are not the ones who got lucky with a clean process. They are the ones who showed up to the LOI stage prepared, stayed focused on their business while due diligence ran its course, and had the right people in their corner when things got complicated…because something always gets complicated.
The good news is that none of what makes this phase hard is unpredictable. Due diligence asks for documents you can have ready. The purchase agreement negotiates terms you can understand. The risks that kill deals are the ones you can see coming if you know what to look for. Preparation does not eliminate the complexity of a transaction — it just means you are never the one slowing it down or handing leverage to the other side.
If you are approaching an LOI or trying to understand what comes next, our team works with sellers across the Carolinas at every stage of the process, from getting financials ready to navigating the final stretch before close.
Frequently Asked Questions
What happens after a letter of intent is signed?
The 48 hours after a signed LOI are the busiest of the transaction. Due diligence opens and the buyer sends a document request list. SBA financing kicks off on the buyer's side if they are using a loan. Attorneys engage on both sides and begin negotiating the purchase agreement.
All three tracks run simultaneously, which is why the 60 to 90 day timeline requires consistent forward movement from day one.
How long does it take to close a business sale after an LOI?
For most Main Street business sales, the realistic window is 60 to 90 days from a signed LOI to closing day. Deals that use SBA financing, require landlord approval for lease assignments, or surface unexpected issues in due diligence can run longer.
Sellers who arrive at the LOI stage with organized financials and a complete data room move through the process significantly faster than those pulling documents together reactively.
Is a letter of intent binding?
Most of the terms in an LOI are non-binding, including the purchase price and deal structure. The two provisions that are typically binding from the moment of signing are confidentiality and exclusivity. Confidentiality prevents either party from disclosing the deal to outside parties.
Exclusivity prevents the seller from marketing the business or negotiating with other buyers for a defined period, usually 30 to 60 days.
What is retrading in a business sale?
Retrading is when a buyer uses the due diligence period to renegotiate the terms of the deal after the LOI is signed. It can take the form of a lower price, new conditions, or a changed deal structure.
The best protection against retrading is arriving at the LOI stage with clean financials, documented add-backs, and no undisclosed issues — which gives a buyer very little to work with when looking for grounds to revisit the terms.
What should a seller do during due diligence?
Sellers should focus on three things during due diligence.
First, keep the business performing. Revenue that softens during this period gives a buyer real-time grounds to revisit the price.
Second, respond to document requests quickly and completely — slow responses stall the process and signal disorganization.
Third, keep key employees and clients stable. A buyer is underwriting the future of the business, and changes to the team or client base during due diligence affect their confidence in what they are acquiring.
What kills deals between LOI and close?
The most common deal killers in this phase are financing falling through on the buyer's side, business performance dropping during due diligence, something undisclosed surfacing during the review process, the purchase agreement negotiation breaking down over representations and warranties, and deals simply running out of momentum when the process drags past 90 to 120 days.
Most of these risks are manageable with the right preparation and the right advisors.
What documents get signed at closing?
Closing involves signing a significant number of documents — typically anywhere from 20 to 50 depending on the complexity of the transaction. These include the purchase agreement, bill of sale, assignment and assumption agreements, non-compete agreement, and any lender documents if SBA financing is involved.
Your attorney should walk you through each document before closing day so nothing on the actual day comes as a surprise.
What is a non-compete agreement in a business sale?
A non-compete agreement is a document signed at closing in which the seller agrees not to open or operate a competing business within a defined geographic area for a specified period of time. The scope, duration, and geographic boundaries of the non-compete are negotiated as part of the purchase agreement.
For most Main Street transactions, non-compete terms run two to five years and cover the local market where the business operates.
