Can a Seller Have Multiple LOI Offers?
- 10X Business Broker Mergers & Acquisitions
- 20 hours ago
- 2 min read
Yes, they can. In fact, this is generally the goal of a skilled business broker.
Having multiple Letters of Intent (LOIs) on the table simultaneously is the best scenario for a seller. It creates competition, which drives up the price and improves the terms of the deal.
Here is how that scenario usually plays out:
How It Happens
* Structured Marketing: The broker markets the business to multiple qualified buyers at once.
* The Deadline: The broker sets a specific date for submission of offers to create urgency.
* Negotiation: The broker manages the interest to ensure the offers come in around the
The Broker's Role
The broker's job is to leverage these competing offers to get the highest value and the best fit for your business, while keeping the process confidential and moving quickly.
This information is based on standard industry practices for business brokers and M&A (Mergers and Acquisitions) advisors.
To give you the most accurate context, these insights come from a combination of:
* Transactional Knowledge: General principles used in small-to-mid-sized business sales to maximize seller value.
* Professional Standards: Guidelines set by organizations like the International Business Brokers Association (IBBA) regarding confidentiality and fairness to buyers.
* Best Practices for Competitive Bidding: Strategies for managing multiple parties simultaneously to create a "bidding war" environment.
The Dynamics of Multiple LOIs
While it is normal for a broker to receive multiple offers, managing them requires skill. Here is the nuanced reality of how brokers handle this:
* Indication of Interest (IOI) vs. LOI: Early on, brokers may have 3-4 Indications of Interest (rough numbers). As due diligence progresses, they focus on narrowing that down to 1-2 serious Letters of Intent (detailed, binding terms).
* The Exclusivity Trap: Almost all LOIs will request a period of "exclusivity" (usually 30–90 days). If the seller signs one LOI with exclusivity, they cannot legally negotiate with other buyers for that period.
* Broker Strategy: A skilled broker will hold off on signing any exclusivity agreement until they have forced the top 2 buyers to submit their "best and final" offers based on the same information. And/or a broker will require earnest money to demonstrate their seriousness.
Key Considerations: Exclusivity Clauses, some LOIs contain a "no-shop" clause that prohibits negotiating with other buyers.
WE (10X BUSINESS BROKER M&A) DO NOT DO EXCLUSIVE LOI’S
50% OF DEALS FAIL BECAUSE OF FINANCING!
Source: MBBA, IBBA, M&A Association
The #1 Reason Business Owners Do Not Sell Their Business is that they say:
"They Will Work Till They Die!"
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