Is Your Deal Really Done? What Can Still Change After the LOI

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 739 words

No. A signed letter of intent means the buyer and seller agree on the main terms, but almost nothing is final until the purchase agreement is signed and the money moves. The LOI (letter of intent) sets out price, structure and timing, and usually gives the buyer a period of exclusivity. Most of its business terms are not binding. Between that signature and closing, due diligence, financing, third-party approvals and the legal documents can all reshape the deal or end it.

Signing the LOI is still a real milestone. The two sides agree on value and structure, which is the hardest step in many deals. The work now is to confirm the facts behind that agreement and turn it into binding documents. For a buyer, this is where you confirm what you are paying for, and where many deals are lost to surprises, delays or broken trust.

What is still open after the LOI

• Due diligence. Your review of the financials, contracts, customers, employees, assets and legal exposure. What you find can support the price or challenge it.
• Financing. A lender still has to approve the loan and issue a commitment. SBA 7(a) loans, common in smaller acquisitions, bring their own paperwork. Your financing plan should start moving the day the LOI is signed.
• Third-party consents. Landlords, key customers, suppliers and licensing bodies may need to approve a change of ownership.
• The purchase agreement. Representations and warranties (the seller's formal statements about the business), indemnification, the working capital target and transition terms are negotiated here, not in the LOI.
• Time. Exclusivity runs out, and the longer a deal takes, the more chances something changes.

Where due diligence most often turns up problems

Surprises tend to cluster in the same places. Earnings that rest on add-backs the seller cannot document. Revenue concentrated in a few customers, or contracts that let customers leave on a change of ownership. Trademarks, software or customer data owned by the founder personally rather than by the company. Equipment older than the books suggest. Key employees with no agreement and no reason to stay. Unpaid sales tax, payroll problems or a pending dispute.

None of these automatically kills a deal. Each needs an answer: a fix before closing, a change in price or structure, a specific indemnity, or a decision to walk away. Keep perspective on size. A finding that trims a year's earnings slightly is a negotiating point at most; one that raises doubt about whether customers will stay is a reason to pause the whole deal.

How a buyer keeps the deal on track

Sellers and their advisors watch for late price cuts, known as retrading. It helps to understand how sellers try to prevent retrading, because a buyer who retrades without cause often loses either the deal or the seller's goodwill during the transition.

• Send a complete diligence request list early and agree on a schedule with the seller's advisor.
• Raise issues as you find them, with evidence, rather than saving them for one large renegotiation near the end.
• Separate real findings from second thoughts. Asking for a lower price over things you knew at the LOI damages trust quickly.
• Keep your attorney, CPA and lender on the same calendar, and turn document drafts around promptly.

What the seller should have ready

Deals move faster when the seller has prepared: three years of financial statements and tax returns that reconcile, a list of top customers, contracts and leases in one place, equipment lists, an employee census, and proof that the company owns the intellectual property it uses. When a seller is represented by an advisor, most of this is organized before buyers ever see the company, which shortens the period between LOI and closing.

Buyers can help too. Tell the seller's advisor early which reports your lender and CPA need, and in what format, so the seller is not collecting the same information twice. A buyer who makes diligence easy to support usually gets faster and fuller answers.

How we run the stretch from LOI to closing

When MDR & Associates represents a seller, a principal of the firm stays in the negotiation through due diligence and the legal documents, and the firm works with both sides' attorneys, CPAs and lenders. Steps eight to ten of our process cover exactly this period. If you are buying a Texas company and want to know how we work with buyers, start at our buyer page.

Where this fitsBuy a business in Texas →

Questions owners ask next

Is a letter of intent legally binding?

Usually only in part. Price, structure and most business terms are typically non-binding, while clauses on exclusivity, confidentiality and sometimes expenses are binding. The exact wording decides it, so have your transaction attorney review the LOI before you sign it rather than after.

How long does it take to get from LOI to closing?

It depends on the size of the company, the financing and how prepared the seller is. Lender approvals, third-party consents and the purchase agreement all take time. Ask the seller's advisor for a realistic schedule at the LOI stage and build your financing timeline around it.

Can a buyer walk away after signing an LOI?

Generally yes, when the deal terms are non-binding, though a deposit or expense clause may apply if the LOI includes one. Walking away should follow a real finding, not cold feet. Your reputation with sellers' advisors matters if you plan to look at other companies later.