How long from LOI to closing does a business sale take?

A signed letter of intent tells both sides what they are trying to reach, not when they will get there. The elapsed time from that signature to an actual closing date depends on how many conditions still need to be satisfied and how independently each one moves.

Conditions run in parallel, not in sequence

Due diligence, a lender’s underwriting, a landlord’s review of an assignment request, and a regulator’s licence transfer process can all be started around the same time, once the LOI is signed, rather than waiting for one to finish before the next begins. Because of that, the overall window is closer to the length of the single slowest item than to the combined length of every item added together.

Which condition usually sets the pace

• Buyer financing, especially when a specific lender or a federal small business financing program is involved, since underwriting has its own internal timeline
• Third-party consents, such as a landlord agreeing to assign a lease or a franchisor approving a transfer, which run on that party’s own schedule
• Regulatory or licence transfers that require an application to be reviewed by a government body or licensing authority
• Findings during due diligence that require follow-up before either side is comfortable proceeding

Exclusivity periods are set with this in mind

Most letters of intent include an exclusivity, or no-shop, period during which the seller agrees not to negotiate with other buyers, and that period is usually negotiated with a rough sense of how long the slowest expected condition will take. A period that turns out too short forces an awkward extension conversation partway through; one set with realistic slack avoids that.

What happens if a condition needs more time

When one condition genuinely needs longer than expected, an extension is usually negotiated in writing rather than the deal simply drifting past its original target date, and both sides typically want that extension formalized so the exclusivity period and any deposit terms stay clear. A closing date that keeps moving informally, without anyone documenting why, is a common source of later disputes.