How long is the exclusivity period in an LOI?

It matters because it takes your business off the market for as long as you sign. During the period, a no-shop clause bars you, your advisor, and your employees from soliciting, negotiating with, or sending information to any other buyer.

If the buyer walks on day 80, you restart marketing with a company that has been dark for months. Every other buyer you spoke to has moved on to other deals. That cost is the price of exclusivity, and the buyer's promise to close is what you get in return.

Price and structure in an LOI are generally nonbinding, but the exclusivity clause is written to be binding. Read the clause for three things: who it restricts, what conduct it prohibits, and the date it ends. The binding versus nonbinding split in an LOI is covered separately. Your attorney will check that the end date is a calendar date and not a vague event such as completion of diligence.

It should run long enough to cover the lender's work, and Munera's sellers page puts LOI to close at 60 to 90 days, depending on financing and diligence. Several steps in that window are outside the buyer's control, which is why a clock that is too short produces extension requests you did not plan for.

• Independent valuation. Under SBA SOP 50 10 8.1, when the business purchase price is above $350,000, the lender must obtain a valuation from a Qualified Source, requested by and prepared for the lender. A valuation prepared for you or the buyer does not count.
• Debt capped at the valuation. Total acquisition debt cannot exceed that valuation. If the appraisal lands below your price, the gap must come from buyer equity or debt on full standby. That conversation happens inside your exclusivity window.
• Quality of earnings. At a business purchase price of $3,000,000 or more on an Initial Acquisition, the lender requires a QoE report with a cash proof, and it cannot be prepared by or for you. Read what a quality of earnings report covers before the buyer orders one.
• Coverage test. The SBA requires 1.25x debt service coverage on historical results, the last fiscal year or a two-year average. Projections cannot be used to meet it, so a weak last year cannot be fixed with a forecast.

Decision for you: offer the 60-day end of the window as the initial period, with extension toward 90 days available only on the milestones in the next section. A buyer paying cash and not using a lender has no appraisal or lender QoE to wait on, so ask that buyer why the clock needs to be long.

Tie the clock to buyer milestones, not only to the calendar. A buyer who holds exclusivity with no deliverables due can sit on your company while financing stalls.

• Written extensions only. Strike any automatic renewal. An extension should require your signature.
• Milestones for extension. Grant it only after the buyer delivers a lender term sheet, proof of the cash injection, and a diligence request list you have already answered.
• A price-reset exit. If the buyer cuts the price or changes the structure materially after diligence starts, you may resume talking to other buyers. Without this right, the exclusivity clause is the buyer's leverage in a retrade.
• A clock that does not pause. The period runs from the LOI signing date. It should not stop while the buyer waits on its own lender or its own documents.
• Cost for a long window. A buyer who wants more time can offer a good-faith deposit or agree to reimburse your costs if it walks without cause.

These terms sit alongside price, working capital, and structure. The letter of intent guide covers the full term sheet, and the diligence answer shows what the buyer will request during the window so you can have it ready on day one.