What is a letter of intent?
Short answer
A letter of intent sets out the proposed price, structure and key terms before diligence. It is mostly non-binding, but once signed you usually stop talking to other buyers.
What to know
- Price is only one term; structure matters as much.
- Exclusivity often lasts 60 to 90 days.
- Terms rarely get better after signing.
What to do next
- 1Compare cash at close, not just headline price.
- 2Check the working capital target.
- 3Have an advisor review before you sign.
Last reviewed September 2026 by the Horizon team. General information, not legal, tax or financial advice.