Should I Include a Deposit in the LOI?

When taking place in an acquisition, you will first submit an offer which is generally placed in an LOI.

An LOI will include the basic terms of the deal. The most important metrics include price, timeline to close, and details on a deposit.

There are a few factors to consider when thinking of whether you should include a deposit.

Amount: The purchase price should be a factor. A small purchase price generally doesn’t include a deposit while a large one certainly does.

Time: The length of time until close matters. If closing is soon enough, a deposit probably is not necessary.

Exclusivity: If you are expecting to be the only one to transact on the deal, place a deposit in exchange for exclusivity.

Scarcity: If the possibility of losing the deal is high, then a deposit can help secure it.

Request(s): How much are you asking of the seller?

The amount of a deposit can range between typically $5,000 up to 10% and more. The deposit is applied to the purchase price. The deposit being non-refundable or refundable depends on if you’re gaining something and how much the seller is giving up, in which case it could be non-refundable. For example, if you are asking for training prior to close and for them to reveal their secret sauce, and open up a lot of proprietary.

Let JARBLY guide you with your next acquisition purchase to help you through the process.
If you would like to hop on a call with us to go over things related to acquisitions and general business overview, please schedule a time here. We do a one hour deep dive where we go over your needs as it relates to acquisitions & business expansion, and then we go on the hunt for you to line up a business that fits.

Email – acquisitions@jarbly.com

Phone – (800) 773-1523

Leader in Business Consulting with Expertise in Representing Sellers & Buyers on Deals

Jarbly is a leader in business consulting with expertise in helping with revamped strategies, enhancing valuation, positioning for an exit, and business and real estate sales.

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Phone: (800) 773-1523
Email: support@jarbly.com

About Jarbly

JARBLY’s focus is on business consulting with an emphasis on creating disruptive ventures and high quality boutique services to enhance a business’ valuation and lead to a high quality exit. As JARBLY has been heavily involved in the digital space including its own ventures for a decade with servicing hundreds of clients around the world, it is very well versed with understanding technical aspects of a deal including value proposition, product offerings, marketing, metrics, ROI, moats, and value-add initiatives. JARBLY has the expertise and knowledge on various businesses, industries, and deals and is very creative with structure to help increase valuation, or help guide you to a strategic exit. JARBLY has helped brands grow and also cultivates business related and real estate opportunities that are ripe for acquisitions, helping buyers and sellers get what they are seeking from a deal.

Whether it comes to growing your business, including acquiring businesses you want to understand the deal. We understand deals and where the maximal value in a transaction is. Our bread and butter is to provide a win for our clients including positioning your company for an eventual high quality exit. We have the unique and uncanny ability to bring high quality materials to the table and renewed strategies that consistently work. We help with financial enhancements, implementing systems, and prepping your business with materials including Prospectuses, Confidential Information Memorandums, and high quality Value Proposition Decks.

JARBLY looks forward to working with you to enhance your business profits nad valuation and help you on your next acquisition, exit, or real estate opportunity including both commercial and high end residential properties with high end service from a qualified team of passionate individuals that help you secure the deal. JARBLY LLC is part of Trend Realty in Sarasota, FL operating the Boca division as the JARBLY team.

Jaret will hop on a quick call with you to understand your and your business.

Text or call (800) 773-1523 and Jaret can arrange to have a brief consultation with you at your business location before embarking on a series of consulting calls or a full immersion.

Should I Include a Deposit in the LOI?