When taking place in an acquisition, you will first submit an offer which is generally placed in an LOI.<\/p>\n
An LOI will include the basic terms of the deal. The most important metrics include price, timeline to close, and details on a deposit.<\/p>\n
There are a few factors to consider when thinking of whether you should include a deposit.<\/p>\n
Amount: The purchase price should be a factor. A small purchase price generally doesn\u2019t include a deposit while a large one certainly does.<\/p>\n
Time: The length of time until close matters. If closing is soon enough, a deposit probably is not necessary.<\/p>\n
Exclusivity: If you are expecting to be the only one to transact on the deal, place a deposit in exchange for exclusivity.<\/p>\n
Scarcity: If the possibility of losing the deal is high, then a deposit can help secure it.<\/p>\n
Request(s): How much are you asking of the seller?<\/p>\n
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\u2019re gaining something and how much the seller is giving up, in which case it could be non-refundable. For example, if\u00a0you are asking for training prior to close and for them to reveal their secret sauce, and open up a lot of proprietary.<\/p>\n
Let JARBLY guide you with your next acquisition purchase to help you through the process.
\nIf 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.<\/strong>
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