As a business attorney and template specialist with over 12 years drafting and negotiating transactions across the United States, I’ve written hundreds of letters of intent to purchase everything from multi-million-dollar companies to heavy equipment and inventory. In this article, I’m giving you my battle-tested, attorney-drafted sample letter of intent to purchase that you can download for free in both PDF and editable Word format at the end of this page.
A well-drafted letter of intent to purchase (sometimes called an LOI, intent to purchase letter, or letter of intent to buy) is the critical first step in almost every business or asset purchase in the U.S. It sets expectations, protects both parties, and dramatically increases the chances your deal will close smoothly.
Important Disclaimer: This sample letter of intent to purchase and the information in this article are for general informational purposes only and do not constitute legal advice. Laws vary by state, and your specific situation may require customization. Always consult a licensed attorney in your jurisdiction before signing any document.
A letter of intent to purchase is a written document that outlines the preliminary understanding between a buyer and a seller before entering into a formal purchase agreement. While most LOIs are non-binding (except for certain provisions like confidentiality and exclusivity), they serve as the roadmap for the entire transaction.
Common situations where I recommend using a letter of intent to purchase:
In my experience representing both buyers and sellers, a clear LOI prevents 90% of the disputes that kill deals later. Key benefits include:
The IRS specifically recognizes letters of intent in several contexts, including installment sales and like-kind exchanges (see IRS Publication 544 and private letter rulings).
Almost every professional LOI I draft contains both binding and non-binding sections:
| Non-Binding Provisions | Binding Provisions (Almost Always Included) |
|---|---|
| Purchase price and payment terms | Confidentiality of information exchanged |
| Assets included/excluded | Exclusivity / no-shop period |
| Closing date | Governing law |
| Representations and warranties | Expense allocation |
| Conditions to closing | Termination rights |
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Download Letter of Intent to Purchase – Editable Word (.docx)
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Clearly identify the buyer and seller (including entity type and state of formation).
Specify whether it’s an asset purchase, stock purchase, or purchase of specific goods/equipment.
Include earnest money deposit, financing contingencies, and any seller financing or earn-out provisions.
Typically 30–90 days is common. Specify access rights to books, records, and premises.
Prevents the seller from negotiating with other buyers for 30–120 days.
Protects sensitive information disclosed during negotiations.
Examples: satisfactory due diligence, third-party consents, financing approval.
Clearly state how and when either party can walk away.
Almost always the state where the assets are located or where the seller is headquartered.
Even non-binding LOIs should be signed to show seriousness.
Below is the exact template I provide to my own clients (names and details redacted for privacy):
[Your Company Letterhead] [Date] [Seller Name] [Seller Company] [Address] [City, State ZIP] Re: Letter of Intent to Purchase [Describe Equipment/Assets/Business] Dear [Seller Name]: This Letter of Intent (“LOI”) sets forth the preliminary understanding between [Buyer Entity Name], a [State] [entity type] (“Buyer”), and [Seller Entity Name], a [State] [entity type] (“Seller”), regarding Buyer’s proposed purchase of [describe assets, equipment, or business]. 1. Proposed Transaction. Buyer proposes to purchase substantially all of the assets used in the operation of [Business Name or “the equipment listed in Exhibit A”] including but not limited to [list major categories]. 2. Purchase Price. The proposed purchase price is $[●] payable as follows: (a) $[●] earnest money deposit upon execution of this LOI (applied to purchase price at closing and refundable only if Seller breaches exclusivity); (b) Balance at closing by wire transfer or [specify cashier’s check, seller financing, etc.]. 3. Due Diligence. Buyer shall have [45] days from the date of this LOI to conduct due diligence. Seller will provide reasonable access to all requested records. 4. Exclusivity. For [60] days from the date of this LOI, Seller agrees not to solicit, negotiate, or enter into any agreement with any other party regarding the sale of the Business or its assets. 5. Confidentiality. Each party agrees to keep confidential all information received from the other party. 6. Binding Provisions. The provisions concerning exclusivity, confidentiality, expenses, governing law, and this paragraph are binding. All other provisions are non-binding expressions of present intent. 7. Governing Law. This LOI shall be governed by the laws of the State of [State]. 8. Expiration. If a definitive purchase agreement is not executed within [60] days, this LOI shall expire. If the foregoing correctly reflects your understanding, please sign and return a copy of this letter. Sincerely, [Buyer Name] [Title] [Buyer Entity] Accepted and Agreed (Intent only, except binding provisions): _______________________________ __________________ [Seller Name] Date [Title]
For smaller transactions (e.g., buying inventory or single pieces of equipment), many of my clients prefer a one-page “simple letter of intent to purchase.” The free download includes both the comprehensive version above and a streamlined one-page template.
Is a letter of intent to purchase legally binding?
Only the provisions explicitly stated as binding (confidentiality, exclusivity, etc.). The purchase itself is almost always non-binding until the definitive agreement is signed.
Can I use the same LOI for purchasing equipment vs. a business?
The structure is similar, but equipment purchases usually have shorter due diligence and fewer contingencies.
Do I need an attorney to draft an LOI?
While you can use a template (like the free one here), I always recommend having an attorney review before signing – especially for transactions over $100,000.
Where can I find IRS guidance that references letters of intent?
See IRS Publication 544 (Sales and Other Dispositions of Assets) and numerous Private Letter Rulings involving LOIs in like-kind exchanges.
A clear, professional letter of intent to purchase is one of the highest-ROI documents you’ll ever sign – it costs almost nothing but can save tens of thousands in wasted due diligence and legal fees. Download the free template below, customize it to your deal, and move forward with confidence.
Remember: This is not legal advice. Always have your final LOI reviewed by a licensed attorney in your state.
Download Now – 100% Free:
Letter of Intent to Purchase Template – Word (.docx)
Letter of Intent to Purchase Template – PDF
Need help customizing this for your specific transaction? Many of my clients started with this exact free template and later hired me for the definitive agreements. Feel free to reach out anytime.