Business broker is asking for LOI before I have lending secured...

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March 27, 2020

by a searcher from University of South Alabama in Mobile, AL, USA

What would be your response? I have explained what info would be outlined in LOI. Dumbfounded.

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Reply by a searcher
from Georgetown University in Bettendorf, IA, USA
Walker remains the man. However, regarding an LOI, it’s kindof a circular argument. The lender can’t make a determination until they know the price but you might not know what you can afford, etc. However, in my experience it comes down to making the offer which is accepted. Until you have that, the other parts simply can’t be figured out.
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Reply by a searcher
from University of California, Berkeley in San Francisco, CA, USA
I recently experienced the same. I have been in banking for many years and have looked at many sponsored deals. I find this practice of asking for LOI before DD disturbing. In my case, I just ignored the broker, namely due to general market condition and opaqueness. In normal business environment, I would likely have asked the broker to jump on a quick call.
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