From Offer to Close: What the Deal Process Actually Looks Like

A behind-the-scenes walkthrough of a business transaction: the letter of intent, due diligence, financing contingencies, and closing.

OCTOBER 2026 | THE COOPERHAWK DISPATCH

For many business owners, the mechanics of a sale are more intimidating than the decision to sell. An owner may understand why they want out and even have a rough sense of what the business is worth, but the space between an accepted offer and a closed transaction can feel like a black box.

What actually happens after a buyer submits an offer? What is being verified during due diligence, and why does it take as long as it does? Why does financing seem to hold up every deal at some point? What actually happens on closing day, and does the owner walk away with a check that afternoon?

These questions come up constantly, from both sellers and buyers. Both sides tend to picture the process as more unpredictable than it usually is. In reality, the path from offer to close follows a fairly consistent sequence, even though the specifics of any single transaction depend on the business, the buyer, and how the deal is structured.

Understanding that sequence will not make a transaction effortless but it  will replace some of the uncertainty with a roadmap. This roadmap is often  what people are actually asking for when they say they are worried about “the process.”

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The Letter of Intent

The letter of intent, generally called the LOI, is the document that typically marks the shift from evaluating a business to negotiating the framework of a transaction. A buyer who has reviewed the business, asked questions, and decided the opportunity is worth pursuing puts an offer in writing. That offer typically covers price, structure, financing assumptions, a proposed timeline, and any major conditions the buyer expects to be satisfied before closing.

Some owners may be  surprised to learn that many LOIs stipulate that most of their business terms are non-binding, though the exact effect always depends on how the document is written. A handful of provisions, such as confidentiality and exclusivity, are typically binding regardless of whether the deal ultimately closes. We’ve written separately about what belongs in a well-drafted LOI; what matters for this walkthrough is what happens once the LOIgets signed.

Exclusivity deserves particular attention because of what it asks the seller to give up. Once an LOI is signed, the seller generally agrees to stop marketing the business and to stop engaging with other prospective buyers for a defined period, often 60 to 90 days. In exchange, the buyer commits real time and money to verifying the business, which  they would be reluctant to do without some assurance the seller will not sell out from under them.

That trade only makes sense when the LOI reflects a buyer who is serious and reasonably positioned to close. This is one of the areas where a broker’s judgment matters most, since not every offer deserves exclusivity and not every buyer who submits an LOI has done enough homework to know what they are committing to. Part of an experienced broker’s job before a seller signs is to examine the terms closely enough to know what happens if financing falls through, what happens if due diligence uncovers a problem, and what obligations survive if the deal does not close.

An LOI is best understood as a framework for the work that follows, not a promise that a sale will happen. It gets both sides pointed in the same direction and gives the transaction a structure to move through. What comes next determines whether that structure holds.

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What Changes Once the LOI Is Signed

Signing the LOI shifts the tone of a transaction. Before the LOI, the conversation is largely about whether there is a deal to be had at all. After the LOI, the conversation becomes about verification: confirming that what the buyer believed about the business when they made the offer is actually true.

This is also typically when the buyer’s team expands. A buyer who was working independently may now bring in an accountant to review financials, an attorney to begin drafting or reviewing legal documents, and, if the purchase involves financing, a lender who will start its own underwriting process in parallel. The seller’s side often mirrors this, with the broker coordinating the flow of information and the seller’s accountant and attorney becoming more actively involved.

The exclusivity period that began with the LOI now becomes the clock everyone is working against. 60 or 90 days sounds like a long runway until due diligence, financing, and legal drafting all need to happen inside it. Delays on one track put pressure on the other two, which is part of why experienced brokers keep all three moving at once rather than one after another.

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Due Diligence

Due diligence is the process of confirming, in detail, that the business is what it was represented to be. It is the stage owners tend to dread most, largely because it can feel like an audit of everything they have built. In practice, due diligence is a structured verification process rather than a search for reasons to derail the transaction, even though a thorough review can still uncover issues that need to be addressed.

Financial Due Diligence

Financial due diligence is usually the starting point. A buyer will want to see tax returns, financial statements, and often an add-back or normalization analysis explaining how reported profit relates to the normalized cash flow of the business. Discrepancies between what a seller told a buyer informally and what the underlying records show are one of the most common sources of friction at this stage, which is why accurate financials matter long before a buyer ever asks to see them.

Operational Due Diligence

Operational due diligence looks at how the business actually runs day to day. That can include customer concentration, contracts, vendor relationships, equipment condition, licenses and permits, and how dependent the business is on the owner personally. A business that cannot function without the current owner presents a different kind of risk than one with a manager and a trained team already in place.

Legal Due Diligence

Legal due diligence covers leases, contracts, corporate structure, outstanding litigation, and compliance with the licenses or regulations specific to the industry. Depending on the business, this stage can also involve environmental assessments, franchise agreements, or intellectual property review.

None of this happens in isolation. A finding in one category often affects another; a customer concentration issue might prompt a lender to reconsider loan terms, and a lease with an unfavorable assignment clause might affect how a deal gets structured. Due diligence is less a single event than a series of connected findings that shape the rest of the transaction.

The most important thing an owner can do during this stage is respond quickly and completely, which is far easier when someone is coordinating the flow of requests rather than an owner fielding them alone. Delays in providing requested documents are one of the most common reasons closings slip past their original timeline, and gaps in the requested information tend to create more suspicion than the information itself would have.

While it’s important to respond promptly to due diligence, that’s not all owners have to do.The buyer, and the lender if financing is involved, are evaluating an operating company, not a snapshot frozen on the day the LOI was signed. If sales soften, a key customer leaves, or ordinary decisions start getting made with one eye on the sale instead of the business, that tends to show up in the numbers before closing ever happens. The most useful thing owners can do during this stretch is keep running the company the way it was before the offer arrived, and let the transaction proceed alongside that rather than in place of it.

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Financing Contingencies

In many Main Street transactions, the buyer is financing some portion of the purchase, often through an SBA-backed loan. Financing tends to be  the part of the process sellers understand the least, and it is often the part most likely to affect the timeline.

An SBA loan involves more than a lender deciding whether the buyer is creditworthy. The lender’s underwriting will examine the buyer’s financial position, the business’s historical performance, and the collateral involved. Additionally,  the loan typically requires a business valuation or appraisal performed independently of the broker’s own analysis. That appraisal can occasionally come in below the agreed purchase price, which forces a conversation about adjusting price, adding cash, or restructuring the deal in some other way.

The lender’s timeline also does not always match the timeline in the LOI. Underwriting can move quickly when a file is clean and the buyer is well qualified, or it can stall for weeks over documentation or appraisal questions. This is one of the main reasons closing dates in a purchase agreement are often described as targets rather than guarantees.

A financing contingency in the purchase agreement protects the buyer if financing falls through despite a good faith effort to obtain it. Sellers sometimes view this contingency with suspicion, as though it gives the buyer an easy way out. In practice, it reflects the reality that financing decisions are made by a third party neither the buyer nor the seller controls. What a broker can help a seller evaluate is whether the buyer applied promptly and is responding to the lender in good faith, rather than using the contingency as leverage to slow-walk a deal.

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From Letter of Intent to Purchase Agreement

As due diligence and financing move forward, attorneys on both sides are typically drafting the definitive purchase agreement. This document replaces the LOI as the binding contract governing the sale, and it is considerably more detailed.

The purchase agreement spells out the final price and structure, representations and warranties each party is making about the business, what happens if something disclosed during due diligence turns out to be inaccurate, and how disputes after closing will be handled. Depending on the size and structure of the transaction, it may also address working capital, escrows, holdbacks, seller financing, or other mechanisms that define what each side is responsible for before and after closing. We’ve covered those provisions in more depth in our guide to what belongs in a business sale contract; what matters here is timing rather than the fine print.

This stage of drafting and negotiation can take several weeks on its own, particularly on more complex transactions. It is normal and expected for redlines to go back and forth more than once before both sides are ready to sign.

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Closing Day

Closing is often less dramatic than owners expect. By the time a transaction reaches this stage, the substantive negotiating is largely finished. What remains is executing documents, funding the transaction, and formally transferring ownership.

In most Main Street deals, closing happens through signed documents, wire transfers, and a closing statement that accounts for every dollar moving in the transaction: purchase price, loan proceeds, payoff of existing debt, prorated expenses, and fees. This can happen in person, though a growing share of closings are handled remotely, with documents signed electronically and funds wired according to the closing statement.

Once funding is confirmed, ownership transfers. For the seller, this is the moment the transaction becomes real in a way that even a signed purchase agreement does not fully capture. For the buyer, it is the beginning of a different kind of work: actually running the business.

Many transactions include a transition period immediately following closing, where the seller remains available to help introduce the buyer to employees, key customers, and vendors, and to answer questions as the buyer settles in. The length and structure of that transition should be defined well before closing day, not worked out on the spot.

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Why the Timeline Rarely Goes Exactly as Planned

Every transaction starts with a projected closing date, but many transactions close later than that date. This is common enough that experienced buyers, sellers, and brokers plan for it rather than treating it as a sign something has gone wrong.

Financing is a common source of delay, in part because it depends on a third party’s internal process. Due diligence findings that require follow-up, whether that means gathering additional documentation or working through an unexpected issue, are another common cause. Legal drafting can also take longer than anticipated, particularly when a business has an unusual lease, a franchise agreement, or a corporate structure that requires extra attention.

None of this means the deal is falling apart. An additional lender question, an attorney’s redline, a follow-up request from due diligence, or a document that takes longer to track down than expected are normal parts of getting a transaction to the finish line, not signs that something has gone wrong. The distinction worth watching for is different: whether an issue simply needs to be resolved, or whether it changes the underlying economics or viability of the deal is the question. A piece of equipment that needs replacing sooner than expected is an example of an issue needing resolution; that’s a relatively simple fix.  A key customer relationship that turns out to be shakier than represented is closer to the second instance in that it could change the underlying essence of the deal. Slower does not necessarily mean worse. Owners who understand that distinction tend to experience the process with far less anxiety than owners who expected the LOI’s projected closing date to hold exactly as written.

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Why Understanding the Process Matters

The mechanics described here are not a guarantee of how any specific transaction will unfold. Every deal has its own variables, and an experienced broker’s role is managing them as they come up, not promising a process free of them.

What tends to reduce fear on both sides of a transaction is not the absence of complexity. It is knowing what the complexity actually consists of. A seller who understands why due diligence takes the time it takes is less likely to interpret a routine request as a sign the buyer is having second thoughts. A buyer who understands how SBA underwriting works is less likely to panic when an appraisal comes back lower than expected. The process is not designed to be mysterious. It only feels that way to people going through it for the first time.

If you are considering a sale and want to understand what the process would realistically look like for your business, we are here to walk you through it.

Cooperhawk Business Brokers info@cooperhawkbrokers.com | cooperhawkbrokers.com

THE COOPERHAWK DISPATCH · October 2026