How to Protect Yourself in an LOI - Main Street Deals #5

Описание: In this episode of Main Street Deals, Kevin Henderson and Sam Rosati continue their deep dive into letters of intent, picking up where the prior conversation left off. They move beyond headline purchase price terms and into the often overlooked mechanics that can materially change a deal’s outcome. From seller notes and personal guarantees to working capital adjustments and indemnification structure, the discussion highlights how seemingly small clauses can carry major financial consequences. This episode is a practical walkthrough for buyers who want to understand not just what goes into an LOI, but why each line matters.

They discuss:

How to structure seller notes, including contingent forgiveness mechanisms that comply with SBA rules
Why personal guarantees on seller notes can undermine alignment between buyer and seller
The difference between earnouts and contingent seller notes in SBA financed deals
Why working capital negotiations are effectively purchase price negotiations
How indemnification caps, non-competes, and exclusivity provisions can make or break a transaction

This episode is essential listening for SMB buyers who want to negotiate LOIs with confidence and avoid costly surprises during definitive agreement negotiations.

Links:
SMB Law Group - ⁠https://smblaw.group/⁠
Eric on LinkedIn - ⁠  / ⁠  
Kevin on LinkedIn - ⁠  / ⁠  
Sam on LinkedIn - ⁠  / ⁠  


Topics:
00:00 - Intro
03:58 - Seller note recap
06:53 - Personal guarantee debate
12:16 - Security interest basics
14:17 - Contingent seller notes
21:21 - Choosing the right metric
24:26 - Equity rollover rule changes
26:21 - Working capital basics
29:07 - Seller pushback analogies
35:14 - SBA limits on adjustments
37:20 - Indemnification deal protection
43:22 - Conditions and contingencies
44:42 - Non-compete red flags
47:35 - Exclusivity and binding terms
48:48 - DIY LOI final advice