Exclusivity periods

What exclusivity actually commits the seller to

Exclusivity, sometimes called a no-shop provision, is a seller's written promise not to solicit, negotiate with, or accept offers from other buyers for a defined period after signing the LOI. It's one of the few provisions in an LOI that's typically actually binding, unlike price and most other deal terms (see the LOI essentials guide).

Buyers want it before spending real diligence money for an obvious reason: a QoE, a business appraisal, and legal fees can run into real money, and none of it is worth spending if the seller is simultaneously negotiating with another buyer who might accept — or make — a competing offer mid-diligence. Exclusivity converts "we have a deal, probably" into "we're the only deal being worked right now," which is what actually justifies the spend.

Typical exclusivity lengths, and matching them to your timeline

60 to 90 days is the typical range for a small business acquisition, roughly matched to how long diligence, financing underwriting, and purchase agreement drafting are expected to take (see the SBA 7(a) basics guide's timeline section for how the loan side alone typically runs 60 to 90 days from a signed LOI).

Ask for a period with real slack in it, not one that exactly matches your best-case timeline. A diligence finding that needs follow-up, an appraisal that comes in lower than expected and needs renegotiating, or a lender request for more documentation are all common — none of them unusual enough to justify losing exclusivity over, but all of them capable of eating weeks you didn't budget for.

A period that's too short creates its own pressure: a buyer racing an exclusivity deadline has weaker negotiating leverage on any diligence finding, since walking away and restarting the clock with the same seller — or losing the deal to a competing buyer entirely — becomes a real cost of pushing back on price.

What happens if the deal doesn't close before exclusivity expires

Most LOIs don't spell this out as clearly as they should, which is itself an instance of the vagueness the LOI essentials guide warns about. Two outcomes are typical: the exclusivity period simply lapses and the seller is free to talk to other buyers again, with no penalty to either side, or the parties negotiate an extension — often contingent on demonstrated progress, like an accepted appraisal, a lender commitment letter, or diligence substantially complete.

Get in writing, at the LOI stage, what triggers an extension conversation and what doesn't. A seller who's willing to extend for a genuine financing delay may not be willing to extend for a buyer who simply hasn't been responsive, and knowing which situation you're in before you're up against the deadline avoids a last-minute standoff.

The seller's counter-incentive: why sellers push back on long exclusivity

Every day of exclusivity is a day the seller can't talk to anyone else, including a potentially better offer that shows up mid-period. Sellers and their brokers know this, and a seller with multiple interested parties has real incentive to keep exclusivity short, or resist granting it at all until they're confident in the buyer.

In exchange for a longer exclusivity period, sellers commonly ask for a signal of buyer seriousness in return: a non-refundable deposit or earnest money, a fully executed LOI with specific rather than just directional price and terms, or evidence of financing readiness — a lender pre-qualification letter (see the lender pre-qualification guide) rather than just a stated intent to seek SBA financing.

Framing your ask this way — offering proof of seriousness in exchange for the exclusivity period you actually need — tends to land better with a broker and seller than simply asking for the longest period possible, since it addresses the seller's real concern (is this buyer going to tie up my listing for 90 days and go nowhere) rather than just negotiating a number.