Post-LOI Price Changes: Evaluate Findings, Adjustments and Seller Proceeds

Write down the finding before discussing the requested discount

Record what was represented, what new evidence shows, which period/assets it affects, what remains disputed and who can resolve it. Separate information already known at the original offer from a new finding. An unsupported request to reduce the price is different from a reconciled correction. Ask the proposing party to show its calculation and assumptions rather than treating diligence as a percentage-discount exercise.

SBA acquisition guidance includes professional evaluation of LOIs, financial records and purchase-price adjustments.

Have counsel assess the actual LOI and agreements, including any binding provisions, confidentiality, access, exclusivity, deposits, deadlines and available remedies. No universal 60–90-day period, unilateral adjustment entitlement or freedom to walk away is established here. Raise a substantiated question promptly through the agreed process; signing a document does not remove the need to read its actual obligations.

Calculate one impact on a consistent earnings basis

This hypothetical sensitivity holds the earnings measure, asset scope and user-chosen multiple constant. The accountant has assumed that the revised earnings reflect a single verified recurring correction. These invented inputs are not market comparables or agreed terms.

The 90,000-dollar difference is arithmetic from assumptions, not a right to that discount or a prediction of agreement. Use the earnings bridge to verify that a proposed recurring correction is actually deducted once. Do not also subtract the same issue as a separate annual earnings loss, multiple penalty and investment charge without explaining distinct consequences. Price, taxes, financing and other negotiated adjustments remain separate.

Keep working capital and risk allocation distinct

SBA sale guidance recommends documenting assets, liabilities and sale adjustments.

Define actual included working-capital accounts, exclusions, valuation methods, target, measurement date, seasonality and dispute process with advisers through the working-capital worksheet. Cash is not automatically included. A prepaid cost needs actual post-close rights and accounting treatment. Choosing an artificially favorable period does not establish a fair target.

A lower target does not automatically help the buyer: direction and effect depend on the written formula and delivered balances. Check a single consistent calculation rather than the removed peg tricks. Have counsel evaluate price changes, repairs, indemnity, escrow, notes, earnouts or insurance as distinct options with actual availability, limits, enforcement and costs. A note defers payment rather than automatically reducing price; an escrow is not guaranteed future seller cash.

Compare the revised offer as a complete owner decision

Prepare a written original-versus-revised comparison covering headline consideration, funded closing cash, debts/costs, holdbacks, contingent payments, continuing duties, required investment and unresolved rights. A seller should compare usable proceeds and payment risk, not only nominal price; a buyer must still fund permanent operations and required corrections.

Agree who verifies each issue and what evidence would settle it. Discuss alternatives with the advisers and responsible parties, and record accepted terms in the actual documents. If no workable agreement exists, have counsel assess next steps under those documents. The calculation and worksheet support a transparent discussion; they do not certify fair value, an insurance policy, a lender commitment or a guaranteed outcome.