An Indication of Interest (IOI) is a short, non-binding letter proposing a range of value for a business and the general terms a buyer would pursue. It comes before the Letter of Intent and is common on larger or intermediary-run deals where sellers screen buyers before granting deeper access.
IOI vs LOI
| Feature | IOI | LOI |
|---|---|---|
| Price | Range (e.g. $900k, $975k) | Single number |
| Binding parts | None | Exclusivity, NDA |
| Stage | Before access | Before diligence |
An IOI of "$900,000, $975,000, asset sale, SBA-financed" invites the seller to open the books; the winning buyer then signs an LOI at a firm price.
Why it matters when buying a business
On broker-run or competitive deals, a crisp IOI gets you into the data room; a vague one gets you screened out. Because the price is a range, you keep negotiating room for what diligence uncovers before you commit to an LOI number.
