What Is A Letter Of Intent When Buying A Dental Practice?

If you’re buying a dental practice, you’ll likely encounter a Letter of Intent, or LOI, once you’ve  identified a practice you’re seriously considering.

An LOI is a document that outlines the major terms you and the seller are proposing for the transaction. It helps both sides understand what has been agreed upon before the more detailed purchase documents are prepared.

What Does A Dental Practice LOI Include?

The exact terms vary by transaction, but an LOI may address:

• Purchase price
• Assets included in the sale
• Accounts receivable
• Earnest money
• Due diligence period
• Proposed closing date
• Financing conditions
• Lease or real estate terms
• Seller employment or transition period
• Restrictive covenant terms
• Other important conditions of the purchase

The American Dental Association describes the LOI as a roadmap for the transaction and notes that it can address many of these key terms.

At US Dental Transitions, the LOI is prepared after the buyer tours the practice and meets the seller. If the seller accepts it, the buyer’s due diligence period begins while financing and other transaction steps move forward.

Is A Letter Of Intent Legally Binding?

Generally, an LOI is not intended to be fully legally binding. However, certain provisions may be binding depending on how the document is written and the applicable law. The final purchase agreement is the document that establishes the legally binding terms of the sale.

Because the LOI can shape the rest of the transaction, you should have your attorney review it before signing. Your accountant and other advisors may also need to review specific financial or tax considerations.

What Should You Do Before Signing?

Don’t treat the LOI as a simple formality. Make sure you understand the major terms and what they mean for the rest of the purchase.

Before signing, confirm that you have:



• Reviewed the proposed purchase price
• Understood what assets are included
• Discussed financing requirements
• Identified the due diligence period
• Reviewed proposed transition terms
• Had the LOI reviewed by your professional advisors

Considering Buying a Dental Practice?

At US Dental Transitions, we help dentists navigate the steps involved in buying and transitioning into a dental practice. When you’re ready to move forward, understanding the LOI can help you approach the next stage with greater clarity.

Call 678-482-7305 to schedule a consultation with US Dental Transitions in Suwanee, GA 30024.