TRANSACTIONS GLOSSARY
LOI
Letter of Intent
A preliminary document describing proposed transaction terms, often largely nonbinding.
What does LOI mean?
A preliminary document describing proposed transaction terms, often largely nonbinding. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
LOI in context
A buyer and seller sign an LOI before detailed acquisition diligence.
Why it matters in financing
LOI can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related transactions terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.