Letter of Intent Template for Acquiring a Gutter Installation & Repair Business

1. Parties and Transaction Overview

Identifies the buyer entity, the seller, and the legal name of the business being acquired. For gutter companies structured as sole proprietorships or single-member LLCs, confirm the exact legal entity and whether you are acquiring assets or equity. Asset purchases are strongly preferred in this industry to avoid assuming unknown liabilities such as prior workmanship claims or unreported subcontractor disputes.

💡 If the seller operates under a DBA or has multiple related entities that own equipment or vehicles separately, identify all entities in this section. Fleet vehicles and seamless gutter machines are sometimes titled under a separate entity or the seller's personal name, which must be addressed explicitly before closing.

2. Purchase Price and Valuation Basis

States the proposed total enterprise value and the EBITDA or SDE multiple used to derive it. For gutter businesses, the purchase price should be clearly tied to trailing twelve-month or average three-year normalized earnings, with explicit language identifying which add-backs were accepted. Common add-backs include owner compensation above market rate for a replacement manager, personal vehicle expenses, and non-recurring equipment purchases.

💡 Push for a three-year average SDE calculation if a single year was unusually strong due to a large commercial contract or post-storm demand spike. Gutter businesses in storm-active markets often show earnings volatility that a single-year multiple does not capture accurately. Be explicit about which add-backs you are accepting so there is no dispute during the definitive agreement phase.

3. Payment Structure and Sources of Funds

Describes how the purchase price will be funded, including the buyer's equity down payment, SBA 7(a) loan proceeds, seller note, and any earnout component. Gutter company acquisitions are highly SBA-eligible, making this section critical for setting realistic expectations with the seller about closing timeline and lender requirements.

💡 Many gutter business sellers have not sold a business before and underestimate SBA closing timelines. Setting the 60–90 day expectation in the LOI prevents misaligned expectations. The seller note is often required by SBA lenders as a form of seller confidence in the business; be prepared to explain this to sellers who want a full cash-out at closing.

4. Assets Included and Excluded

Defines precisely what is being transferred. For gutter businesses, this section is particularly important because the most valuable physical assets — seamless gutter fabrication machines, trucks, ladders, and trailer-mounted equipment — must be itemized. Real estate, if any, is typically excluded from the operating business purchase and handled as a separate leaseback.

💡 Do not leave the equipment schedule for the definitive agreement. Request it during due diligence and confirm the condition of seamless gutter machines in particular — these are expensive to replace and their condition directly affects your ability to operate from day one. Older K-style or half-round machines with worn rollers can require $15,000–$40,000 in refurbishment.

5. Due Diligence Period and Access

Establishes the length of the due diligence window, what information the seller must provide, and confidentiality obligations. For gutter businesses, due diligence should specifically cover revenue mix between installation, repair, and recurring maintenance, as well as verification of all licensing and bonding in the operating jurisdiction.

💡 Pay particular attention to maintenance contract documentation. Many gutter cleaning programs in owner-operated businesses are informal handshake arrangements with no signed agreements. Quantify how much of the recurring revenue is supported by signed contracts versus verbal understandings — this directly affects how you value that revenue stream and whether an earnout is warranted.

6. Earnout Provisions

Defines any contingent payment tied to post-close business performance. For gutter businesses, earnouts are most commonly tied to the retention of recurring maintenance contracts or the survival of key commercial or builder relationships during the transition period. This protects the buyer if owner-dependent revenue does not transfer as represented.

💡 Tie the earnout specifically to maintenance contract revenue, not total revenue, because installation revenue is more volatile and influenced by weather, new construction cycles, and marketing spend — factors partly within the buyer's control. Using total revenue as an earnout metric creates disputes. Also specify that Seller cooperation during the transition period is a condition of earnout eligibility to ensure the seller actively supports customer handoffs.

7. Seller's Transition and Non-Compete Obligations

Outlines the seller's post-close transition support commitment and the geographic and duration scope of the non-compete agreement. For gutter businesses, seller transition is especially critical if the owner is the primary estimator, salesperson, or the face of the brand in the local market.

💡 The geographic scope of the non-compete should match the actual service area of the business — typically a 30–60 mile radius for residential-focused gutter contractors. If the seller has family members working in the business or a spouse who handles customer calls, include them in the non-solicitation provisions. SBA lenders will require a non-compete as a condition of loan approval, so this is non-negotiable in SBA-financed transactions.

8. Exclusivity and No-Shop Period

Prevents the seller from soliciting or entertaining competing offers during the due diligence period. This protects the buyer's investment of time and money in conducting due diligence on a gutter business that may involve equipment inspections, customer interviews, and lender appraisals.

💡 Forty-five days is standard for SBA-financed acquisitions given the lender underwriting timeline. If your SBA lender is particularly efficient, 30 days may suffice. Avoid agreeing to an exclusivity period shorter than your realistic due diligence and financing timeline — if you need an extension, negotiate it before the period expires rather than after.

9. Conditions to Closing

Lists the conditions that must be satisfied before the transaction closes, including due diligence completion, SBA loan approval, lease assignment, and transfer of licenses. For gutter businesses operating out of a leased shop or yard, lease assignment is often a critical path item.

💡 License transferability is a real risk in this industry. Some states and municipalities require contractor licenses to be held by an individual rather than an entity, which means the buyer may need to obtain a new license rather than transfer the existing one. Identify this requirement during due diligence and build in sufficient time to resolve it before the closing date.

10. Binding and Non-Binding Provisions

Clarifies which sections of the LOI are legally binding and which represent good-faith intentions only. Standard practice is to make confidentiality, exclusivity, and governing law binding while leaving price and deal structure as non-binding subject to definitive agreement.

💡 Make sure your attorney includes the binding provisions in a separate section clearly labeled as such rather than buried in general language. Sellers who have not previously sold a business sometimes believe the LOI is the final agreement — set clear expectations in your first conversation that a full Asset Purchase Agreement follows.