A practical LOI framework built for small fleet carrier acquisitions — covering purchase price, fleet terms, DOT transition, earnouts, and SBA financing conditions so you can move from handshake to signed deal with confidence.
A Letter of Intent (LOI) is the pivotal document that converts early-stage conversations with a trucking seller into a structured, binding framework for due diligence and deal closing. In trucking acquisitions, the LOI carries unique complexity because the business value is tied directly to physical assets with depreciation schedules, regulatory authorities that must be properly transferred, and customer relationships that can evaporate if the sale becomes public prematurely. For deals in the $1M–$5M revenue range, the LOI must address not just price and structure but also fleet condition carve-outs, DOT and FMCSA authority continuity, driver retention risk, and the mechanics of SBA 7(a) financing requirements. A well-drafted LOI protects both parties by defining the rules of engagement before expensive due diligence begins, establishing exclusivity for the buyer, and signaling to the seller that the buyer understands the operational realities of running a carrier. This guide walks through each section of a trucking-specific LOI, provides example language drawn from real lower middle market deals, and highlights the negotiation points that most commonly derail acquisitions in this industry.
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Identifies the buyer entity, seller entity, and the legal structure of the proposed transaction. In trucking deals, this section must specify whether the acquisition is structured as an asset purchase or a stock/membership interest purchase, as this directly affects DOT authority transfer, insurance continuity, and liability for prior accidents or CSA violations.
Example Language
This Letter of Intent is entered into between [Buyer Entity Name], a [State] [LLC/Corporation] ('Buyer'), and [Seller Entity Name], a [State] [LLC/Corporation] ('Seller'), with respect to Buyer's proposed acquisition of substantially all of the operating assets of Seller's trucking business, including but not limited to its fleet vehicles, trailers, customer contracts, freight lane agreements, DOT operating authority, trade name, and goodwill. The transaction is intended to be structured as an asset purchase for tax and liability purposes, with specific assets to be included and excluded as set forth herein.
💡 Sellers often prefer a stock sale to avoid recognizing gain on depreciated equipment and to simplify the DOT authority transfer. Buyers almost always prefer an asset purchase to avoid inheriting prior CSA violation history, unresolved accident litigation, or hidden equipment liabilities. Be direct about your preference early — this structural disagreement kills more trucking LOIs than any other single issue. If the seller insists on a stock sale, negotiate a price reduction to account for assumed regulatory and liability exposure.
Purchase Price and Valuation Basis
States the proposed purchase price, the valuation methodology used to arrive at that figure, and how the price is allocated between tangible assets (fleet, equipment) and intangible assets (goodwill, customer relationships, DOT authority). In trucking, the equipment book value and goodwill split is critical for both tax planning and SBA loan structuring.
Example Language
Buyer proposes a total purchase price of $[X,XXX,000] ('Purchase Price'), representing approximately [3.0–4.0x] of Seller's trailing twelve-month EBITDA of $[XXX,000], as adjusted for owner add-backs documented in Seller's financial statements. The Purchase Price is subject to adjustment based on findings during due diligence, including but not limited to fleet condition assessments, third-party equipment appraisals, and verification of normalized earnings. Buyer anticipates allocating approximately [60–70%] of the Purchase Price to tangible fleet assets and equipment, with the remainder allocated to customer contracts, DOT operating authority, trade name, and goodwill.
💡 EBITDA multiples for small fleet carriers typically range from 2.5x to 4.5x depending on fleet age, customer concentration, safety record, and revenue predictability. Sellers with aging fleets often inflate EBITDA by deferring maintenance — push for a third-party fleet inspection before finalizing price. The equipment allocation matters for SBA underwriting because SBA lenders want hard asset collateral; a deal weighted too heavily toward goodwill may face lender scrutiny or require a larger seller note.
Deal Structure and Financing Contingency
Outlines how the acquisition will be financed, including the expected SBA 7(a) loan amount, buyer equity injection, and any seller financing component. This section also sets the framework for an earnout if a valuation gap exists between buyer and seller expectations, which is common in trucking deals where revenue is tied to freight market conditions.
Example Language
Buyer intends to finance the acquisition using an SBA 7(a) loan of approximately $[X,XXX,000], representing [75–80%] of the total Purchase Price, with Buyer providing an equity injection of not less than [10%] of the Purchase Price at close. Seller agrees to carry a subordinated seller note in the amount of $[XXX,000] ([5–10%] of Purchase Price), bearing interest at [Prime + 1–2%], with full standby during the SBA loan term. Additionally, Buyer proposes an earnout of up to $[XXX,000] payable over [12–24] months post-close, contingent on Seller's top three freight customers maintaining not less than [80%] of their trailing twelve-month revenue with Buyer following close. This LOI is contingent upon Buyer securing SBA financing on commercially reasonable terms within [60] days of execution.
💡 Sellers resist earnouts because they feel like deferred payment contingent on factors outside their control post-close. Frame the earnout around customer retention — which the seller can influence during a transition period — rather than overall revenue. SBA lenders will require the seller note to be on full standby, meaning no payments to the seller during the SBA loan term; make sure the seller understands this before close or it becomes a last-minute deal-killer.
Included and Excluded Assets
Explicitly lists which fleet vehicles, trailers, and equipment are included in the transaction and which are excluded. This is one of the most negotiated sections in any trucking LOI because sellers frequently want to retain certain trucks, and buyers do not want to inherit high-mileage or mechanically compromised units that will require immediate capital expenditure.
Example Language
The assets to be acquired by Buyer shall include all trucks, trailers, and transportation equipment listed on Schedule A attached hereto, subject to Buyer's right to exclude any unit with mileage exceeding [500,000] miles or with estimated repair costs exceeding $[15,000] as determined by Buyer's third-party mechanic inspection during due diligence. Excluded assets shall include Seller's personal vehicle(s), any real property owned by Seller (which shall be subject to a separate lease negotiation at market rate), and any equipment currently under lien where the outstanding payoff exceeds [110%] of the unit's appraised fair market value. Seller represents that all included fleet assets will be conveyed free and clear of liens at close, with payoff proceeds funded from Purchase Price proceeds at closing.
💡 Negotiate the right to exclude trucks before you sign the LOI — not after. Sellers get emotionally attached to their equipment valuations and will resist exclusions discovered late in due diligence. Request a current fleet list with mileage, model year, and any known mechanical issues as a condition of executing the LOI. Lien payoffs from closing proceeds are standard but confirm the total lien load early; excessive equipment debt can compress net proceeds to the seller and complicate SBA collateral requirements.
DOT Operating Authority and Regulatory Transition
Addresses how the seller's DOT operating authority, MC number, and FMCSA registrations will be handled during and after the transition. This is unique to trucking acquisitions and requires coordination between the parties, their attorneys, and the FMCSA to ensure uninterrupted operations during the ownership change.
Example Language
Seller shall cooperate fully with Buyer to facilitate the transfer of Seller's DOT operating authority (DOT #[XXXXXXX], MC #[XXXXXXX]) or, in the event of an asset purchase structure, to support Buyer's application for new operating authority in advance of close. Seller agrees to maintain its current DOT safety rating and CSA scores in satisfactory condition through the closing date and to promptly notify Buyer of any new violations, accidents, or FMCSA inquiries arising between LOI execution and close. Buyer acknowledges that new DOT authority may require up to [60–90] days to activate and agrees to work with Seller to structure a temporary operating arrangement, if legally permissible, to maintain freight continuity during the transition period.
💡 This section is non-negotiable from a compliance standpoint but highly negotiable in terms of timeline and cost allocation. In an asset deal, the buyer gets a clean regulatory slate but risks an operating gap if new DOT authority is not obtained before close. Some buyers negotiate to close under a lease-to-own or operating agreement with the seller's authority for a defined transition period — this requires careful legal structuring to avoid FMCSA violations. Confirm the seller's CSA scores and any pending violations before LOI execution; a surprise compliance issue post-LOI is grounds for price renegotiation.
Due Diligence Period and Access
Defines the scope, timeline, and access rights for buyer's due diligence investigation, including fleet inspections, financial record review, driver file audits, and customer contract verification. In trucking, due diligence is operationally intensive and requires access to physical assets, third-party inspectors, and confidential shipper relationships.
Example Language
Buyer shall have [45–60] days from the execution of this LOI ('Due Diligence Period') to conduct a comprehensive investigation of the Business, including: (i) inspection of all fleet vehicles and trailers by Buyer's designated mechanic or third-party fleet appraiser; (ii) review of three years of financial statements, fuel cost records, insurance claims history, and driver payroll; (iii) audit of all driver CDL files, MVR records, drug and alcohol testing logs, and employment agreements; (iv) review of all shipper contracts, load history by lane, and freight broker agreements; and (v) review of Seller's DOT safety rating, CSA scores, accident register, and FMCSA compliance history. Seller agrees to provide full cooperation and reasonable access to its facilities, records, employees, and advisors during the Due Diligence Period, subject to reasonable advance notice and confidentiality protections.
💡 Forty-five to sixty days is standard for trucking deals; request the full sixty if the fleet exceeds fifteen units or if the business has multiple locations. Do not skip the physical fleet inspection — a deferred maintenance issue discovered after close can cost hundreds of thousands in unexpected capex. Be thoughtful about customer contact during due diligence; most sellers will not permit direct buyer contact with shippers until late in the process or post-LOI signing to protect against deal disruption.
Exclusivity and No-Shop Provision
Grants the buyer an exclusive negotiating period during which the seller agrees not to solicit, entertain, or advance discussions with other potential acquirers. This protects the buyer's investment of time and due diligence costs while providing the seller a defined timeline to evaluate the buyer's commitment.
Example Language
In consideration of Buyer's commitment to devote substantial time and resources to due diligence, Seller agrees that for a period of [60] days from the execution of this LOI ('Exclusivity Period'), Seller shall not, directly or indirectly, solicit, encourage, or enter into negotiations with any other party regarding the sale, merger, recapitalization, or other disposition of the Business or its assets. Seller agrees to promptly notify Buyer of any unsolicited acquisition inquiries received during the Exclusivity Period. The Exclusivity Period may be extended by mutual written agreement of the parties.
💡 Sixty days is reasonable for a trucking acquisition of this size; push for ninety if you anticipate complexity around fleet appraisals, SBA processing, or DOT authority transfer. Sellers represented by brokers sometimes resist hard exclusivity, preferring a 'no active solicitation' carve-out. Do not accept vague exclusivity language — it must explicitly prohibit advancing discussions with other buyers, not merely signing a competing LOI.
Seller Transition and Non-Compete
Outlines the seller's post-close obligations, including a defined transition period to support operational continuity, introductions to key shippers and drivers, and a non-compete and non-solicitation agreement to protect the buyer's investment in goodwill and customer relationships.
Example Language
Seller agrees to provide transition assistance to Buyer for a period of [90] days post-close at no additional cost, including introducing Buyer to all active shipper relationships, assisting with driver retention communications, and providing operational guidance on dispatch procedures, lane management, and vendor relationships. Following the transition period, Seller may be retained as a consultant at a mutually agreed rate. Seller further agrees to a non-compete covenant covering [freight transportation and logistics services] within a [200-mile radius] of Seller's principal operating terminal for a period of [3] years post-close, and a non-solicitation of customers and drivers covenant for the same period.
💡 Three to five years on non-compete is standard in trucking; courts have generally upheld geographic restrictions for owner-operated carriers. The geographic radius should reflect the seller's actual operating lanes — a regional carrier running Midwest lanes does not need a national non-compete. Pay close attention to the non-solicitation of drivers clause; owner-operators have deep personal relationships with their CDL drivers and could inadvertently destroy driver retention post-close if not properly restricted.
Confidentiality
Confirms that the terms of the LOI and all information exchanged during due diligence will remain strictly confidential, protecting both the seller's customer relationships and the buyer's negotiating strategy from premature disclosure to competitors, employees, or the market.
Example Language
Each party agrees to maintain in strict confidence the existence and terms of this LOI and all information exchanged in connection with the proposed transaction, including financial statements, customer lists, driver information, equipment valuations, and freight lane data. Neither party shall disclose the existence of this transaction to any employees, customers, or third parties without the prior written consent of the other party, except as required by applicable law or as necessary to engage legal counsel, accountants, or SBA lenders subject to equivalent confidentiality obligations.
💡 Driver and shipper confidentiality is particularly sensitive in trucking because news of a pending sale can trigger driver departures and shipper reassignment of freight lanes almost immediately. Structure your due diligence to minimize the number of people who know about the deal until a definitive agreement is signed. Coordinate with the seller on a joint communication plan for employees and key shippers to be deployed on or shortly after closing day.
Binding and Non-Binding Provisions
Clearly delineates which sections of the LOI are legally binding on both parties and which sections represent non-binding statements of intent, ensuring both buyer and seller understand their legal obligations prior to execution of a definitive purchase agreement.
Example Language
The parties acknowledge that this LOI is intended to summarize the principal terms of a proposed transaction and does not constitute a legally binding obligation to consummate the acquisition except with respect to the following provisions, which shall be binding upon execution: (i) the Exclusivity and No-Shop provision; (ii) the Confidentiality provision; (iii) each party's obligation to bear its own costs and expenses incurred in connection with the transaction unless otherwise agreed; and (iv) governing law and dispute resolution. All other terms set forth herein are non-binding expressions of intent subject to negotiation and execution of a definitive Asset Purchase Agreement.
💡 Always make exclusivity and confidentiality binding — these are the two provisions that actually protect the buyer's position during due diligence. Courts have occasionally enforced broader LOI provisions in trucking deals where one party relied materially on the document, so be precise about what is and is not binding. Both parties should have legal counsel review the LOI before execution to avoid inadvertent binding commitments.
Fleet Condition Adjustment Right
Negotiate an explicit right to reduce the purchase price or exclude specific trucks and trailers if the third-party fleet inspection reveals units with excessive mileage, deferred maintenance costs above a defined threshold, or title defects. This protects the buyer from inheriting a capex liability that was not priced into the deal.
CSA Score and Safety Rating Representations
Require the seller to represent and warrant that the DOT safety rating is Satisfactory and that no CSA category exceeds the FMCSA intervention threshold as of the LOI date and through closing. Include a material adverse change clause that allows the buyer to renegotiate or terminate if the safety rating deteriorates or a new FMCSA investigation is opened during due diligence.
Customer Concentration Earnout Trigger
If any single shipper represents more than 25% of trailing revenue, negotiate an earnout tied specifically to that customer's freight volumes post-close rather than applying the earnout to total revenue. This aligns seller incentives with the specific risk that drives the valuation gap.
Working Capital Peg
Establish a minimum working capital target at close — typically defined as accounts receivable from shippers less accounts payable to fuel vendors and maintenance providers — and include a post-close true-up mechanism if actual working capital at close falls below the agreed peg. Trucking businesses can have significant receivable swings tied to freight cycles.
Driver Retention Condition
Negotiate a condition to close that requires a minimum percentage of CDL drivers — typically 80% or more of the active driver roster — to have executed employment offers or contractor agreements with the buyer prior to closing. Driver loss post-close is the single fastest way to destroy revenue in a small fleet carrier.
Equipment Lien Payoff Escrow
Require that all liens on included fleet assets be paid off at closing from seller proceeds and that title transfers be confirmed clear and free before the buyer releases funds. In deals with multiple equipment loans across different lenders, a payoff escrow account managed by a title company or escrow agent provides the cleanest protection.
Seller Note Subordination Terms
Define the exact standby terms of the seller note required by SBA, including the standby period, interest accrual versus payment deferral, and the seller's rights in default scenarios. Misunderstanding the standby requirement is one of the most common last-minute issues in SBA-financed trucking deals.
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Most sections of a trucking LOI are non-binding — they express intent but do not obligate either party to close the deal. However, the exclusivity, confidentiality, and cost-allocation provisions are typically drafted as binding obligations from the moment of execution. This means the seller cannot shop the deal to other buyers during your due diligence period, and both parties are protected from disclosure of sensitive financial and customer data. You should have a transportation M&A attorney review the LOI before signing to confirm exactly which provisions are binding and enforceable in your state.
For a small fleet carrier in the $1M–$5M revenue range, 45 to 60 days is standard. You need time to complete a physical fleet inspection by a third-party mechanic, review three years of financials, audit all driver CDL files and drug test records, verify CSA scores and DOT compliance history, and confirm the strength of shipper relationships and freight contracts. If the fleet exceeds 15 units or the business operates from multiple terminals, request 60 days. SBA lenders also need time to process the loan application concurrently, so a 45-day due diligence period with a 30-day financing contingency running in parallel is a common structure.
Asset purchase is strongly preferred by buyers in trucking acquisitions and is what most SBA lenders require. An asset deal lets you acquire the fleet, freight contracts, DOT authority, and goodwill while leaving behind unknown liabilities including prior accident litigation, CSA violation history, workers' compensation claims, and environmental exposure. The tradeoff is that you will need to apply for new DOT operating authority, which can take 60–90 days and may create a brief operational gap. Sellers often push for stock sales to simplify the DOT transfer and to get more favorable tax treatment on equipment gains — this preference is negotiable but typically requires a buyer discount on the purchase price to compensate for assumed liability.
An earnout is a deferred portion of the purchase price — typically 5–15% of total deal value — that is paid to the seller only if the business hits defined performance targets after closing. In trucking deals, earnouts are most commonly tied to retention of specific freight customers or maintenance of overall freight revenue above a minimum threshold for 12 to 24 months post-close. They are used when there is a valuation gap between buyer and seller, often because the seller's revenue is concentrated in one or two shippers whose post-close loyalty is uncertain. Structure earnouts around objective, measurable metrics like gross revenue per named customer, and include clear audit rights so you can verify the calculation independently.
Small fleet carriers are generally valued on an EBITDA multiple basis, with multiples ranging from 2.5x to 4.5x trailing twelve-month EBITDA depending on fleet quality, customer diversification, safety record, and revenue predictability. EBITDA must be normalized by adding back owner compensation above a market-rate salary, personal vehicle expenses, one-time costs, and any discretionary spending run through the business. The fleet's appraised asset value also acts as a floor — buyers will rarely pay significantly more than equipment value plus a modest goodwill premium for a carrier with heavy customer concentration, aging trucks, or a conditional safety rating. SBA lenders independently underwrite the business value, so an inflated purchase price unsupported by normalized cash flow will face lender pushback.
In an asset purchase, the buyer does not automatically receive the seller's DOT authority — the buyer must apply for new authority through the FMCSA, which typically takes 60 to 90 days and requires proof of insurance, process agent designation, and BOC-3 filing. To maintain freight operations during this gap, some buyers structure a temporary operating agreement or equipment lease allowing them to operate under the seller's authority for a defined transition period, though this requires careful legal structuring to comply with FMCSA regulations. In a stock purchase, the DOT authority remains with the entity and transfers automatically, which is one reason sellers prefer this structure. Regardless of deal structure, notify your insurance broker immediately at LOI stage to confirm coverage continuity through the transition.
In SBA-financed trucking acquisitions, the seller note typically represents 5–10% of the purchase price, is subordinated to the SBA 7(a) loan, and must be on full standby — meaning the seller receives no principal or interest payments during the SBA loan term, which can be 10 years. Interest accrues during standby and is paid at maturity or when the SBA loan is satisfied. Sellers often resist the standby requirement once they understand it, so set expectations clearly in the LOI stage. The seller note signals to the SBA lender that the seller has confidence in the business's post-close performance, which can improve loan approval odds and may support a slightly higher loan-to-value ratio.
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