LOIs and ICPOs 101
When we first receive an LOI or an ICPO from a buyer, many times we have to go back to the buyer and ask them to include information or sometimes ask them to change the wording or also to omit certain things. This can become troublesome and time consuming for both parties. This is why we have created a very easy explanation of how to send us ICPOs and LOIs. These are very simple steps and also save you and us a lot of time!
Many people do not know that there is a very important different between an LOI and an ICPO. The latter contains all sorts of banking information as well as a soft-probe permission. When our customers initiate negotiations with us, we encourage them to present to us an ICPO with a BCL, bank comfort letter, signed by two bank officers. This ensures that their BCL has not been modified by a paid employee in the bank. The bank must of course be a top 25 bank. Here, we present a small sample of the info that we require in the ICPO in order to have the proper credentials to run the screening process before we engage in serious and time consuming dealings. Many times we will have buyers throw LOIs at us without any regard for the legal responsibilities brought forth by issuing such a document. We treat each LOI as a very serious and law binding document and our customers must treat this document as such as well. The internet has run rampant with copies of LOIs when a group of brokers get their hands on one and then they forward them to as many people as possible, this presents a problem because the LOIs lose value and seriousness.
Along with the ICPOs or LOIs we have the all important BCL that MUST accompany these documents. Here is what a sample BCL verbiage looks like. It is very simple and if a buyer is real about making the purchase they should have no problem in producing such document. The problem occurs when the buyers want to omit this crucial step and just want to the sellers to produce POP ( Proof of Product). This is unacceptable and any negotiation MUST begin with the submitting of the BCL along with an LOI or ICPO. Many buyers also just ask for price without wanting to submit any paperwork, this is understandable to certain extent, due to some buyers not wanting to emit LOIs or ICPOs to various organizations and prefer to just do it one time when they find the right price. Any other serious inquiry or condition must be discussed only after the appropriate paperwork has been submitted. Under no circumstances will we also produce any kind of company profile or company details pertaining to the selling entity as an entry level paperwork transaction! We will walk our customers through any doubt they might have, but a minimum proof of responsibility must have already been submitted.