Questions about E-com deal

December 12, 2022

by a searcher from University of Illinois at Urbana-Champaign in Chicago, IL, USA

Hi Searchfund fam

Looking at an e-com product distribution company. The cash flow as reported is decent and the product base seems stable but I haven't had any experience in the e-com space. Had a couple of questions

Is it difficult to get a SBA loan for Ecom?
What are typical multiples on e-com product companies?

And a bit more on a general basis ..

What rates/term are people getting on seller financing?

Thanks
Krishnan

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Reply by a searcher
from Salisbury University in Virginia Beach, VA, USA

Hi Krishnan, it may be worth you looking into Boopos for funding. They only finance eCommerce & Subscription based companies. With their narrow focus they can fund deals quickly. I believe they require you show proof of funds of 15% of EV and the max they fund is $2m. Keep in mind that Boopos is also a revenue share lender. Instead of your typical loan payments they base your loan payments based on a % of revenue. Which can be both good and bad.
I also know a lot of searchers & experienced operators in the eCommerce space if you would like to partner with someone who has experience in this sector.
Let me know if I can help

Reply by a lender
from University of Minnesota in Brookfield, WI, USA

Hi Krishnan - I am a preferred SBA lender with First Business Bank. Our bank has financed dozens of ecommerce transactions and has created a set of guidelines that we like to follow on each transaction. Typically if the deal falls within those lending parameters it makes sense for all parties. Happy to chat further......good luck!

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