It has been confirmed that all SBA loans closing from now until September 27th will not have required payments for 6 months. According to Ward and Smith P.A., the SBA will pay the first six months to the lender as a waiver of the payment. This is great news for both buyers in the acquisition process and business owners seeking working capital loans. Further on SBA lending, Treasury Secretary Steven Mnuchin announced he will request additional funding for loans to help small businesses in the U.S during the pandemic if the $350 billion loan pool runs out. According to the SBA, lenders are beginning to process applications today (4/3).
Even with shelter-in-place and lockdown orders keeping much of the country confined to their homes, online shopping has not been thwarted. E-commerce, ad spend, cloud services, and grocery delivery services are all on the rise. Adobe reports e-commerce is up 25% after measuring transactions from 80 of the top 100 online retailers in the U.S. In a statement to Forbes, Adobe representative Kevin Fu explained, “retailers that had invested in digital early on are seeing those investments pay off.” Microsoft has seen an impressive 775% increase in cloud services while products used to defend against viruses are up 807% from January 1 to March 11. With commerce rapidly going more digital and digital purchasing power up 3% YoY, e-commerce sales will likely continue to grow.
PayPal is relaxing select payment fees for small businesses in response to the ongoing crisis, giving customers the option to defer repayments on business loans. CEO of PayPal, Dan Schulman, spoke to CNBC on the matter, saying, “We’re one of the largest providers of working capital for small businesses, and we’re going to continue to provide that when we can.” At no additional cost, the online payments system will let customers request to defer their repayments on business loans and cash advances. Through the end of April, PayPal also guarantees to waive chargeback fees for merchants if customers “file a dispute with their credit card issuer.” Further measures include partnering with Mastercard to allow PayPal business debit card users to access double the amount of instant cashback rewards on eligible purchases.
Meetup CEO David Siegel announced this week that the groups and events platform has divested from WeWork. The company has been acquired by an investment group “formed for the express purpose of acquiring Meetup,” explained Siegel, who will stay on as CEO. The group is led by AlleyCorp and is comprised of several private funds and technology executives with Kevin Ryan as Chairman of the board. The company recently updated its policy to let hosts and organizers hold online events during the pandemic to continue serving its 49 million users and 230,000 organizers.
New in FE exclusive listings, this week we have a diversified Mobile Apps opportunity in the Photography and Graphic Design niche listed at $17.6MM. This suite of market-leading iOS apps offers a broad set of features and functionality useful for both B2C and B2B iOS users. Monetized via recurring subscriptions and in-app purchases, this business has generated gross revenues of $7M annually with a c.221.2% CAGR over the 2017 to 2019 period. With high net margins of c.59%, average ratings of 4.5 stars across all apps, and more than 6.4M downloads and 28.3M sessions in the L3Y, this listing presents a unique opportunity for a new owner to acquire a highly successful and diversified app portfolio in a lucrative niche. If you are interested in this business, please follow the link above to request a prospectus.
During this time, FE International continues to offer its full range of M&A services. This includes our new 409A Valuation service for businesses requiring valuations for various purposes, for example collateralizations, loans, and other business needs amid the current pandemic.
In addition, we would like to take the opportunity to share an article on companies that are still hiring at this time produced by our friends at SaaS Mag. The fourth issue of SaaS Mag will be released soon, so don’t forget to claim your complimentary subscription! This edition will feature an exclusive cover story and interviews with SaaS leaders such as G2, Microsoft, Hotjar, FastSpring and more! Subscribe for free today.
In events news, SaaStock Remote will kick off its virtual conference on June 10-11, 2020. Join the global community of software as a service (SaaS) founders, executives, and investors for an entirely virtual event. Leaders from Softbank, Glassdoor, Drift, Shopify, and others will take the stage to help you take your business to the next level. Click here to register.
Continue reading below for more on PayPal, Meetup, SBA loans and more.
Listings
New
Mobile Apps – Market Leading Photography & Graphic Design – $7M Gross/Yr
- Diversified suite of iOS and Android Apps in the lucrative Graphic Design niche
- Rapid revenue growth with earnings reaching a c.221.2% CAGR over the 2017 to 2019 period
- Clear market fit with over 6.4M downloads and 28.3M sessions in the L3Y
- Stellar product reviews with average App ratings of 4.5 stars across 28 different Apps
- Highly trained App-creation team consisting of six developers and two graphic designers capable of running the day-to-day App creation process
Yearly net profit: $4,139,000
Asking price: $17,634,000
Affiliate – Sewing & Embroidery Resource – $14K Gross/Mo
- Firm foothold in the lucrative sewing & embroidery niche
- Solid organic search presence with rankings for c.31,000 keywords
- Over 195 detailed articles on the niche
- Lean operating model with high net margins
Yearly net profit: $165,000
Asking price: $600,000
Affiliate – Discount & Vouchers Code Resource – $2.9K Gross/Mo
- Firm foothold in the discount and vouchers code niche
- Impressive traffic statistics with over 200,000 page views in the LTM
- Rapid revenue growth with c.$30,000 earned in the LTM
- Strong SEO presence helping to secure ranking for c.2,300 keywords
Yearly net profit: $29,000
Asking price: $77,500
Affiliate – Tennis & Racquet Sports Reviews – $1.6K Gross/Mo
- Portfolio firmly positioned in the lucrative tennis and racquets sports niche
- Vast content library with c.100 articles over a diversified spectrum of products, ranking for c.5,600 keywords
- High volume of traffic with over 165,000 visitors over the LTM
- Lean and scalable cost structure driving high net margins
Yearly net profit: $17,900
Asking price: $47,000
Sold
Affiliate – Sports & Outdoors Reviews – $5.8K Gross/Mo
In the News…
SBA Begins Processing Loans
Last Friday, Congress passed a $2 trillion bill aimed at providing relief to workers and businesses harmed by the coronavirus pandemic. The economic relief package will provide $350 billion in loans for companies with fewer than 500 employees. Lenders will begin processing applications for loans starting today, Friday, April 3rd. Treasury Secretary Steven Mnuchin said Wednesday that, should the loan pool for small businesses run out, he is ready to ask Congress for more money for small businesses. These measures are looking to help cover payroll, benefits, rent and mortgages and feature loan forgiveness. However, loan forgiveness amounts are reduced if businesses cut jobs or reduce pay for their employees.
E-Commerce is Up 25%
E-commerce is on the rise due to shelter-in-place lockdowns in effect throughout the U.S. and contributed to the increase in e-commerce spending by 25%. Other industries that have also grown due to the coronavirus pandemic are cloud services, news, gaming, e-commerce ad spending, and grocery delivery services. Adobe representative, Kevin FU, says that retailers who had invested in digital early on, are seeing those investments pay off as more people rely on “click and collect” services. Social distancing has created a surge of customers looking to blend physical and digital shopping.
PayPal Relaxed Fees for Businesses
Due to the COVID-19 crisis, PayPal is relaxing some of its payment fees for small businesses. This decision was made in an attempt to allow for more flexibility and to help alleviate any issues small businesses might be facing. According to PayPal CEO Dan Schulman, the company is allowing customers to defer payments on business loans and cash advances at no additional cost, as well as letting them avoid chargeback fees they might face. In addition, PayPal has vowed not to lay off any of its workforce during the crisis. Schulman went on to point out how, at the moment, digital payments are continuing to boom as people stay home and rely on e-commerce more and more, and customers are continuing to utilize PayPal and Venmo to facilitate those transactions.
Meetup Divests from WeWork
Meetup has announced it has been acquired by a consortium of investors made including private funds and tech executives. Chairman of the Board will be be AlleyCorp’s Kevin Ryan, Meetup’s CEO David Siegel will stay on as Chief executive. As a result of the acquisition, Meetup will be divesting from WeWork which acquired the company in 2017.
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