Morli Desai·March 30, 2023

How to Buy a $4m E-com Business with an SBA Loan | Morli Desai Interview

Morli Desai, a Wharton MBA and former Wall Street and corporate private equity professional, bought Amira Natural Skincare (admirerskincare.com), a women's natural skincare e-commerce brand doing $4m in revenue and ~$1m SDE, for $3.75m (3.5x SDE) in December 2022. The deal had an unusual two-entity structure: an SBA 7(a) loan funded the U.S. C Corp entity (~$800k SDE), while a separate heavily seller-financed transaction covered the Australian entity (~$200k SDE), which took an additional three months to close pending Australian business registration. A single mom who left corporate on her 40th birthday during the pandemic, Morli was drawn to e-commerce specifically to avoid people-heavy service businesses, leveraging her product strategy and marketing background. Key growth opportunities include reducing over-reliance on PPC advertising, building organic/brand marketing, activating the underutilized email list, and expanding into Canada, Australia, and the UK using storefronts the seller had already built. Early operations were rocky — a barcode mix-up triggered an Amazon inventory recall of the hero product, Google Ads were simultaneously flagged, and the SBA bank nearly pulled out at the 11th hour — but Morli remains enthusiastic about the business and is focused on SKU-level profitability and cash flow management.

Deal facts

purchase price: $3.75m (including inventory; $3.6m asking price + ~$150k inventory)
multiple: 3.5x SDE
sde ebitda: SDE ~$1m ($800k U.S. entity, $200k Australian entity)
revenue: $4m
financing structure: SBA 7(a) on U.S. entity (~80% leverage) + seller note (~10%) + equity; separate seller-financed transaction for Australian entity at ~85% seller note
notes: Two separate LOIs/transactions: U.S. entity (C Corp, SBA-eligible) and Australian entity (seller financed, closing delayed ~3 months pending Australian business license). Hero product = 70-80% of sales. Business was ~5 years old at acquisition. Closed December 16-19, 2022. Broker: Quiet Light. Inventory held at 3PL. Found via Centurica MarketWatch aggregator.

Why this business

Morli wanted a product-based business (vs. services) to avoid heavy people management, which drained her energy in corporate. E-commerce matched her product strategy and marketing background, allowed full geographic flexibility (removing her Atlanta constraint), and Amira's natural skincare products for women aligned with her personal identity as the ideal customer. She was excited to invest in the brand and infuse a mission around helping women feel confident.

What's working

80% of sales through branded Shopify website (vs. Amazon), indicating brand pull and reducing platform dependency
Plant-based natural skincare product with low return rate and strong customer satisfaction (60-day money-back guarantee rarely triggered)
Subscribe and save launch on Amazon 'really exploded,' confirming repeat-purchase appetite
100,000-person email list with ~30,000 active users represents an under-leveraged retention asset
Sellers had already built out Canadian and Australian storefronts, providing ready-made geographic expansion opportunities
Contractor team (inventory managers, marketing/PPC manager, web developer) came over with the business and continued operating at steady state
Morli's product strategy and marketing background fits directly with the business's core growth levers (less time needed on manufacturing/logistics, more on marketing)

What's hard

Hero product (70-80% of revenue) had a barcode mix-up on Amazon within first 30 days, triggering a full inventory recall and supply chain disruption
Google Ads bot flagged and took down PPC campaigns simultaneously, causing traffic drop; restored within hours but highlighted fragility
PPC marketing manager was related to the seller and had only a 6-month contract; had to quickly find agency replacement to de-risk key-man dependency
SBA bank pulled out of SBA lending program near end of diligence period, nearly killing the deal; loan broker Joe McAleer had to find a replacement bank at the 11th hour
Over-reliance on PPC ads for all $4m in revenue; organic presence and email marketing largely undeveloped
Rising input costs (manufacturer price increases, shipping), rising PPC ad costs, and rising interest rates are compressing cash flow and profitability on some SKUs
Cash flow and inventory management complexity was a rude awakening; hired a CFO coach specifically to model profitability at the individual SKU level
Closing the Australian entity was delayed ~3 months waiting for Australian business license/tax number
Young business (~5 years old) with fast growth creates SBA hesitation and buyer uncertainty about whether trailing-12-month SDE is sustainable

Notable quotes

I want to be a business owner this looks great my mom got a lot of respect from the community she loved what she did and I had a lot of great times helping her with her business.

A friend said to me why don't you just buy something and it was one of those things like the record scratch of like wait what like you can actually do that.

I really set myself apart from aggregators and said you know this is a personal business and it was very lucky we're in the business where I was like the ideal customer for this business and I really wanted to be the face of it going forward and so I wrote a personal handwritten letter saying you know this is really what my dream is.

Instead of hiring another marketing manager I decided to work with an agency that a girlfriend of mine owns and work with her to transition the PPC business over to her.