Our brokerage works within the niche marketplace of the main street healthcare business opportunities, whether it be skilled home health agencies, hospice agencies, non-skilled home care agencies, medical practices, congregate living health facilities, residential care facilities for the elderly and the like.
This most recent pandemic has brought about an abundance of the need to prevent the spread of infection and it has brought to the foreground the need for healthcare providers to help in educating and providing those many essential healthcare services. Not knowing when we will be exiting this COVID-19 world, the one thing for certain is the impending and continued need for healthcare services.
The healthcare business opportunities are plentiful with us working with numerous active sellers throughout California. We are seeing a healthy and otherwise normal influx of business sellers looking at selling their respective businesses. The motivation for business sales is what we would consider the norm, meaning sellers retiring, sellers with health issues, partnership issues, cash flow issues, divorce issues and the like. We have yet to see or hear a seller contact us with a Coronavirus based need to sell.
What we are hearing from our sellers is the need to have their clinical-staff and non-clinical staff well equipped with the knowledge surrounding infection control by using and implementing concepts such as hand-washing, using gloves, using and not touching their facemasks and the like. We have also heard from our sellers that it is not only the healthcare provider who is concerned with contracting a virus but the patient/client/resident/their family members are concerned with the healthcare provider bringing the virus to them. We had one hospice provider who told us that they had to have a Skype session with their nurses to help educate and explain the new way in which they needed to render their skilled services, whether it be by monitoring themselves for symptoms or using universal precautions much more stringently. We had one congregate seller tell us that the price for gloves almost tripled over the last couple of weeks.
Will there be issues with the healthcare business providers? Without a doubt the world will need to adapt to the changes and in the healthcare world dealing with this virus will require a learning curve. For example, we anticipate a lot of our sellers/providers to look into a telemedicine model to render their services.
Will buyers be deterred from exploring their options when it comes to healthcare business opportunities? We have spoken with two buyers, out of a large pool, that has expressed their concerns with taking a "wait and see" approach. Both buyers alluded to maintaining their liquidity. We are having a good amount of buyers calling us to look for SBA 7a healthcare businesses which may be given a boost with the pending Coronavirus legislation that will work with small business owners. We have had buyers looking at a possible increased need for healthcare services with buyers looking at increased patients and increased revenues.
As a brokerage, we have had to adapt to a new way to interact with our clients and customers. We have been doing mostly Skype conference calls and using on-line tools to help us facilitate the exchange of information. We have numerous active transactions in place with our buyers seeking a non-normative way of conducting their due diligence, meaning on-line interviews, online collaboration, and the like.
We are not seeing buyers shying away from healthcare business opportunities nor are we seeing sellers from doing any type of panic-selling; we are seeing a normal and otherwise healthy marketplace. We believe that having certain best practices in place in these times as well as our "normal" times are the foundation of a thriving business brokerage. We have been able to sustain certain behaviors such as having NDAs in place, having buyer profiles in place, asking for proof of funds, recasting our seller's financials, creating an offering memorandum to buyers, educating our sellers and buyers in the transaction process, working with local lenders and the like.