Articles by deBanked Staff

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Illinois State Rep Proposes Database of All Funded Deals

February 19, 2024
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Illinois Capitol BuildingA Representative of the Illinois State legislature has introduced its own version of a commercial financing licensing bill. HB5587, which makes licensing sound like one is consenting to judgment and references the word subpoena 29 times, calls for a state-controlled commercial financing database that would require all licensed providers to upload their deals into it after they’re funded. The bill says that such a database would not be made public but would be used to monitor licensees, prepare industry reports, and to refer instances of illegal activity to law enforcement.

This proposal is aimed at non-bank providers of commercial financing rather than brokers or technology services, and it’s not limited to just loans. For instance, it says that providers would have to include “the amount of the receivables purchase price paid to the recipient and, if different from the purchase price, the amount disbursed to the recipient after any amount deducted or withheld at disbursement, if applicable” when submitting funded deals to the database.

Overall, the database component to this licensing bill somewhat overlaps with what will soon be required at the national level by the CFPB under the small business lending data collection rules. Are you prepared to comply with those rulex already?

This Illinois bill is new. You can read the full thing here.

NACLB Conference Founder Files Chapter 11

February 15, 2024
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Caesar's PalaceKris Roglieri, founder of the National Alliance of Commercial Loan Brokers (NACLB) conference, filed for Chapter 11 on Thursday as his legal issues continued to accelerate. In addition to his primary business Prime Capital Ventures being placed into receivership, numerous lawsuits, and his home being raided by the FBI, yet another party filed suit this morning to say that it had also been scammed by Roglieri after paying him $6 million as an upfront payment for a loan that he then ghosted on. The Receiver in the case believes that victims lost more than $50 million “in what appears to be a multi-state fraud scheme.” He has not actually been charged criminally at this time.

Roglieri’s bankruptcy election was under subchapter V, meaning the debts listed are business debts. Among them is an unpaid bill for $436,237 to Caesars Entertainment in Las Vegas where the NACLB held its last conference this past September. Other debts include a $709,000 EIDL loan, $600,000 in outstanding state taxes, ~$1 million to law firms, and a $100,000 business line of credit for the Commercial Capital Training Group.

Shopify Capital Renewal Rate Greater than 70%

February 13, 2024
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Shopify Capital’s funding business is continuing to gain momentum, according to the company’s latest quarterly earnings. Shopify stopped specifying precisely how much it is originating (perhaps because deBanked kept turning those numbers into posts every quarter for years) but still lists the receivables from its loans and merchant cash advances as a line item on its balance sheet. There the balance increased from $580M to $816 year-over-year.

“We know the capital product has been effective because we’re seeing a repeat renewal rate of over 70%, a testament to our ability to help merchants access the funding they need for growth, particularly ahead of key sale times, including the crucial Q4 holiday shopping season,” said Shopify President Harley Finkelstein during the call.

NACLB Named in Receivership Pursuit

February 13, 2024
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CourtroomA series of legal disputes between creditors and Prime Capital Ventures, LLC has taken an interesting turn. Originally, creditors forced Prime Capital Ventures, LLC, a commercial real estate financing firm, into involuntary bankruptcy late last year but withdrew it after a review determined that the assets they sought were allegedly no longer in the possession of the defendant. Despite this, related lingering issues kept the entity in receivership and on Jan 24 the Court appointed a permanent receiver. The Receiver, on behalf of Prime, then filed a lawsuit against its owner Kris D. Roglieri and his related entities including Prime Commercial Lending, LLC, Commercial Capital Training Group, The Finance Marketing Group, FUPME, LLC, and the National Alliance of Commercial Loan Brokers LLC and other individuals for the recovery of assets related to Prime.

The Receiver opens the lawsuit by saying that “This case involves what appears to be a multi-state fraud scheme with victims holding claims for well over $50 million for return of deposits, which were paid and then not returned.”

On February 2, FBI agents executed search warrants at the homes of Roglieri and Kimberly Humphrey, according to a letter filed by a lawyer for Prime which was reviewed by deBanked. They are in the process of getting separate criminal defense counsel, according to that letter.

The lawsuit by the Receiver against Roglieri et al can be viewed here.

BusinessFunding.com Sells for $44,000

February 12, 2024
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businesslending.comThe world of domain name investors called out a big sale that took place on GoDaddy over the weekend. The domain is businessfunding.com and it reportedly sold for $44,000, according to Namebio which tracks sales when data is available. The whois information does not reveal who the buyer is at this time.

Other potentially high value domain names in the small business finance industry include businessloans.com and smallbusinessloans.com, each of which are standalone businesses.

Meanwhile:
loans.com was sold for $3 million 24 years ago and today redirects to the homepage of Bank of America.

businesslenders.com belongs to Business Lenders, LLC, which has since ceased its lending operations.

businesslending.com redirects to a bio page for a big real estate broker.

merchantloan.com redirects to Circadian Funding’s website.

revenuebasedfinancing.com redirects to Lighter Capital’s website.

lenders.com is a page that hasn’t been set up yet.

lending.com doesn’t resolve.

How important is a domain name to a business? Important enough that a business can hardly afford to lose one. And did you hear about the first domain name to ever be used as loan collateral over the blockchain? It just happened recently!

Amazon’s On-Balance-Sheet Business Loan Program Steady

February 11, 2024
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amazon truckAmazon’s business loan program was relatively steady in Q4 if its seller lending receivables are any indication. Those receivables totaled $1.3B, which was in line with where it has been throughout 2023. Compared to Amazon’s overall business, which generated $170 billion in sales in Q4 alone, its in-house lending business is rarely if at all mentioned.

Part of this is because Amazon has forged ties with third parties to service large swaths of its sellers. These parties include Parafin, Lendistry, and more recently SellersFi.

“Amazon is committed to providing our sellers with flexible and convenient access to capital, regardless of their size,” said Tai Koottatep, director and general manager, Amazon WW B2B Payments & Lending as part of the SellersFi announcement last month. “Through this lending option with SellersFi, we’re able to strengthen that commitment and offer sellers even more opportunities to grow their business.”

“Working with the Amazon Lending team has been an exceptional experience for SellersFi,” said Leonardo Felisberto, Head of Global Business Development and Partnerships at SellersFi during that same announcement. “Their dedication to empowering sellers aligns perfectly with our mission, and together, we’ve unlocked more possibilities for e-commerce entrepreneurs. We’re hopeful this can be another step toward supporting the growth aspirations of online sellers in the US and beyond.”

Lightspeed’s Merchant Cash Advance Business is Accelerating

February 8, 2024
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lightspeed commerce“Our capital business has grown—it’s doubled from over a year ago and we expect that trajectory to continue. And capital revenue comes in at a 95% gross margin,” said Lightspeed CFO Asha Bakshani in the company’s most recent quarterly earnings call.

Although Lightspeed is more widely known as a global e-commerce platform, analysts have been encouraging the company to ramp up its merchant cash advance business because of the considerable margins it produces. As such Lightspeed through Lightspeed Capital has been doing just that. And not just in the US. “We launched Lightspeed Capital in France, the Netherlands and Belgium this quarter, and Germany shortly after the quarter, expanding our global footprint for this high-margin offering,” said company CEO Jean Paul Chauvet.

Origination growth has been slow, however, because the company has been concerned with the potential impact it will have on its own available operating cash. This fear seems slightly overblown as Lightspeed reported having $750M in cash as of the close of the most recent quarter and said that merchant cash advance originations were responsible for using up only $8.3M in cash during the quarter.

PayPal Reiterates Tightening of Business Lending Originations

February 8, 2024
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paypal buildingAfter announcing a sudden pullback on business loans and MCAs in Q3 due to higher than expected charge-offs, PayPal maintained that the belt was still tightened in Q4.

“We have taken a prudent and active approach to managing our overall credit risk, tightening originations within our PayPal business loans portfolio,” said PayPal CFO Jamie Miller on the quarterly earnings call. “We are carrying lower credit receivables after tightening originations last year.”

Tightened originations has led to the company being dethroned as the top online unsecured small business lender. PayPal at the very least held that notable distinction in 2019 and 2020 but they’ve since been overtaken by Square Loans and Enova.