Archive for 2018
The Broker Fair 2018 Story Through Photos
May 18, 2018Broker Fair 2018 was an amazing day of inspiration, education, and opportunities. We’ve posted some of our photo footage below:
JOIN US OCTOBER 4TH IN SAN DIEGO AT THE ANDAZ FOR A SPECIAL HALF-DAY INDUSTRY NETWORKING EVENT
Couldn’t find yourself in any of our photos? We’ll publish the full album in the following weeks.
Fundbox Partners with Eventbrite to Provide Credit to Event Organizers
May 17, 2018
Today Fundbox announced an integration with Eventbrite that will give small business event creators access to capital.
Fundbox Chief Business Officer Sebastian Rymarz told deBanked that event planners for small businesses often have to lay out a lot of money up front – to secure a venue, rent equipment or pay for a performer – before they get paid through ticket sales later.
“There’s this mis-timing between expenses and revenue,” Rymarz said. “There’s an acute need and we’re able to serve [event creators] by providing them with capital to fund those events.”
Funding a company as it anticipates future earnings sounds akin to factoring. But this solution for event creators is not a factoring product. In fact, Rymarz said that Fundbox does not have a factoring product. Instead, this new solution is a new application of what the company calls its Fundbox Line product. This is a line of credit that is paid back weekly over 12 to 24 weeks, regardless of when an invoice is paid, or when tickets are sold.
Fundbox doesn’t purchase invoices. It doesn’t even verify if an invoice exists. Instead, the company relies on its technology. Once an application is submitted, its proprietary system reveals a company’s payment history, its clients, vendors and other information that paints a picture of its creditworthiness. The data system, which Rymarz calls a “ledger graph,” is a web of thousands of small and medium-sized businesses that contains information about the businesses’ relationships to one another.
“Every customer that applies makes our algorithms smarter,” Rymarz said.
He also explained that Fundbox does not employ a single underwriter. Rather, the company invests heavily in developing technology, like its ledger graph. Rymarz said that of the company’s roughly 170 employees, 60 percent of them are either machine learning experts, data scientists or engineers.
The company, co-founded in 2013 by CEO Eyal Shinar, is headquartered in San Francisco and has a research and development team in Tel Aviv.
Broker Fair 2018 Pre-Show Photos
May 17, 2018Photos from the Broker Fair 2018 May 13th Pre-show party at The William Vale in the Vale Garden Residence. Photos from the conference will be published separately. We hope you had fun.
LendingPoint Secures Facility of up to $600 Million
May 17, 2018
LendingPoint announced today that it has closed on a credit facility for up to $600 million, arranged by Guggenheim Securities. The direct consumer lender secured a facility in September 2017 for $500 million, bringing its recent combined credit facility to $1.1 billion, in just nine months.
LendingPoint Chief Marketing Officer Mark Lorimer told deBanked that he was thrilled about the new facility for a number of reasons.
“But what I’m most excited about is the fact that we need it,” he said.
In the first quarter of 2018, LendingPoint processed more than 850,000 applications from borrowers requesting more than $9.2 billion in loans. These numbers are up from a year ago and also up from the fourth quarter of last year.
This rapid increase in demand has mostly been for the company’s primary loan product, a consumer loan for people with credit scores between 580 and 700, which LendingPoint calls “near prime.” These loans are between $2,000 and $26,500 with terms of 24 to 48 months.
“While our competition will occasionally dip down [to our level], they tend to be more comfortable in the 680 and up type of range, and that means that many of [the near prime] customers will come to us.”
With LendingPoint’s acquisition of merchant onboarding company LoanHero in December 2017, LendingPoint started offering a point of sale product to merchants at the begin of 2018. This loan product offers between $500 and $15,000 to consumers making specific purchases and these loans (with terms from from 12 to 60 months) have also been in very high demand, according to Lorimer.
This product has only been offered for six months, but Lorimer said that he would not be surprised if it becomes the larger contributor to overall originations within the next few years. For now, though, the company’s direct consumer loan product is responsible for the lion’s share of originations.
Since company issued its first loan in 2015, LendingPoint has originated more than 50,000 loans totaling more than $500 million. Headquartered in Kennasaw, GA, outside of Atlanta, the company employs about 160 people.
Merchant Cash Advances Are Not “Masked” Usury or Loans
May 17, 2018
A New York Supreme Court judge cited the decision rendered in Champion Auto Sales, LLC et al. v Pearl Beta Funding, LLC on Wednesday, when she dismissed usury claims brought against four merchant cash advance companies.
The case at issue was Wilkinson Floor covering, Inc., Stephen Wilkinson v Cap Call, LLC, TVT Capital, LLC, Yellowstone Capital, LLC, Ace Funding Source, LLC (Index #160256/2016)
Champion set forth the general principle that the underlying agreement in that case was not a usurious transaction, she opined. Beside the plaintiff’s claim being procedurally deficient, the judge said that the plaintiffs had not established usury because a rudimentary element of usury is the existence of a loan or forbearance of money and when there is neither, there can be no usury.
Per the Honorable Carmen Victoria St. George:
In New York, there is a predisposition in this State against declaring that contracts are usurious. This is especially true with respect to commercial agreements, where “usurious agreement[s] will not be presumed from facts equally consistent with a lawful purpose.”
Additionally, because plaintiffs’ obligation to pay them future receivables is conditioned on plaintiffs’ receipt of such, the agreements at issue are not loans.
Prosper Loan Sales Highly Dependent on One Big Buyer
May 16, 2018Forty-five percent of all loans originated by Prosper Marketplace in the first quarter of 2018 were sold to a single buyer, according to their latest earnings statement. The single largest buyer over the same period last year had only purchased 33% of their loans.
Last year, Prosper announced that they had closed a deal with a consortium of institutional investors to buy up to $5 billion worth of loans over the next 24 months. The investors in the consortium are affiliates of New Residential Investment Corp., Jefferies Group LLC and Third Point LLC.
Prosper originated $744 million worth of loans in the first quarter of this year alone. $333 million of those were purchased by the consortium for a total of $2.16B purchased to-date.
World Business Lenders Secures Credit Facility
May 16, 2018
World Business Lenders announced yesterday that it obtained a $30 million credit facility from a Cayman Islands fund created by a group of Asian banks and investors.
“The terms [of the facility] are very attractive,” said World Business Lenders CFO Tom Wills. “Single digit fixed interest rate and high advance rates.”
The new facility will be used to continue funding a loan product that is a hybrid of a business loan and a mortgage, Wills told deBanked. He said that World Business Lenders invented this product three years ago.
“Three years ago, we saw some credit weakness coming into the market and we decided to develop this real estate collateralized product,” Wills said.
World Business Lenders provides business loans that range from $5,000 to $2 million and are paid back between six and 36 months. Their average loan size is $150,000.
Wills said that the hybrid product is becoming more institutionally accepted and that they have been seeing more demand for it. Created in 2011, the company employs over 100 people at its office in Jersey City, NJ.
Welcome to Broker Fair
May 13, 2018Update: Thanks to everyone who attended, participated, and sponsored!
Registration on Monday starts at 7am where you will be able to pick up your badge. The continental breakfast will be available at 8am and the opening remarks begin at 8:45am.
The lunch, sponsored by National Funding, begins at 12. There will be a kosher option available.
Later at the end of the day, the cocktail reception at Westlight, which is upstairs on the 22nd floor, will begin at 5:30pm. Westlight offers amazing outdoor views of the Manhattan skyline. That event is sponsored by RapidAdvance and all you need to enter is your Broker Fair badge.
The agenda will also be available on the backside of your badge.
Thank you also to our Gold Sponsors: National Business Capital, CFG Merchant Solutions, BFS Capital, and CanaCap
