Archive for 2018
SoFi CEO Reiterates Company’s Low Appetite for Risk
December 3, 2018
In an interview late last week on Jim Cramer’s “Mad Money” TV show, SoFi CEO Anthony Noto said that when he took over as CEO in March, his number one priority was focusing on “quality of loans over quantity.”
“We have really strong risk controls,” Noto told Cramer. “Knowing that the [changed] interest rate was coming, we wanted to focus on per-loan economics for two reasons: one, we wanted the loans that we created to be great investments for our asset-backed security investors, but also if we keep them on our balance sheet.”
SoFi started out offering college loans and has since developed a wide product offering, including mortgages, personal loans, wealth management and a product designed for parents paying for their children’s education.
During an interview in October at Money 20/20, Noto told the audience that he was accepted to Ivy League colleges, but didn’t take out any loans because he was uncertain if he could afford to pay them back. Instead, because of his academic and sports accomplishments, he was recruited to West Point, the elite U.S. military academy where he attended for free.
SoFi’s typical customer has an average FICO score of 720, Noto said at Money 20/20.
“Higher interest rates have made our underwriting more conservative,” he said.
He also said at Money 20/20 that he believes SoFi ought to eventually open some physical locations, like ATMs, for people who get paid in cash. Additionally, the release of a digital currency product is likely on the horizon in 2019, Noto said.
Earlier last week, Cramer pointed to some non-bank lenders, like Quicken Loans, as posing a risk to the broader economy. But he was supportive of SoFi, telling Noto that he signed up for a SoFi account in 10 seconds.
“It was quick and easy, which is just what [millennials] want,” Cramer said.
Popular Business-Lending Marketplace Dealstruck Restructures
December 3, 2018VALLEY STREAM, N.Y., Dec. 3, 2018 — Innovative online business-lending marketplace Dealstruck.com (which has been featured in CNBC, The New York Times, Forbes and many other publications) has reorganized. A private investment group of fintech experts acquired the company. “This acquisition represents a significant strategic opportunity for our client base,” said Dealstruck CEO Anthony Porrata.
Dealstruck is a leader in the alternative lending space. The company provides small and medium-sized business owners with seamless access to capital. Advances in technology make the process quick and efficient with minimal paperwork.
During the restructuring process, the company paused providing loans. “Recently, many people have asked, ‘What happened to Dealstruck?’ There were rumors that Dealstruck shut down but that was not true,” noted Porrata. “We’re happy to announce the Dealstruck news that a group of private investors has created a new ownership coalition that is leading a bold evolution for the company.” The new investment group combines a portfolio of existing small business capital providers with the highest technological advances in the field of online business loans.
Company leaders expect the change will help small businesses immensely. “Clients will see quicker approval turnarounds and a more streamlined process,” said Porrata. “This will also help clients who would not otherwise have equal access to growth opportunities.”
Vice President Chris Jones expects small business owners will be excited about the Dealstruck news. “This restructuring will allow us to approve more clients than ever before,” he smiled. “I’m looking forward to joining many new business ribbon-cutting ceremonies. Nothing gives us more pride than a grand opening.”
The reorganization allows Dealstruck to expand its mission while maintaining the personalized service that makes it so well known. The new management team has access to more capital and creative financing terms for Dealstruck clients.
About Dealstruck: As a leading online capital facilitator, Dealstruck connects small and medium-sized businesses with access to a variety of working capital options. These options help business owners find custom-tailored loans, so they can better manage their time and achieve their goals. For more information, visit dealstruck.com.
Contact:
Anthony Porrata – CEO
855-610-5626
info@dealstruck.com
Small Business Forums
November 30, 2018If you’re a business owner with small business questions, we recommend the following helpful sources:
Small Business Forum
This online community is geared towards storefront businesses, is free to join, and is not filled with ads.
Business Advice Forum
This online community is geared towards online businesses, is free to join, and has minimal ads.
If you work in finance, then a great place to connect with your peers would be the deBanked Forums or a deBanked event.
Numerated to Improve Online Lending for Regional Banks
November 30, 2018
On Wednesday, Numerated announced that it had closed $8 million in financing, bringing its total to $17 million. Numerated is a platform that helps banks make automated credit and lending decisions.
“We’ve seen a tipping point in the market, with banks across the U.S. focused on digitally serving their business segments and out-competing national and global lenders,” said Numerated founder and CEO Dan O’Malley. “And we look forward to continuing to develop a platform that drives real growth for them.”
Like the recently launched ODX, which grew out of OnDeck’s success helping Chase with online lending, Numerated was first developed in 2015 by Eastern Bank to improve its online lending capabilities. In 2017, it was spun out as an independent company by O’Malley, who had been Chief Digital Officer at Boston-headquartered Eastern Bank.
A new investor who contributed to Numerated’s latest round is Raj Date, the founding Deputy Director of the Consumer Financial Protection Bureau (CFPB) and the current Managing Director at Fenway Summer Ventures. Date will also join Numerated’s Advisory Board.
“The industry has been sorely lacking a solution designed specifically for community and regional banks to compete and win against giant global banks and alternative lenders in business banking,” Date said. “Numerated has quickly grown to become the market leader in business lending with its real-time fintech platform, and I look forward to advising the company as it continues its growth.”
While OnDeck’s ODX and Numerated have similar offerings and objectives – to help banks become faster and more competitive online lenders – Numerated’s focus seems to be on servicing smaller regional banks. Some of its clients, according to its website, include Seacoast Bank, Franklin Synergy Bank, Eastern Bank and MidFirst bank.
Meanwhile, ODX services Chase and it announced in October that its first client as an independent entity was PNC Bank.
“We’re looking at the top 200 banks first,” OnDeck CEO Noah Breslow told deBanked in October.
Numerated was launched in 2017 by O’Malley and is based in Boston.
What We Learned About Credibly From Credibly’s Securitization
November 29, 2018Today, Credibly CEO Ryan Rosett told deBanked that the company’s October securitization will be used, in part, to roll out its new Market Expansion Product (MXP), which will allow Credibly to service merchants with FICO scores as low as 500 and those that have been in business for less time.
“We believe the MXP will open up the funnel by allowing us to serve business owners that we previously couldn’t,” Rosett said.
Kroll Bond Rating Agency assigned preliminary ratings to three classes of notes as part of Credibly’s first securitization. Rosett said this securitization follows a large warehouse line of credit from SunTrust Bank which is also the primary underwriter, of the securitization.
In addition to the new MXP product, Rosett said that Credibly intends to launch a line of credit product in 2019. Currently, Credibly provides merchant cash advances up to $150,000, business expansion loans up to $250,000, with terms up to 24 months, and working capital loans up to $250,000 with terms up to 17 months. Rosett said that the company’s working capital loan is its most popular product.
In an interview yesterday with Benzinga, Rosett said that he has seen a strong increase in demand for Credibly’s products and that they are currently evaluating over 10,000 applications per month.
2017 net revenue before provisions: $33 million
2017 earnings: $1.4 million
Total shareholder equity: $18.7 million
Lifetime funding volume: $700+ million
Raw # of fundings: 17,000+
Majority owned by: Flexpoint Ford
# of employees: 140
Notable deal: Acquired the rights to service BizFi’s $250 million MCA portfolio in August 2017
Provides: Small business loans (in 37 states and D.C.) and merchant cash advances
Founded: 2010 by co-CEOs Edan King and Ryan Rosett
Generates deals via: Brokers and inside sales
Patriot Bank Expands SBA Lending
November 28, 2018
Connecticut-based Patriot Bank announced today the overall expansion of its small business lending operation. At the beginning of the month, it added to it board of directors Brent Ciurlino, a former SBA official who served as Director of the Office of Credit Risk Management for the SBA. There, he supervised the $105 billion SBA 7(a) and 504 loan debenture and portfolio programs.
“As a banking executive and former federal regulator overseeing small business loan programs, Brent brings substantial expertise and value that will benefit Patriot Bank, its customers and its shareholders,” said Michael Carrazza, chairman and CEO of the bank. “As we build our small-business lending portfolio and look ahead to the goals we have set, Brent’s active involvement will bring a heightened dimension of operational, regulatory and risk management oversight.”
Patriot Bank became an approved SBA lender at the end of 2017, obtained “preferred lender” status with the SBA in September, and is currently opening SBA Business Development offices in the southeast, according to a story on the bank’s website. Additionally, according to the story, the bank signed a definitive purchase agreement in February of this year with Hana Small Business Lending Inc. for its $490 million SBA portfolio. Carrazza said at the time that this would help the bank become one of the country’s leading SBA 7(a) lenders.
Patriot Bank’s Director of SBA Lending Kevin Ferryman, himself a new hire this year, said that the bank’s goal is to enhance its traditional lending programs.
“We’re in a position now where we can approve loans for a lot more customers than we could do with our own internal policies,” he said.
Ferryman also acknowledged that having “preferred lender” status with the SBA allows the bank to process, close and service most SBA-guaranteed loans without prior SBA review.
“As a result, entrepreneurs and small community businesses can obtain their loans more quickly and efficiently,” Ferryman said.
Founded in 1994, Patriot Bank is a consumer and commercial bank with branches in affluent communities in Connecticut and one in Scarsdale, NY.
1st Global Capital Consents With SEC
November 28, 2018Subject to approval in two courts, 1 Global Capital LLC (aka 1st Global Capital) has confirmed it will consent with the SEC to be permanently enjoined and restrained from violating securities laws. The papers were submitted to the Court yesterday.
Though the terms include 1st Global Capital’s California counterpart, 1 West Capital, LLC, there is no connection to the separate securities charges pending against company founder and former CEO Carl Ruderman. Ruderman is seeking to dismiss those charges. According to court records, his reply to the SEC’s opposition is due this Friday.
BFS Capital Announces New CEO
November 28, 2018
BFS Capital announced today that it has appointed Mark Ruddock as CEO, effective immediately. Co-founder Marc Glazer, who has served as interim CEO since the departure of Michael Marrache earlier this year, will be Chairman.
“I sense there is tremendous potential in this firm,” Ruddock told deBanked. “It has in its DNA an innate understanding of the needs of small business and I think the opportunity for it is to leverage significant increases in data science and technology to help scale and deliver on this potential.”
Most recently, Ruddock served as interim CEO for nearly two years at 4finance, one of the largest European consumer focused online lenders, with more than 3,000 employees and customers across 17 countries. Ruddock said that at 4finance, every day they would issue more than 16,500 loans and make about 22,500 risk decisions. And the entire process was automated.
“There is an opportunity to achieve real scale [in small business lending] through the use of leading edge technology,” Ruddock said, and that is what he intends to do at BFS Capital. Ruddock is relocating to Florida from Berlin, Germany.
Glazer will remain a key part of the operations at BFS Capital.
“One of the biggest assets this company has is Marc Glazer,” Ruddock said. “The two of us see this very much as a joint endeavor moving forward…and I’m going to hold him to remaining actively involved here.”
Their offices are right beside each other, Ruddock said.
“[Ruddock] has an outstanding track record of transforming financial services and technology companies by accelerating their innovation and business growth,” Glazer said. “His diversity of experience, from founder to growth stage executive, across a wide variety of industries and geographies makes him an exceptional choice for BFS Capital at such a pivotal stage in our evolution.”
Ruddock was the founder and CEO of INEA Corporation, an enterprise software firm focused on the financial services industry that was acquired in 2005. Following INEA, he became CEO of mobile software company Viigo, whose flagship app became one of BlackBerry’s most downloaded apps of all time by the time the company was acquired by RIM (Blackberry) in 2010. He held a number of other positions before becoming interim CEO at 4finance in 2017.
Headquartered in Coral Springs, FL, BFS Capital funds American and Canadian small businesses with merchant cash advances and business loans. Through its affiliate, Boost Capital, the company also provides funding to small businesses in the UK. Since 2002, BFS Capital has funded more than $1.9 billion. The company also has offices in New York, California and the UK.
