Archive for 2018
Behalf Secures $150 Million in Debt Capital
February 8, 2018
Behalf, the New York City-based alternative business loan company, obtained $150 million in debt financing this week from a private investment fund managed by Soros Fund Management LLC. Viola Credit also participated in the debt financing.
“This is a significant step forward for Behalf. This funding allows us to expand our fast-growing e-commerce B2B financing platform and enhance our ability to provide the best business terms to customers, in a fraction of the time of a traditional business lender,” said founder and CEO of Behalf, Benjy Feinberg.
The company, founded in 2012, initially started doing MCA only and is now transitioning to offer loans, according to Feinberg.
Behalf’s business model works in the same way as a credit card. The small business customer doesn’t receive money from Behalf. Instead, Behalf pays the vendor of its small business customer directly, and then the customer pays Behalf. Customers pay different rates depending on their risk profile.
As an analogy for the business model, Feinberg told deBanked: “If you give a kid $50,000, he could go to Vegas. If you give the college $50,000, the kid goes and gets an education.”
With Behalf’s transition into loans, the company partnered with FinWise Bank, a Utah-chartered bank, in August of last year. Behalf, which also has an office in Tel Aviv, has a virtual MasterCard feature that allows its customers to use their Behalf credit line to fund purchases across the MasterCard network.
The company has a total headcount of about 90 between its two offices, according to Feinberg.
Decision One Debt Relief, MCA Helpline Not Related, Company Says
February 7, 2018Everest Business Funding has voluntarily withdrawn claims against one of three named defendants in a debt settlement tort lawsuit in Florida, court records show. The case against Decision One Debt Relief was withdrawn without prejudice on February 2nd.
That leaves MCA Helpline, LLC and Todd Fisch individually as the remaining named defendants.
Everest had originally alleged that Fisch was the individual behind both MCA Helpline and Decision One Debt Relief. Decision One Debt Relief, however, told deBanked that the two companies had no ties to each other. “Decision One has no relation with Todd Fisch or MCA Helpline,” Decision One’s president wrote as part of an emailed statement about the dismissal.
Everest is still seeking damages for the remaining Defendants’ tortious interference with at least a dozen of its merchant contracts.
Responding to Demand, BlueVine Increases Factoring and Business Credit Lines
February 6, 2018Invoice factoring and small business loan company, BlueVine, recently doubled its credit line size for its invoice factoring product up to $5 million. Simultaneously, it has also increased its business line of credit maximum to $200,000, from $150,000.
“The number one [reason for the expansion] has been an increase in demand from our existing customers,” said BlueVine Chief Revenue Officer Eric Sager.
He said they had granted higher lines of credit to some customers who asked for it, and when BlueVine saw success, it decided to make the higher credit available to all customers.
The Redwood City, CA-based company was founded by Eyal Lifshitz in 2013 as a factoring company, but it has since offered small business loans, which Sager told deBanked now accounts for about half of the company’s revenue.
Last year, BlueVine introduced a 12-month line of credit based on monthly payments. Previously, they had only offered a 6-month business line of credit, called Flex Credit, based on weekly payments. Sager that said that many BlueVine customers use the company’s factoring services as well as its credit line offering.
“The reason why [this increase in credit] is so important is because it allows customers to use our line of credit facility not just for working capital…but now for capital expenditures as well,” Sager said.
Many alternative lending companies boast of using sophisticated technology to almost instantly issue loans or credit lines. While Sager said that BlueVine does use sophisticated technology, he said they also use reliable industry standard technologies and that they have a dedicated account management team that customers can reach out to, particularly large ones.
One of Sager’s favorite slogans that he applies to BlueVine is: “Always available, never needed.”
6th Avenue Capital Builds Business Development Team with Veteran Hires
February 6, 20186th Avenue Capital has hired three seasoned employees to its business development team: Mitch Levy, Gary Lockwood and Marc Seidel.
Chief Operating Officer
“We’re putting together a team that I wanted to put together,” said Chief Operating Officer Darren Schulman. “They didn’t come knocking on my door, I knocked on theirs.”
This is part of an expansion of the New York-based company, which launched formally in 2016 and was reorganized in April 2017 with the hiring of Schulman.
Strategy Officer
Mitch Levy, who used to work with Schulman at AmeriMerchant (now known as Capify), will oversee the company’s business origination strategy. Levy joins the company with more than three decades of alternative financing experience across multiple disciplines including origination, underwriting, investing, operations and legal.
“6th Avenue Capital has quickly established itself as a major force in the Merchant Cash Advance business,” Levy said. “In this role, I have a great opportunity to work closely with the leadership team and our strategic partners to help small businesses across the country gain fast and efficient access to capital in times of immediate need.”
Business Development Manager
Gary Lockwood, who also worked with Schulman at Capify, joins 6th Avenue Capital as Business Development Manager. He built and led a successful consulting business where he opened several business financing sales offices. Lockwood was a Senior Vice President of Partnerships at Fundation and worked at Capify as Director of Business Development with responsibility for onboarding, managing and training broker and partner groups.
VP Business Development
Schulman has never worked with Marc Seidel, but told deBanked that he knew of him and came highly recommended by Levy. Seidel will be 6th Avenue Capital’s Vice President of Business Development. Previously, Seidel spent more than 10 years working at Bizfi, where he started his career in the alternative financing industry as a Risk Analyst. He then worked his way up to a Senior Underwriter position and landed a business development role where he was responsible for managing relationships with brokers and driving deal demand.
Chief Executive Officer
“Adding these industry veterans in business development will undoubtedly advance our mission to expand our existing network of ISOs and other strategic partners to ensure small businesses have access to capital in hours,” said 6th Avenue Capital CEO Christine Chang.
Schulman takes pride in assembling a veteran team that does the right thing by clients, he said.
“We don’t want to give merchants more money than they can afford,” he said.
He said the the company now employs 20 and is growing.
“We’re looking to form long-term relationships with brokers and merchants and we’ve been successful at getting merchants to refer us to other merchants.”
Kabbage Extends Credit Lines to $250,000
February 2, 2018
Kabbage, the online business lender, is now offering credit lines of up to $250,000, which it says is the largest credit line available from any online lender and will allow the company to expand its customer base to serve larger companies.
“Increasing our lines of credit to $250,000 significantly enhances our ability to solve financial hurdles for larger and more specialized businesses,” said Bob Sharpe, COO of Kabbage.
The company finished 2017 having crossed the $4 billion threshold for loans issued to more than 130,000 small businesses. And its Chief Revenue Officer, Victoria Treyger, told deBanked back in December that loans were getting larger.
“Our lines of credit and amounts taken continue to increase as we begin serving more and larger small businesses,” she said. “We see great momentum across all industries in all 50 U.S. states.”
Back in September, the Atlanta-based company received an investment of $250 million from Japanese telecommunications company, SoftBank, and the company has been thriving.
By the end of last year, it had lent a total of $4 billion since it was founded in 2009. According to American Banker, Kabbage worked with its banking partner, Salt Lake City-based Celtic Bank, to develop the larger line of credit.
Kathryn Petralia, Kabbage’s president and co-founder, is excited about this new development.
“[This] helps us close the capital gap that businesses encounter today,” she told American Banker. “It allows us to better the customers we have who qualify for more credit.
eBay to Part Ways With PayPal, Bring Payments in House
February 2, 2018
We all must leave our parents one day and branch out on our own.
However, this is probably not what PayPal Holdings Inc. had in mind.
The company is surrendering its duties as the primary payment option for its former parent, eBay Inc.
On Wednesday, eBay announced that Adyen, a Dutch company, will take over as the main payments processor when the current deal with PayPal expires in mid-2020. The change will allow the platform to host more of the transaction process in house.
eBay was motivated to make a change by the desire to intermediate the transactions taking place on its site and to allow buyers and sellers to complete their business within one website (eBay).
“As a leading global commerce company, eBay believes that payments intermediation is strategically important to improve the buyer and seller experience on its platform and will enable the company to further innovate on behalf of its customers,” the company said in its statement. “In a rapidly changing and competitive e-commerce landscape, shoppers expect to be able to both shop and checkout on the site on which they transact. As eBay intermediates payments, shoppers will be able to complete their purchases within eBay.”
However, this will not be a total break between the two companies that were once attached at the hip. PayPal will remain an option for eBay users until the summer of 2023.
PayPal’s stock took a nosedive following the news. As of 9 a.m. on Friday in the company’s HQ of Palo Alto, CA. the stock had slid from $85.32 on Wednesday morning, down to $77.25 with brief rebounds along the way.
While the move may not have done any favors for PayPal’s stock, eBay is optimistic that it will be a boon for merchants that use the platform to sell their wares.
According to the release, most sellers can expect their costs of payments processing to be reduced after completing the transition. They should also enjoy a “simplified pricing structure and more predictable access to their funds.”
LendingPoint Hires Citibank Veteran as New CFO
February 1, 2018
LendingPoint, the Atlanta-based online balance sheet lender, announced today that Citibank veteran Tony Martino would be joining the company as CFO. This comes less than one month after the company’s acquisition of LoanHero, a fully integrated, one-stop-shop loan origination and payments platform. LoanHero helps merchants provide access to consumer finance, increase revenue and eliminate friction at point of sale.
Martino, who worked at Citibank for 18 years in multiple roles including CFO for the bank in Israel and Turkey, said he thinks that LendingPoint’s acquisition of LoanHero “triples the size of the markets available to us.”
LendingPoint focuses on making loans to what it calls “near prime” consumers. The company defines “near prime” to include personal-loan applicants with FICO scores from 600 to 700, according to an earlier discussion with deBanked. LendingPoint has even trademarked “NEARPRIME” as a single word in all capital letters.
The company’s CEO, Tom Burnside, told deBanked in the fall that it received $2.5 billion worth of loan applications in September alone.
“We are delighted to add Tony Martino to our team at LendingPoint,” Burnside said. “His deep experience with multi-product balance sheet lenders as well as his experience in rapidly growing markets match perfectly with where we are in our journey at LendingPoint.”
LendingPoint is not yet four years old and this will be Martino’s first time working at a startup. He told deBanked that he’s very excited about this challenge, but acknowledged that his work overseas in emerging markets, like Poland and Turkey, was a lot like working at a startup.
“Although [LendingPoint] is new,” Martino said, “the employees have a depth of experience here.”
In Wake of Fraudulent DocuSign Emails, How to Recognize The Real Thing
February 1, 2018
Fraudulent emails with DocuSign attachments have permeated the MCA business in recent weeks. Independent MCA broker and Small Business Banker Paul Kelly told deBanked that he received up to 15 emails over the last few weeks from both Edwin Torres and John Edwards at the MCA company RET Capital. The emails had an attachment that encouraged the reader to “View Document.”
Staff at deBanked also received similar emails from Edwin Torres on January 16 and from John Edwards on January 23. Suspicious of the email, Kelly didn’t open the attachment, which was wise. According to DocuSign’s Trust Center page, people should “not click on attachments within an email requesting your signature. DocuSign emails only contain PDF attachments of completed documents after all parties have signed the document.”
The page lists other signs that may indicate a fraudulent DocuSign email, such as misspellings or conveying extreme urgency.
When we asked Torres if he had intended to send these emails, he said he not. Instead, he said he was the victim of a virus from DocuSign, which was likely hacked, he said.
“This has ruined my life for the past few weeks,” Torres said.
He also urged people not to open the attachment, as he had, which allowed the virus to send emails from his email account. Torres said that other companies in the industry had also been affected by the virus. But he said that his company’s computers had been cleaned for the virus last week and, so far, he hasn’t received any complaints this week.
