David Goldin is BACK – The Scoop Behind His Return
“When I started, the term merchant cash advance didn’t even exist. There really were no business loans back then, the word ‘fintech’ didn’t exist, ‘alternative lender’ didn’t exist … Back in the day it was all about getting a credit facility, and that was like the iPhone 5, and now we’re the iPhone 11. There’s more ways to be a lot less stressful, a lot more productive, and a lot less time consuming. There’s other financial instruments to really help companies excel.”
This is how David Goldin speaks of the difference between the early days of the alternative funding industry, a marketplace which he helped form in the pre-crash years of the noughties, and now, a moment which sees the CEO’s return to the market after years abroad.
Having founded Capify, an alternative finance company, in 2002, Goldin had worked in the space for over a decade before he exited the US market in January of 2017, choosing to instead focus his efforts on the UK and Australia.
Over two years later, Goldin is back in the States with Lender Capital Partners, offering capital to commercial finance companies, with a priority given to those who deal in MCAs and business loans. “It’s very exciting, I’m coming in from a different perspective,” noted Goldin. “It’s still a great industry. I’m just coming at it from a different angle which I think could be a lot more productive and scale a lot faster.”
And as well as funding the funders, this new angle includes forward flow programs, a commitment to participate in deals up to $1 million, credit facilities in the range of $20-100 million, a system by which point of sale providers are able to provide merchant financing via their software, and the Broker Graduate Program. The last of these being LCP’s in-house channel open to brokers who originate a minimum of $500,000 a month, and who want to receive capital and advice from LCP in order to become a direct funder.
When asked why he chose to return via this more top-down approach to the industry, Goldin explained that “there’s enough good players here that are trying to originate on the merchant side, so rather than try to reinvent the wheel I thought I’d come in with my years of experience running a MCA alternative lending platform in the US, knowing what the pain points are.”
Made possible through a partnership with Basepoint Capital, LCP is there to help MCA and business loans companies through both the good times and the bad, according to its founder, saying that what was a lesson for him partly informs LCP’s model.
“The time to raise money is when you don’t need it. If you run into trouble where your lender gets spooked or either has their own financial issues, or it’s a regulatory or macroeconomic condition, you just can’t bring in a new lender within 30 or 60 days, and if you do it’s not going to be on favorable economic terms. It’s really going to be a desperate attempt to get it … It’s almost like having more than one internet connection in your office, if one goes down you have a backup with no downtime.”Last modified: November 11, 2019
Brendan Garrett was a Reporter at deBanked.