Archive for 2019
David Goldin is BACK – The Scoop Behind His Return
November 7, 2019
“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.”
PIRS Capital, Fundera Make Crains’s Fast 50
November 7, 2019
Crain’s New York Business has revealed its Fast 50 companies. Among them are Fundera (#22 with 720% 3-year growth) and PIRS Capital (#50 with 230% 3-year growth).
Crain’s says that to be considered for the Fast 50, firms had to be at least four years old, generate at least $10 million in 2018 revenue and be headquartered in the New York metropolitan area, which includes the five boroughs; Nassau, Suffolk and Westchester counties; and Bergen, Essex, Hudson, Morris and Union counties in New Jersey.
#1 on the list was Hoboken-based Bear Mattress with 3-year growth of 13,481%.
Who Exactly Got Paid In Knight Capital’s Sale… And How Much? ($27.8M)
November 6, 2019
Update 11/7/19 9:05 AM: Ready Capital Corporation confirmed this morning that Knight Capital’s total sale price was $27.8M. $10M was in stock.
When Ready Capital Corporation acquired Knight Capital last week for $10 million in stock and an undisclosed amount of cash, questions abounded over who directly benefitted from the sale and how much cash was actually exchanged.
Documents later submitted by Ready Capital revealed that Knight Capital was owned by a San Jose, CA-fund named Len Co, LLC. Len Co began lending to Knight Capital in 2014 and later converted a large principal balance into a major equity investment in Knight in early 2018.
Several months later, Len Co’s primary creditor forced Len Co into Chapter 7. Shares in Knight, being a major asset of Len Co, became a talking point of that proceeding, ultimately propelling Knight into the hands of an eager buyer, Ready Capital Corporation.
The stock in the sale was therefore almost entirely paid out to the Estate of Len Co, LLC (640,205 of the 658,771 Ready Capital Corporation shares to be precise). This being the case was a reflection of the predicament Len Co was in, not necessarily that there was anything adverse about Knight.
On May 31, the bankruptcy court presiding over Len Co approved a proposed sale of Knight Capital to a confidential buyer for a grand total of $25 million, via $10 million in stock and a whopping $15 million in cash to be completed by December 31, 2019.
The buyer was identified as a publicly traded company. Assuming no better bids were received by Mid-August, the company would be sold for the $25 million under the terms offered to the publicly traded buyer. The court reaffirmed it on August 15th.
In October, Ready Capital Corporation announced that they had acquired 100% of Knight Capital in a deal for $10 million in stock and an undisclosed amount of cash.
Update: After this story was posted, Ready Capital confirmed on a morning earnings call that the sales price was slightly more than $25M and was finalized at $27.8M.
Lendio Says There’s Been a Strong Uptake Of Sunrise
November 6, 2019
Last week Lendio announced that its bookkeeping and invoicing service, Sunrise, had partnered with WePay, an integrated payments business of JPMorgan Chase, to form the freemium product Sunrise Pay.
Stemming from an acquisition in Q1 of this year, Sunrise, formerly Billy, was picked up by Lendio after the company realized many of its customers who were small business owners were struggling to manage their accounts and invoices.
As such, Lendio CEO Brock Blake claims that there’s been a strong uptake of Sunrise amongst their clients. “They love that it goes out and pulls your bank data every day. That you can sync your credit card to it. That it is a double-entry accounting system. And that it does all your invoicing, your profit and loss, and balance sheet.”
The service is free to Lendio customers, with tiered versions that offer human bookkeepers being available to those willing to pay. Sans such add-ons however, the base product will allow small business owners to collect payments faster through WePay’s streamlining of the payments process.
“Simplifying the invoicing and payments processes for small business owners means they have more time to spend growing their operations,” said WePay VP of Marketing Jennifer Lewis. “WePay’s partnership with Lendio will help small businesses across the country to grow, create jobs, and increase their economic impact.”
Lending Club Originated $3.3B in Loans in Q3
November 5, 2019
Lending Club originated $3.3B in loans in q3 and reported a minor net loss of $400,000. That loss was a $22.4M improvement over the same period last year, mainly due to an increase in “net revenue” and a decrease in class action and regulatory litigation expense. One of those class action lawsuits against them was dismissed on October 31.
Lending Club is the number one provider of personal loans in the country and is continuing to grow their marketshare, CEO Scott Sanborn said during the earnings call. One analyst asked if their continued lead on that could be due to the market’s declining emphasis on growth as a performance metric. Sanborn responded by saying that the competition had not let up at all on marketing and that direct mail marketing and competition is still at operating at an extremely high level.
Merchant Cash Advance Industry Pioneer David Goldin Launches Lender Capital Partners To Provide Financing To Merchant Cash Advance / Alternative Business Loan Providers
November 5, 2019
White Plains, NY – November 5, 2019 – David Goldin, one of the merchant cash advance industry pioneers who founded one of the first US merchant cash advance providers in 2002, Capify (formerly known as AmeriMerchant), that later expanded to the UK and Australia has partnered with a subsidiary of Basepoint Capital, a seasoned specialty finance group, to form Lender Capital Partners (http://www.lendercapitalpartners.com). Basepoint has provided over $300 million in committed financings / forward flow purchases in the merchant cash advance / alternative business loan industry.
Lender Capital Partners (LCP) provides MCA and alternative business lending platforms with strategic capital including:
- Forward flow programs – LCP funds 100% of the amounts disbursed by the platform in connection with their funding of advances / business loans including sales commissions to their customers to free up cash and avoid the burden of equity requirements or “hair cut” money associated with traditional asset-based credit lines.
- Participations / Syndication – by having LCP purchase a participation in larger deals, the platform is able to offer larger size approvals to their customers and brokers / referral partners without taking on concentration risk. LCP can participate up to $1 million in each deal and provide strategic capital by offering our many years of industry experience underwriting larger size deals.
- Credit facilities – LCP provide credit facilities for MCA and alternative business loan providers that begin at a minimum of $20 million and can go up to $100 million+. Our credit facilities typically offer a higher advance rate than a bank and less stringent concentration limits.
- Broker Graduation Program – LCP will allow brokers to take the next step of becoming a direct lender by providing the capital and know-how needed to fund deals on their own. Designed for brokers that can originate a minimum of $500k/month, LCP can provide the capital needed and set up brokers with one of our partners to provide a back office if needed for underwriting / servicing without having to make the investment on their own.
- Point of Sales / Credit Card Processor Merchant Cash Advance / Merchant Financing Program – LCP can provide a turnkey solution for POS / Credit Card Processing companies to offer a merchant financing program to their merchants to compete with some of the larger POS providers / credit card processors that are now offering these programs in-house and have had great success. LCP can provide the capital needed for a merchant financing / merchant cash advance program as well as introduce one of our underwriting/servicing partners if needed.
“After exiting the US MCA business in 2017, I have decided the time is right to offer my 17+ years of global MCA / business lending experience to the industry by partnering with Basepoint to supply capital to the MCA / business loan industry. I believe the various programs we offer at Lender Capital Partners are tailored for just about any company in the industry – for both current lenders as well as larger brokers/ISOs that are looking to graduate to the next step of becoming a lender as well as to POS providers / merchant acquirers looking to offer an in-house program to their merchants. And my 17+ years industry experience is a great value-added benefit that very few lenders, if any can bring to the table”, says David Goldin, a principal of Lender Capital Partners.”
About LENDER CAPITAL PARTNERS
Lender Capital Partners provides capital to commercial lenders, particularly in the merchant cash advance / alternative business loan industry. One of the founders of Lender Capital Partners is David Goldin. David is the Founder of Capify, one of the first merchant cash advance providers in the US founded in 2002. David scaled Capify to 225 employees operating in 4 countries and sold the US business to a competitor in 2017 and secured a $95 million credit facility with Goldman Sachs to fund Capify UK and Capify Australia which has over 125 employees total today operating in each of those markets. David has over 17 years experience in the merchant cash advance / alternative business finance industry and is considered a pioneer in the industry. David’s extensive expertise allows Lender Capital Partners to bring strategic value to our relationships, not just capital. For more information on Lender Capital Partners, visit http://www.lendercapitalpartners.com
GoDaddy Now Offers Kabbage Business Lines of Credit To Its Customers
November 4, 2019
A curious thing popped up in my Godaddy account dashboard on Monday. Underneath the section to manage my domains, a “Deals from GoDaddy Partners” box offered me $300 in Free Yelp Ads on one side and a business line of credit from Kabbage up to $250,000 on the other.
The Kabbage offer is brand new, according to a joint announcement that came out the same day publicizing a “strategic partnership” between the two companies.
By clicking on it, I found that GoDaddy customers can transmit their account information to Kabbage by clicking a button to begin the loan application process. If a loan is approved, GoDaddy customers save up to $100 on their first monthly loan fee, the website states.
While a simple web domain may only cost around $10 a year, Kabbage has suggested that funds be used for other purposes like staffing up for the busy holiday season, purchasing additional inventory or equipment, or applying it toward digital marketing initiatives.
Borrowers will be able to access the Kabbage dashboard from their Godaddy accounts, an FAQ says.
Below are some screenshots:
Janene Machado Appointed Director of Programs for PCMA’s New York Chapter
November 4, 2019
DeBanked’s Director of Events, Janene Machado, has been appointed the Director of Programs for Professional Convention Management Association’s (PCMA) New York Chapter. Machado will oversee the Program Committee for a three-year term (January 2020 – December 2022). The Committee is responsible for deciding on the topics, programming, logistics, and speaker invitations for the New York Chapter events.
PCMA, a volunteer driven organization, is the world’s largest, most respected and most recognized network of business events strategists with more than 7,000 members and activities in 30 countries.
Machado has overseen and directed deBanked’s exceptional events including CONNECT and Broker Fair since joining the company in July 2018. The volunteer position with PCMA will be in addition to her continuing to work for deBanked.
