Archive for 2020
Enova International announced the appointment of James J Lee to the position of Chief Accounting Officer. The new role went into effect on November 23rd.
Lee was previously the Controller of Life & Health of Kemper Corporation.
An Inventory and Purchase Order Lending Platform Targeting $500K to $10MM Opportunities
Bethesda, Maryland / November 30, 2020 – Black Olive Capital LLC (“Black Olive”) announced today the launch of its intelligent inventory and purchase order lending platform. Black Olive’s mission is to provide fast and easy inventory and purchase order financing to underserved small-to-medium sized businesses (SMBs) to help them unlock capital to grow and create jobs. Its financing solutions work for businesses nationwide, and in most industries.
By utilizing Black Olive’s intelligent inventory lending platform, SMBs can dramatically increase their liquidity, and ability to scale their businesses with credit facilities that can grow and become more flexible.
Black Olive will address the SMB niche that has been underserved for years. SMBs that need $500,000 to $10 million of liquidity based on inventory or purchase orders are often overlooked by traditional and alternative financing because the large, fixed costs of traditional underwriting make economies of larger deal sizes important—creating a barrier for smaller opportunities. Black Olive’s platform uses more efficient proprietary processes and technology to lower fixed costs and barriers and target $500,000 to $10 million opportunities.
Black Olive’s platform streamlines the application and approval process for SMB owners. SMBs will be able to utilize Black Olive’s lending platform to obtain financing in a fast, efficient and transparent way.
Carlos D. Gomez, who has significant experience in inventory, purchase order and asset-backed lending, will serve as co-founder and president of Black Olive. Mr. Gomez said, “Black Olive’s proprietary platform unlocks capital tied up in inventory and maximizes loan sizes. Through Black Olive’s purchase order financing program, we can help SMBs acquire the inventory needed to fulfill customer orders. Our proprietary processes and technology are available to most industries, ranging from e-commerce to retail to industrial.”
Black Olive’s platform was also specifically built to partner with accounts receivable (AR) factoring lenders, e-commerce lenders, asset backed lending (ABL) lenders, and traditional.
About Black Olive Capital LLC
Provide fast and easy inventory and purchase order financing to small-to-medium sized businesses in the United States seeking $500,000 to $10 million to grow and create jobs.
For more information about Black Olive go to www.blackolivecapital.com or contact Black Olive at firstname.lastname@example.org to learn more about its financing solutions.
In the weeks following the election, the news cycle has been heavily focused on the presidential transition’s legal aspects.
Instead of worrying about vote recounts, merchant cash advance (MCA) companies are considering what legal changes, if any, might come after Jan 20th. Will the Biden administration spell the beginning of new regulations on the world of business to business financing?
Lawyers say that while the industry is waiting on Georgia to decide the Senate’s fate, increased regulation at the federal is unlikely to occur.
“If the Republicans hold in Georgia, and we have a split legislative branch, that means gridlock, and gridlock is great for the industry,” Catherine Brennan, partner at Hudson Cook, said. “The more progressive wing of the Democratic Party would like to put merchant cash advance under the auspices of quasi-consumer [loans,] but they won’t be able to do that with the split legislative branch.”
Brennan has a wealth of experience as a commercial finance compliance and litigation lawyer and regularly contributes to the national conversation on alternative and fintech law topics. She said that even if Democrats control the Senate, moderates may still hold back progressives from making new regulatory laws.
“There’s some moderate Democrats who understand the need for this market, they understand the product, and their constituents, in particular, use the product,” Brennan said. “I don’t see anything at the federal level that should be viewed as an existential threat to the ongoing existence of the industry.”
What Brennan does see as more likely, is the gradual adoption of MCA under preexisting executive agencies like the CFPB and FTC. She pointed to the Dodd-Frank Act implementing consumer lending data collection as a possible avenue regulators might take by pushing for data collection in the MCA space.
Still, Brennan insists that MCA firms will be OK so long as they understand the FTC can already look into commercial finance practices and that it has gone after ISOs in the past. She sees that as the number one development from a regulatory standpoint because the FTC will ultimately review what took place in the financial service markets during the pandemic and decide if action is warranted. Still, if funders have been responsible and fair, they should be in a good place.
Brennan did say that the position might be up for grabs when it comes to the head of the CFPB. The previous leader, Richard Cordray, fought with the Trump administration against his re-appointment, believing his position surpassed the president’s authority to fill. Of course, it did not, and Cordray was removed, but there is nothing stopping the Democrats from re-appointing him, Brennan said, especially when other appointees may give up valuable Congressional seats.
James Huber, a partner at Global Legal Law Firm specializing in collections, believes that even if the Senate is somehow blue and passes regulation, that MCAs that are playing by the rules would benefit. The MCA business was born under the Obama administration during the last financial crisis, and if Biden beefs up the CFPB, it would only hurt payday lenders, Huber said.
“It certainly flourished under Obama, so one might think now that it’s got its foothold and it’s here you can almost guarantee that it’s going to continue to do really, really well when there’s stricter regulation,” Huber said. “Your typical deBanked cash advance technology company: I think they’re going to do well with their bread and butter product…”
Huber said that especially when we’re seeing businesses hurting for cash right now, b2b finance will thrive. Huber was worried about Biden’s talk about bankruptcy reform, however.
“Biden’s talked about bankruptcy reform, to make it easier for people to go through bankruptcy, and yield assets like their houses and their cars and things that,” Huber said. “That’s a concern; that would mean that you’re fraudulently applying for a loan, and that’ll be accepted. It slows down collection efforts; our main role in the MCA business is on [defaults].”
Katherine Fisher, a Hudson Cook partner who, alongside Brennan, has deep experience in MCA representation and compliance, agreed with her colleague that funders need to make sure they keep an eye open toward compliance when it comes to regulation.
“Firms that have not focused on the regulatory process need to start, and companies that have looked at it need to revisit it,” Fisher said. Funders should “expect to be comfortable if they are asked to describe how they comply and prepare to do so.”
But beyond that, she sees no doomsday event on the horizon; even if the Senate is no longer Republican-controlled, it would be up to the FTC and CFPB to set the tone. If the CFPB, for example, pushed for data collection under 1071 of the Dodd-Frank Act, it might signal a more attentive regulatory environment for MCA and factoring.
Compared to 2008, when the last Democratic administration took office, MCA wasn’t on the radar, Fisher said. Now that it is on the map this time around, especially after MCA funders proved how vital they were to the SMB market during the pandemic, there will be more attention on B2B transactions.
But firms only need to think of this as a chance to make sure their practices are healthy, and most of the industry has already shown signs of doing so. Fisher pointed to the FTC’s small business finance forum last year, which included a panel of MCA representatives at the table.
“I don’t think it is a scary time. It’s an opportunity for MCA to improve their processes, make sure they are following the law,” Fisher said. “They don’t need to be afraid but need to batten down. Much of the industry has already done that, the MCA industry has been focused on adopting good practices.”
Coming to you from the heart of Dallas, Texas is a digital payroll startup, Gig Wage, that received a $7.5 million Series A funding round just last month. The founder, CEO, and writer of The Sport of Sales, Craig J. Lewis, talked about his goal to make it easier for 1099 gig workers to get paid.
Lewis made $10 million in payroll tech sales before going on to lead a firm that has seen 30% month-to-month growth this year, during a pandemic no less.
“We help businesses pay independent contractors, but because we’re so tech-centric, it’s evolved beyond just payroll,” Lewis said. “What we ended up building was financial infrastructure for the modern workforce. We help businesses get money from their customers to their contractors as fast and as flexibly as possible.”
The way Gig Wage does this, Lewis said, is by offering an online platform for the hybridization of payroll, payments, and banking from a single login. Businesses can manage their payroll needs for 1099 workers, then shift to payment needs quickly, through direct to debit, all major cards, bank transfers, and accounts receivables.
“One of the only- the only platform in the world actually that has embedded banking into payroll and payments, which is what kind of allows for this speed and flexibility that we offer,” Lewis said. “We’re like B to B to C: We help the businesses with technology and operational excellence, and because independent contractors are separate from the workplace, we provide tools for them.”
Lewis has years of experience in the payroll space- starting as a salesman for ADP small business payroll products back in 2008. Realizing he had a passion for payroll tech and getting customers the best services possible, Lewis went on to learn anything he could about the industry. Selling $10 million in software while moving across the country, Lewis landed in Silicon Valley, where he studied what it took to start a company.
“I was just awed how they thought about technology and products and company building,” Lewis said. “And I vowed to bring that to the payroll industry.”
Lews joined a startup, learned the Silicon Valley way of creating a company through an African American tech acceleration program. In 2014, Lewis founded Gig Wage to do something disruptive in the payroll space.
As Gig Wage attests, disruption is what the 1099 gig industry needs at the very least. Lewis believed the gig economy was going to keep growing when Gig Wage started. As he watched, the gig economy ballooned into a $2 trillion industry with an estimated 65-75 million person workforce. These workers suffer from an outdated payroll system, losing an estimated 2-20% of their income to flaws in the payments system Gig Wage found.
“With the maturation of Uber, Lyft, Postmates, Doordash, Grubhub, Upwork, all of these kinds of gig economy freelancer companies, we had great growth going into 2020,” Lewis said. “In Q1, we were set up to raise our series A, and then March happened, and the terms got pulled off the table.”
But when the dust settled after those first shutdown weeks, Gig Wage looked at the damage and found the skyrocketing unemployment rates and furloughs had only accelerated their growth as a company.
“The gig economy was right there waiting on the workforce to provide opportunities to earn, and we were positioned perfectly to help people compete for that talent and pay people in a modern way,” Lewis said. “The pandemic has been a huge growth accelerant for us, and we think those tailwinds will only continue.”
Those winds of success came during a time of protest. Amplified in the pandemic’s backdrop, the country was waking up to the unequal disenfranchisement black people faced. Only 1% of black founder entrepreneurs ever receive VC funding, and Lewis said he is proud to have raised a significant round, given that unfair stat.
“With so much controversy and negative energy around black people in general,” Lewis said. “I think putting this positive story out there and showing this black excellence, black tech, I think it’s super important, and it’s been something that I’ve embraced. We’ve been able to be a part of putting something extremely powerful and positive into the market.”
America is finally waking up to realize something Lewis said was obvious, that black people matter, even though it can be controversial to say so. He hopes his success can help others but affirms the funding round was no charity drive.
“This is a great opportunity for us to be clear about the fact that like hey, we’ve been working on this, we’ve built a good business and a good technology,” Lewis said. “This is a big business opportunity for our investors and us. It wasn’t charity, right: This isn’t like, oh he’s black, give him some money.”
The successful funding round shows confidence in the Gig Wage platform from Green Dot, which will allow Gig Wage to offer bank accounts and debit services to independent contractors. Green Dot is one of the only fintechs with a national banking license, Lewis said, and Gig Wage is joining the Banking-as-a-Service direction that the fintech industry is headed.
Beyond payroll, Lewis can’t wait to offer other financial products to businesses as the company grows.
“When you think about the gig economy, it’s important that people get paid fast and flexibly: You’ve got to have the cash to be able to do that,” Lewis said. “We see some unique opportunities to get involved in the lending space down the line as well as we continue to build out our technologies.”
Tel Aviv, Israel – November 25, 2020 – Become, the leading online platform for small and medium businesses to find and optimize their funding solutions, announced today it has released a new Shopify app offering ‘BeProfit’.
With the expansion of the ecommerce landscape in light of the coronavirus, Become noticed the need for a single intuitive dashboard that ecommerce sellers can use to track and manage their profit and expenses. With BeProfit, Shopify sellers across the globe can now trace their profits in real time and discover what areas of their business they can optimize to increase their bottom line.
“Creating BeProfit has been a big part of our ‘pivot strategy’ during COVID-19. Building a Shopify app is a totally new and exciting realm for Become,” said Eden Amirav, CEO and Co-founder of Become. “Although offbeat, BeProfit falls in line with our underlying mission – to create a better world of funding for businesses and essentially help business owners become more. Being more profitable is not only something all businesses aspire to achieve but it is also something that will make a business become more fundable down the line.”
With many e-commerce sellers struggling to calculate, map and understand their profits, BeProfit calculates and organizes everything for them in a process that takes a matter of minutes. The app enables sellers to know exactly how much they’re making and spending, and more importantly on what. The dashboard integrates with a number of external sources, such as shipping service providers, external marketing platforms, and payment processors. This results in both visual and dynamic financial reports that update in real-time.
Noam Sinansky, CEO and Co-founder of Spire Jewelry – one of BeProfit’s first users said it’s “the first app that really manages to put in order all the financial information of my store! The app helped me get rid of complicated excel files, it just displays the information in a convenient, simple, and accurate way.”
To learn more about BeProfit, visit apps.shopify.com/beprofit-profit-tracker
Become, is the leading online platform for SMBs to find and optimize their funding solutions. The company uses its proprietary technology to nurture each business throughout the funding cycle. Become is rapidly growing with near 200,000 loyal business owners registered through its platform. The company has built an ecosystem of more than 50 leading lenders and partners and has facilitated over $285 million in tailored business loans to date.
Become’s latest service is a Shopify App “BeProfit”, organizes complex data into an intuitive and interactive dashboard. Shopify sellers can easily track their profit and expenses to see which areas of their business needs improving in order to become more profitable.
Become is backed by Benson Oak Ventures, Magenta Venture, Viola Credit, RIO Ventures Holdings, Entrée Capital and iAngels. The company has offices in San Francisco and Tel Aviv. For more information, visit: become.co.
There has been fast-growing demand for digital finance products this year, according to the Smarter Loans Annual State of Canadian Fintech study. The report surveyed more than 2,500 users of the Smarter Loans site.
The findings show an accelerated shift to digital transactions, which Smarter loans co-founder Vlad Sherbatov attributed to a pandemic-acceleration of the tech-leaning trends that were already coming.
“One of the central insights from this year’s study is the overall increase of fintech adoption and lending,” Sherbatov said. “We’ve also noticed the fact that people are just much more likely to manage their finances online today than they were at this time 12 months ago or a year ago.”
Intending to gain insight into Canada’s fintech industry, Smarter Loans began sending questionnaires to their users starting in 2018.
“We survey some of the people that flow through our website that have used a fintech lending product in the past 12 months, we ask them questions about their experience,” Sherbatov said. “The purpose is to extract insights so that we can help push the industry forward and improve it.”
Even just two years ago the industry was a much smaller space but has ballooned since, and the Smarter Loans survey has become a one-of-a-kind focus on Canadian fintech markets. Featured with this year’s results is commentary from Canadian industry leaders like the Canadian Lenders Association, and deBanked’s own Sean Murray.
“It’s become a bit of a staple in the lending industry,” Sherbatov said. “Because it’s the only piece of research in Canada that is laser-focused on fintech lending.”
With three years of data to compare, Sherbatov said he could see a significant increase in online activity. Part of this is just due to where the world is heading, as Sherbatov described the younger generations just stepping into the financial world.
“This is something that’s been happening for years; this is a trend that has started a long, long time ago,” Sherbatov said. “For younger generations, the way that they approach financial products and companies is very different from someone in my generation or older. Online is the standard of doing business, on-the-go, and mobile is the standard of managing your financial affairs.”
Fintech in Canada, Sherbatov said, tends to lag behind the growth of the fintech industry in other countries but is on the rise due to the Coronavirus. The digital adoption trend was pushed forward, as some customers that had been reluctant to bank online were forced to do so by necessity. Now, these changes to the way business is transacted are here to stay, Sherbatov said.
Like the surge in eCommerce activity, people are going online to make financial transactions.
“You go to Amazon to buy laundry detergent, and you go online to open up a checking account to pay some bills,” Sherbatov said. “Everybody needs financial services, just like everybody else needs household items; it’s how we’re going about obtaining them. This has changed and has accelerated due to Covid.”
“As Canadians stayed home longer, adoption of fintech products has accelerated dramatically,” the report says, accelerating trends that had already been developing for years. The data is based on survey results submitted by nearly 2,600 fintech lending customers.
While there are dozens of important takeaways, respondents indirectly signaled how valuable it is to be among the brands that are found first by borrowers.
That’s because loan applicants said that they researched fewer lenders than ever before (35% only researched 1 or 2 lenders before applying) and they spent less time researching lenders than ever before (31% said they spent less than 1 hour researching). Furthermore, 51% of respondents said that they only applied with a single provider.
This approach worked. Of those that got approved, 89% of respondents said that they were satisfied or very satisfied with their loan provider.
The trend should signal to lenders that borrowers may simply come to expect a satisfactory experience regardless of where they apply and that there is tremendous value in simply being the first 1-2 lenders that a prospective borrower considers.
And hint hint, it pays to be easily discoverable online. Fifty eight percent of respondents said they discovered their loan provider through online search.
Over the past several months the state of the economy has been by no doubt uncertain. With unemployment hitting record highs and Coronavirus cases still on the rise, business owners all across the country have been faced with many difficult decisions regarding their livelihood.
Finding business financing options during these uncertain times can be challenging and risky to not only business owners, but the banks and lenders they choose to work with.
ROK Financial truly understands the uncertainty a business owner feels during these current times. Having derived themselves from a company split back in August, the team is helping other business owners just like them navigate these unchartered waters.
“We have been working tirelessly with our lenders and partners over the past several months discussing different ways we can continue to better service our clients.” Says CRO, Patrick Manning of ROK Financial “The relationships we have built over the years allows us to become quite versatile with our product offering, in turn allowing us to better serve our business owners. That is why we are extremely excited to announce our exclusive partnership with Doug Hood, SBA Loan Consultant LLC. This unique partnership opens up direct SBA access to clients for SBA products $350,000 and above.”
Doug Hood has been facilitating SBA Loans for more than 35 years, resulting in more than $20 million in SBA Loans distributed to business owners annually. Hood said he connected with ROK via LinkedIn, “I’m on Linkedin way more than I should be, we connected at 10 or 11 o’clock at night, and we hit it off.” Says Hood. Excited at the fact that ROK offers short term financing that Doug himself would now be able to leverage in addition to his SBA Loan offerings for his clients was a win-win.
Doug now sits as the official SBA Loan Consultant under the ROK Financial umbrella for deals $350,000 and above. This unique relationship provides greater opportunities for business owners from purchasing existing businesses, refinancing existing debt, starting a business and much more.
“The worlds of Fintech and SBA have collided for the greater good” says Manning, “streamlining and modernizing a once antiquated process, which eliminates the frustration that comes along with long-term lending.”
Andrew Luong said it all started seven years ago in San Francisco, just out of graduate school investing in real estate with his spare time on the weekends. Today, his startup Doorvest manages more than $20 million in real estate assets.
“I wanted to look for an avenue to put the money that I had earned from my day job to work,” Luong said. “The goal was to seek out some income security, build a long-term nest egg, hopefully, some passive income to support my life.”
That avenue turned out to be real estate. Luong thinks more people should have the option to invest in the estimated $3 trillion single-family renting market, now more than ever.
A second wave of infections is sweeping across the nation, and with shutdowns looming and business growth on hold, many face a familiar question:
What can I do to make more money?
Luong believes Doorvest has an answer. The firm offers what Luong calls a Democratized way to invest in real estate, entirely online.
Customers can invest up to $100,000 on the platform. Luong and his team of real estate flipping specialists buy, refurbish, and then rent properties, paying back the rent revenue to investors. Luong said Doorvest only gets paid when the properties are profitable, and the reported average annual return on investment is 18%.
The idea came about when Luong and co-founder Justin Kasad tried to find a better way to invest.
Like his peers back in San Francisco, Luong had tried his hand trading stocks. Many of his friends had Robinhood or high yield savings accounts, and were even trading cryptocurrency- but none of those options were what they were looking for. Real estate felt like that next step, but there was a large process to go from cash investment to payday:
“From identifying a mortgage to underwriting, looking through offers, ultimately an offer that sticks, then you’re figuring out how to find a mortgage financing, how to get homeowner insurance,” Luong said. “Then you’re closing on this thing, take the title, and you’re figuring out how to lease it out, how to manage your residents, and then ultimately, maintenance and bookkeeping.”
With a long, dizzying list of steps, all with uncertain outcomes, it is no wonder a lot of people are put off by that risk, Luong said.
“When my good friend and co-founder Justin and I went through that long list of items, it dawned upon us that if we could deconstruct real estate investing and rebuild it in an online frictionless way, we could bring it to the masses,” Luong said. “We see real estate as a vehicle to funnel people toward financial security.”
The pair got a group of experienced real estate investors and partnered with mortgage providers and renovators to build a platform to handle all of the steps it takes to turn cash into rent income returns. Doorvest will run every step of the process, including property management, while updating investors at every step of the way.
The firm currently focuses on the Houston rental market, Luong’s long term bread-and-butter area, but plans on renting in other markets in the future.
The platform has been in the works for years, but finally launched last year and immediately had to deal with the pandemic, but Luong said Doorvest made it through so far with success.
“It was definitely an experience, back in mid-march Justin and I were like crap, I think we’re done,” Luong said. “Public equities markets were tanking; we’re a young company without a lot of cash. I think people saw the volatility of the public equities market. In that span of two weeks it went down 40% or so and I think that led a retreat towards perceived reliable asset classes.”
To some, investing in Doorvest was perceived as more reliable than a tanking stock market, and after initial fluctuation, the firm is on the up. In his experience, Luong said the real estate market would continue to push toward suburban areas outside of major city centers as the pandemic continues.
All the while, everything is moving digital. As the company evolves, Luong is excited to offer new products to customers, using real estate as a vehicle to build a banking platform or mortgage platform to service a growing smorgasbord of online real estate options.
“We as a company made a bet three to five years out: we believe that real estate will be transacted entirely online,” Luong said. “Historically, you’d show up at a house, walk around, etc. Due to COVID, people weren’t going out, weren’t shaking hands: The adoption of technology to look at a home entirely online just became a lot more natural. Because of that, we’ve had really strong customer demand and fundraising.”
Fintech IPOs are back. Affirm, a fintech company whose platform offers “a point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app,” is the latest company to file for an IPO.
Affirm’s S-1 was filed earlier today, revealing that they intend to raise $100 million. The company generated $509M in net revenue during its fiscal year ending June 30 and a net loss of $112 million.
|Fintech||Date Filed||Date Public||Amount Raised|
Unrelated to fintech, but still “tech” are pending IPOs for DoorDash and Airbnb.
Elliot J Dabah, CEO of NYC-based Merchants Cash Partners, LLC, recently passed away. Known throughout the merchant financing industry, friends and colleagues began collecting kind words to reflect on his life to be able to share them here.
Elliot Ashkenazie, his business partner and best friend, said “Elliot Dabah would step up and help anyone in need whether that be his own employee, another ISO, or a complete stranger on the street. He didn’t keep any secrets so he would have an advantage over others, he simply paid it forward and helped the community as a whole benefit from it. Merchants Cash Partners will work tirelessly to carry on his legacy and his values.”
“Elliot Dabah was the heartbeat of the Financial District and he was an integrated part of my life, both professional and personal,” said Gigi Russo. “Not only did Elliot and I live three blocks from each other, but I first had the privilege and pleasure of meeting him while I was working for deBanked, at CONNECT San Diego. We quickly became close friends. He truly never took advantage of our tight knit friendship. His professional support was a reflection of his character— a respectable person that respected his family, friends and business associates. Elliot wanted everyone to succeed. He believed that friends and business colleagues should support one another to build a viable network.”
Tom Dool of Power Funding, said “Of all of the offices I’ve ever visited, I can honestly say that no other partner of mine compares to Merchants Cash Partners. From the moment I met both Elliots, they were inviting. I could tell right away that they had a special bond of shared enthusiasm, honesty, generosity, thoughtful, caring people.” He adds, “Elliot [Dabah] lived life with such a genuine love for people and getting to know people, discussing higher level ideas, sharing feelings. He was one of the best and I’ll never forget him.”
“Elliot was one of the most welcoming people I had the pleasure of knowing,” says Colt Kucker of Libertas Funding, “and always tried helping out whether it be a customer, myself, or anybody in need. He was a hard worker and will truly be missed by all he came across.”
Justin Friedman of Enova SMB, described Dabah, “Smart, strategic, urgent, generous and wise are a few words to describe Elliot. He was universally popular and a known professional in our industry, which isn’t common to come by. He cared about his customers and business relationships. Elliot’s presence in alternative lending was a positive one and he will be remembered for exactly that.”
Ben Lugassy of SOS Capital states that he was “Always smiling and enthusiastic, Elliot was the embodiment of joyful. A friend with tremendous respect and gratitude, he will always be remembered and in our prayers.”
Paul Boxer of Velocity Capital Group added, “Every-time I met Elliot he had the largest smile, always happy to talk shop and discuss the industry. He was very knowledgeable and had a wealth of information, he will surely be missed.”
Ken Peng of Elevate Funding recounts that Elliot, “was always great to work with. He was always very friendly and understanding when we did review any of his files. He will be missed.”
Gigi Russo, who was instrumental in putting this tribute together, further added that Elliot “treated everyone he came into contact with as a friend.” He has “a sincere, dignified, and affable reputation that will follow him after his passing. He will surely be remembered for supporting his colleagues, clients, business acquaintances, and network. The legacy Elliot has left behind is simple: Respect one another. Support one another. Honesty and hard work are necessities of success.”
Part of Elliot’s legacy is the company he built. Merchants Cash Partners, despite the pandemic, was so successful this year that it outgrew its office space.
“Elliot had a revolutionary style of making this industry a community,” says his partner Ashkenazie. “He referred clients and prospects alike to small firms and national firms, expecting nothing in return.”
Coincidence would have it that a photo of Elliot at a deBanked event was often used in event marketing promotions. As to how that picture came to be used so prominently, deBanked President Sean Murray said that “Elliot embodied the community we were trying to portray. A nice young business professional who radiated positive energy. Who is part of this industry? It’s guys like Elliot. That’s what we wanted everyone to know.
“Elliot totally noticed how often we were sharing his photo,” Murray said. “He told me that he thought that was pretty cool.”
In April of this year, Threadgill’s – a legendary Austin music venue and beer joint that, in the 1960s, famously launched the career of blues singer Janis Joplin — turned off the lights and pulled the plug on its sound stage.
A converted gasoline station, Threadgill’s had been a rollicking music scene since 1933 when musician and bootlegger Kenneth Threadgill secured the first liquor license in Texas after Prohibition. His juke box was crammed with Jimmie Rodgers songs and Threadgill himself famously sang and yodeled Rodgers’ tunes.
For generations of students at the University of Texas, Threadgill’s was a rite of passage.
“The first time I went to Threadgill’s was in the fall of 1968, when I was a freshman at UT,” recalls Perry Raybuck, a songwriter-folksinger and retired government worker who, as a member of the Southwest Regional Folk Alliance, played the stage in 2018. “It was the beginning of an education for me,” he adds. “I had been a Beatles and rock n’ roll kid and it opened me up to different music styles. I became a convert.”
In 1981, Threadgill’s was taken over by another acclaimed club owner, Eddie Wilson, who previously had been the proprietor of the Armadillo, a fabled music venue. Wilson began to actually pay musicians – Threadgill had compensated them mainly with free cold beer – and installed a circular stage.
It was Threadgill’s and an assortment of funky clubs and stages with names like the Soap Creek Saloon and Liberty Lunch helped put Austin on the map as “The Live Music Capital of the World.” The city remains home to the widely acclaimed television program “Austin City Limits” on PBS and the internationally renowned South by Southwest festival, which was canceled this year amid fears of a “superspread” of the coronavirus.
“Live music,” says Laura Huffman, chief executive at the Austin Chamber of Commerce, “is why people come here. It is a central component of Austin’s cultural and economic life.”
Omar Lozano, director of music marketing for Visit Austin, the city’s main tourism organization, says: “We have close to 250 places in the greater Austin region where you can hear live-music, although it’s closer to 50-70 on any given night. During South by Southwest, no stone is left unturned — everything becomes a stage: parking garages, grocery stores, housing co-ops. There are also four or five stages at the Airport, which helps liven up the mood.”
But that identity is being put to the test. So far this year, Austin has lost a raft of live music venues. Among those joining Threadgill’s in honky-tonk heaven since the pandemic struck are Barracuda, Plush, Scratchhouse, Shady Grove, and Botticelli, all of which provided niche audiences to both established musicians and up-and-coming acts.
The roller-coaster ride of government mandated shutdowns followed by a limited re-opening in the spring and another shutdown since July fourth is making life miserable and untenable for both club owners and already hardpressed musicians and artists, says Marcia Ball, a piano player and blues singer.
Ball, who was named by the Texas Legislature as “2018 Texas State Musician” and whose musical style was once described by the Boston Globe as “mixing Louisiana swamp rock and smoldering Texas blues,” told deBanked: “There was already a limited amount of opportunity for musicians to perform and monetize their work in Austin, so it has always been necessary to travel to make a living. But we still depend on a thriving local scene, and we’re losing that when key venues like Threadgill’s disappear.”
Adds Graham Williams, a prominent Texas promoter of touring bands: “These venues and bars are vital to the music ecosystem. Local bands and cover bands need hangouts, even if people are not buying tickets. They’re places to play every night of week.”
While unheralded outside the Austin scene, the local music joints were often a port-of-call for out-of-town promoters and nightclub owners checking out Austin talent – “most notably Barracuda (which) had super-popular acts and was like a hipster garage venue,” says promoter Williams. “A lot of touring bands played there on their way up.”
A July study by the Hobby School of Public Affairs at the University of Houston found that the city’s live music industry is in desperate straits. Sixty-two percent of live music spots and 55% of the bar-and-restaurant businesses reported to researchers that that they can endure for no more than four months, making them the most vulnerable of 16 industries surveyed.
And the situation has become “even more ominous” since the report was published, explains Mark P. Jones, a political scientist at Rice University in Houston and a lead researcher on the Hobby study. “That survey finished polling two hours before all bars and restaurants closed back down,” he says. “Everything people were saying was when bars were at 50% capacity. That’s a best-case scenario.”
Austin’s experience amid the Covid-19 pandemic mirrors what is occurring nationwide as bars, nightclubs and music halls in myriad cities and towns experience similar trauma. In Seattle, Steven Severin is co-owner of three nightclubs – Neumos, Barboza and recently opened Life on Mars – all in trendy Capitol Hill, the hub of the city’s club and live-music scene. He reports that he is barely holding on thanks to some help from the city and a sympathetic landlord who is “a big music advocate.”
“He knocked down the rent a little bit,” Severin says of his landlord, but the situation is dire. “We just had a fifth venue, Re bar, close at the end of August,” he says. “It was a punch in the gut. This could be me.”
The Bitter End in Greenwich Village is also keeping its head above water despite not opening its doors since March. The nightclub has a storied past: owner Paul Rizzo recounts that it is where pop singer Neil Diamond got his start and where “everyone from Curtis Mayfield to Randy Newman” has performed since its opening in 1961. But the club is silent now since the pandemic overwhelmed the city’s hospitals and made New York the epicenter of sickness and suffering during the spring. So far the club is getting help from a landlord’s forbearance and loyal musicians.
Peter Yarrow (the “Peter” in the bygone trio Peter, Paul and Mary), donated a streamed concert to patrons who contributed to a fundraiser that raised more than $50,000. And grateful local musicians also put on a benefit directing people to a Go Fund Me page on the Internet that raised another $16,000. “We’re a major venue for local musicians,” Rizzo says. “We should pull through.”
It’s in their self-interest for artists to do whatever they can to keep the doors open at a club like The Bitter End. “These days because of the last two decades of declining record sales — live music is the bread and butter of a musician’s income,” says journalist Edna Gundersen, a recently retired, 28-year-veteran of USA Today. “That’s true whether it’s a local entertainer or an international superstar.” (Gundersen earned the reputation as Bob Dylan’s favorite journalist; it was she who scored his only interview after he won the Nobel Prize for literature in 2018, publishing his eccentric musings in the The Telegraph of London and breaking the news that he would indeed accept the prize.)
“Touring has been crushed,” Gundersen adds, “and festivals have been canceled. So people doing the circuit and clubs are gone for all intents and purposes. Streaming — while initially up — is down because people aren’t listening to music in the gym or in their cars. Physical record sales are also down because people aren’t going to stores. All of this is just killing musicians.”
The Paycheck Protection Program, the multi-billion, multi-tranche aid package for small business which Congress authorized as part of the CARES Act in March, has provided some funding for the live-music and entertainment industry. But because of the PPP’s requirements that only 40% of the funds can be spent on rent, mortgage and utilities, which are major expenses for nightclubs and music venues, the program has largely been a disappointment.
Hoping to win attention and assistance for their plight from the federal government — “We’re the first to close and the last to reopen,” Severin says — live-music entrepreneurs like himself and Rizzo and more than 2,800 club-owners and promoters across the country have banded together to form the National Independent Venue Association.
Their membership includes independent proprietors (no corporate members allowed) of saloons, cabarets and concert halls as well as theaters, opera houses and auditoriums from every state plus the District of Columbia. To help plead their case with Congress, the organization hired powerhouse law firm Akin Gump Strauss Hauer & Feld, the largest Washington, D.C. lobbying firm by revenue.
NIVA also blanketed Congressional offices with two million letters, e mails and correspondence generated from hordes of fans and performers. Among the many scriveners are a slew of boldface names: Mavis Staples, Lady Gaga, Willie Nelson, Billy Joel, Earth Wind & Fire, and Leon Bridges. Comedians Jerry Seinfeld, Jay Leno and Jeff Foxworthy have also penned notes to lawmakers championing NIVA’s cause.
Their message: without federal funding, 90% of independent stages will go under over the next few months. “The heartbreak of watching venues close is that once a building is boarded up, it’s not going to be a music venue any more,” warns Audrey Fix Schaefer, communications director at NIVA. “They operate on thin business margins to begin with and they’re too hard to develop.” For touring acts, each city stage is “an integral part of the music ecosystem,” Schaefer explains. “When artists finally do get back on the tour bus, they might have to skip the next five cities and go on to the sixth.”
Thanks to the bi-partisan efforts of Senator Amy Klobuchar (D-Minn.) and Senator John Cornyn (R-Texas), NIVA’s campaign has gotten traction. The unlikely couple have teamed up to author a rescue bill, known as the Save Our Stages Act. If enacted, it would establish a $10 billion grant program for live venue operators, promoters, producers, and talent representatives.
The legislation would provide grants up to $12 million for live entertainment venues to defray most business expenses incurred since March, including payroll and employees’ health insurance, rent, utilities, mortgage, personal protection equipment, and payments to independent contractors.
NIVA’s chief argument for the legislation is coldly economic rather than sentimentally cultural. The organization cites a 2008 study by the University of Chicago that spending by music patrons produces a “multiplier effect” for the broader economy. For every dollar spent by a concert-goer at a live performance, the Chicago study determined, $12 in downstream economic activity occurs.
Explains Scott Plusquellec, nightlife business advocate for the City of Seattle: “You buy a ticket to a show and the direct economic impact of that purchase is that it pays the artist, bartender and the club itself as well as the band, advertisers, and promoters. The indirect economic impact,” he adds, “is that after you bought the ticket, you went to a barber shop or a hair salon to look good that night. You might also have dinner, go to a bar for a drink and tip the bartender. That’s the whole the idea of a ‘multiplier.’”
In Austin, that economic logic is an article of faith with city burghers, asserts Lozano of Visit Austin, who reports that live music in the capital city is roughly a $2 billion industry. To promote live music, the tourism bureau sponsors such endeavors as “Hire an Austin Musician.” That program, Lozano says, “sends musicians around the U.S. to represent us during marketing season.” In another promotional campaign, Visit Austin arranged for singer-songwriter Julian Acosta to play a gig at travel agents’ offices in London when Norwegian Air inaugurated direct flights between London and Austin in 2018. “The U.K. is one of our best markets,” he reports.
Even so, efforts by the business community and the City of Austin have failed to stanch much of the industry’s bleeding. According to its website, the city has disbursed $23.7 million in loans and grants to small businesses and individuals, but slightly less than $1 million of that has gone to live-music and performance venues, entertainment and nightlife, and live-music production and studios.
In late September, The city of Austin’s Economic Development Department released a slide show breaking down how the $981,842 in industry grants and loans – of which $484,776 was provided by the federal government under the CARES Act – were awarded. Most top recipients appeared to be well known nightclubs and entertainment venues downtown or close to the city’s inner core.
The Continental Club on South Congress – a key fixture in the hip “SoCo” strip just over the Colorado River from downtown – appeared to do best. It picked up $79,919 from two programs: $40,000 in the CARES-backed small business grants program, and $34,919 from the city’s Creative Space Disaster Relief Program. Other clubs receiving $40,000 in the small business grants program included Stubbs, The Belmont, Cheer Up Charlies and the White Horse. (For a full list go to: http://www.austintexas.gov/edims/document.cfm?id=347299)
Joe Ables, owner of the Saxon Pub, a major Austin venue for jazz – blues singer Ball hailed it as one of several important Austin clubs “that sustains creative endeavor, especially for songwriters” – was vexed that his grant application was denied by the city “with no explanation.” Ables also voiced dissatisfaction that the city paid the Better Business Bureau a 5% administration fee to handle $1.14 million in relief funds, including determining which applicants were approved. “What would they know about live music,” he says.
Even for clubs that received city largesse, it hasn’t been nearly enough to sustain them. The North Door, which got $15,240, closed for good on September 11 (an ominous day — the anniversary of the attacks on the World Trade Center and the Pentagon.)
Meanwhile, enough clubs and venues were left out in the cold that club owner Stephen Sternschein could tell deBanked just before the slide show was released: “I’ve heard talk of a $21 million grant program but most people I know haven’t seen a dollar of that.”
Sternschein is managing partner of Heard Presents, an independent promoter and operator of a triad of downtown clubs that includes the spacious Empire Garage, which features hip hop and urban jazz, and has space for 1000 music-goers. A member of NIVA, Sternschein describes efforts by both the state and local governments as “woefully inadequate.” Says he: “People are looking to the federal government for answers.”
The diminution of places for musicians to ply their trade is a double edged sword. If Austin loses its luster as a hot music town, it puts the city’s overall economy in jeopardy. Explains Jones, the Rice political scientist: “The difficulty for Austin is that it could lose its comparative advantage. Unlike restaurants, movie theaters or sports events, which people can find just as easily in other cities, the Austin music scene draws capital and revenue from across the country.
“You can go out to dinner in Waco,” he observes, referring to the mid sized Texas city between Austin and Dallas best known as home to Baylor University and its “Bears” football team, fervent Baptist religiosity, and unremarkable night life. “Music brings in revenue to Austin and to Texas that wouldn’t otherwise come here.”
In addition, Jones says, the large presence of “artists, creative types, and freelancers” helps make Austin a strong selling point for “brain industries” to attract talent from the East and West Coasts. “It supports the technology industry by making it easier to recruit employees to live there,” he says. “Austin is an alternative to Silicon Valley. People who are progressive might be hesitant to come to conservative, red-state Texas from California but they’ll come to Austin because it’s culturally cool.”
Austin, which embraces the slogan “Keep Austin Weird,” is on the verge of becoming just like every place else in Texas. Should it relinquish its flavor and charm, it could discourage many of the assorted business groups and professionals from keeping Austin on their dance card as a popular destination for meetings, conferences and get-away trips.
Howard Freidman, managing director at Bluechip Jets, a broker of private luxury aircraft, had an earlier career as a technology industry executive. Partly drawn by his previous experiences with the city, Freidman moved to Austin earlier this year. “It had the same coolness and weirdness of New Orleans — but also with the professionalism of a tech city,” he says.
“Whenever we’d come here,” Freidman adds, “the music was always integral to the Austin scene. Even when you’d go to private parties you’d end up downtown at the club scene on Sixth Street. Austin was always a place everybody liked going to.”But as Austin has steadily been morphing into more of a high-technology center than a live-music town, it’s experiencing a silent exodus of musicians and artists who are being gentrified out of their apartments and Craftsman duplexes. Displacing them are software engineers, website designers and the like, their sleek BMWs and black, tinted-glass SUVs glistening in the parking lots of steel-and-glass corporate centers.
Many of the technology firms – including such needy companies as Samsung, Intel, Rackspace, Facebook, and Apple – have each received tax breaks, grants and subsidies worth tens of millions of dollars from a variety of local jurisdictions. Not only have the city of Austin and Travis Country been beneficent, but adjacent county governments and the state of Texas have provided abundant support. A 2014 study by the Workers Defense Project, in collaboration with UT’s Lyndon B. Johnson School of Public Affairs, reported that the state of Texas showers big business with $1.9 billion annually in state benefits. Most recently, officials with Travis County and a local school district granted Tesla more than $60 million in tax rebates to build a massive “gigafactory” southeast of town near Austin-Bergstrom International Airport.
To house the burgeoning cohort of “knowledge workers,” there are condominium conversions, tear-downs, high-rises and other forms of frenetic real estate development which, in their train, bring higher property taxes, steeper rents, and unaffordable housing.
Add in some of the country’s most snarled traffic, dirtier air, and a growing homeless population, and members of the artistic community are increasingly decamping for smaller satellite towns like Lockhart and San Marcos. Others in the diaspora are abandoning Texas altogether for more hospitable locales like Fayetteville Ark., Asheville, N.C., or Olympia, Wash. “Whatever made anybody think this would be a better town with a million people,” laments blues singer Ball. “This was a perfect town with 350,000. Now we’ve got Silicon Hills, Barton Springs are cloudy, and drinking water’s going to be scarce. Why is this supposed to be better?”
The drop-off in live music and the belt-tightening by musicians is causing third-party pain for people like veteran Austin journalist and publicist Lynne Margolis, whose national credits include stories for Rolling Stone online, and radio spots for NPR. “The public relations aspect of my work has dropped away because artists can’t afford to pay,” she says, “and music journalism is falling by the wayside. It’s hard not to feel to like a double dinosaur.”
Led by bars, restaurants and music venues, on many days the solemn departure of small establishments has the business news sections of Austin newspapers reading more like the obituary page. One hardy survivor is Giddy Ups – a throwback honky-tonk on the town’s outskirts that advertises itself as “the biggest little stage in Austin” – promising “just about everything,” says owner Nancy Morgan, including “country, blues, rock, bluegrass, and soul.” For the past 20 years Giddy Ups has developed a devoted following of musicians and patrons while fending off hyper modernity.
“It has an untouched, back-to-the-seventies, cosmic cowboy vibe,” says local musician Ethan Ford, a guitarist and bass player whose trio, The Slyfoot Family, has graced its stage. “It’s a time capsule,” Ford adds.
Morgan declined to disclose her annual receipts but in 2019, she reports paying out $188,000 in wages to employees, $72,000 to musicians, and $185,000 in combined sales taxes to the city of Austin and to the state. Despite her status as a taxpayer, employer and entrepreneur, she has received no state aid and is disqualified from receiving city pandemic assistance programs, meager as they may be, because she’s located in an extra-territorial jurisdiction.“
Nancy still bartends most nights and does all of the booking,” says Ford. “Her knowledge of the Austin music scene could fill a couple of books. I know a decent fistful of Austin venue owners and she’s about the only one that hasn’t given up, been forced out, or just retired. She’s a dynamo.”
Unless the cavalry arrives for Morgan and other holdouts, though, their musical days may be numbered.
Editors Note: Threadgill’s didn’t make it. The venue “has closed for good, the property has sold, and the building will eventually be torn down,” according to information disseminated for its Last Call Music Series. Its November 1st grand finale show featured Gary P. Nunn, Dale Watson, Whitney Rose, William Beckman, and Jamie Lin Wilson.
The building will be replaced with apartments.
What do small business finance companies think about the reality of a Biden White House? Will there be dramatic regulatory changes, massive new government stimulus, or significant differences in coronavirus policy?
“Not likely,” according to the head of two funders we spoke with. The CEOs of Greenwich Capital Management and Spartan Capital Group seemed to agree that overall, not much would change.
“We don’t expect any major changes to the industry to MCA,” Frank Ebanks, Spartan Capital owner, said. “I don’t think it would be any different than what we saw and experienced under Trump. Some states, some federal organizations attempted to regulate the industry, that’s already on the way, and that might continue: I don’t see it picking up any intensity.”
Ebanks’ firm has been around for four years, funding deals of up to $2 million. In that time, Ebanks has seen states like New York and California pass lending regulation and renewed activity at the CFPB, but never a fed-wide push to take on small business lending.
Nathan Abadi of Greenwich Capital Management, believes there might be short term benefits under Biden.
“In the short term, I think it’s going to be pretty good for people in our industry because under a Biden administration, we’ll see more bailouts go to SMBs than we would in a republican administration,” Abadi said. “If small businesses get bailed out, that means they can make their payments, and everyone is winning.”
He was less optimistic in the area of regulation, however.
“It’s necessary for our industry to have some vetting process and some regulation, as you saw happen with Par recently,” Abadi said. “All these other companies are taking in private investments from multiple investors, not necessarily accredited, and the money kind of goes into a black hole.”
Abadi further said that he thought while regulation is good for those who play by the rules, Democrats can go overboard.
Ebanks, meanwhile, thinks there is saftety in being a B2B business.
“Transactions between two individual companies are hard to regulate, especially when it comes to contracts,” Ebanks said. “That will stand and be around for a long time regardless of the government or who the president is.”
Ebanks continued to point out that an incoming administration would avoid changing anything that might hurt the economy now more than ever.
“I think that the President-Elect will put teams together that will attack the coronavirus situation aggressively and will neutralize it rather than try to live with it,” Ebanks said. “It’ll be tough for a month or two. And after that, it will be sort of back to normal, with just heavy aggressive localized actions.”
PayPal recently disclosed the dollar amount of receivables it had “purchased” between its working capital and business loan program for the first 3 combined quarters of 2020. The figure was $1.5B, down by more than half from over the same period last year. That would seem to suggest that the actual origination figure is probably $1.3B, which is still larger than some of its closest competitors. Numbers from rivals like Kabbage (recently acquired by Amex) and Amazon were not readily available.
For a larger comparison chart, click here.
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The controversial commercial finance disclosure bill that passed in New York in July, has still not been signed by Governor Cuomo.
Technically, the governor only had 10 days to sign it while the legislature was in session and only 30 days to sign it when the legislature closed out its session for the year, which it did in July. Both deadlines have passed. But as deBanked learned in the case of the COJ bill, the clock does not actually begin to tick until the legislature has formally “delivered” the bill to the governor.
That puts the disclosure bill and other bills not yet signed in a state of suspended animation that can carry them through until December 31st. Doing this “is done to ensure that legislation is thoroughly vetted, with extra checks to guarantee that bills are not unconstitutional and that they’ll lead to no previously unforeseen consequences.”
It’s that latter part of that, that has created concern. Even dueling small business lending trade associations disagree on what the consequences will be. The Innovative Lending Platform Association (ILPA), for example, say the bill is almost exactly what they wanted, while the Small Business Finance Association (SBFA) suggests that advocates do not even understand the bill, much less the implications.
ILPA’s CEO, Scott Stewart, told deBanked in July that “the implications are that small businesses, certainly in New York to begin with, but we think throughout the country, will have the opportunity to really see, understand, and compare various different sources and products for financing their small businesses in terms of their expansion and success.”
SBFA’s Executive Director, Steve Denis, meanwhile, responded very soon after by saying that they don’t realize that it will subject them to massive liability and hefty fines.
“We’re for disclosure, we think there should be standard disclosure,” Denis said. “Our message to the Governor’s office is ‘Let’s take a step back.’ The Department of Financial Services needs to look at our industry, they need to get to know our industry. They are the experts that understand the space, they understand disclosure, and they understand what they need to do to bring responsible lending to New Yorkers. And we would like to work with the NYDFS and a broader industry to put forward a bill that’s led by the Governor and the Governor’s office that brings meaningful disclosure and meaningful safeguards to this industry.”
The SBFA later published the results of a study that supports their arguments.
In qualitative testing of 24 small business owners and executives who have experience taking commercial loans, the study concluded participants did not understand what APR was.
APR disclosure, of course, is the centerpiece of the entire bill.
It is still possible the bill’s language could be amended before the governor signs it. It’s happened before.
In 2017, for example, the state legislature passed a bill that would establish a 7-person task force to analyze online lending activity in the state. The bill, dubbed the Online Lending Task Force bill, called for industry participants to serve on it. The final version signed by the governor, however, was completely rewritten to the point that the online lending task force bill had completely eliminated the task force portion of it and no one was allowed to participate in any analysis except for NYDFS.
November 9, 2020, Bohemia, NY – National Business Capital & Services, the nation’s leading FinTech lending marketplace which streamlines the application and approval process for small business owners, today named Joe Camberato CEO. He succeeds James Webster, who has exited the company to pursue new endeavors.
The announcement comes as the COVID-19 crisis has crippled small businesses across America. Not only are business owners challenged with the overwhelming stress of meeting near-term financing demands simply to survive, but they are also tasked with re-imagining how to best position their businesses for growth in the post pandemic ‘new normal’.
“Through booming and challenging times, National’s priority has always been to serve as the go-to source for small businesses to find competitive financing options, revenue-generating services and consultative support to help them at every step of their growth journey,” said Camberato.
“When it comes to small business loan approvals, banks are highly conservative, tending to lend an umbrella when the sun is shining. With COVID-19, the sun is not shining. We recognize how crucial it is to provide access to competitive financing options to help businesses survive, but they also desperately need help to rebuild and grow.”
In a recent survey of small to mid-sized businesses by CBIZ, over half (51%) of respondents reported a significant decrease in sales due to the pandemic. Smaller businesses have been disproportionately impacted, with nearly half of businesses with 1-4 employees reporting a significant or severe impact, and 37% of businesses with 20-49 employees noting a significant or severe impact.
In taking reins as CEO, Camberato is steadfastly committed to National’s vision to Innovate the Way Entrepreneurs Grow by offering essential resources beyond just financing. His plans include enhanced business growth consulting and coaching offerings, which he anticipates will be a dire post-pandemic need, but is currently a significant gap across the competitive landscape.
Michael Gerber, a mega bestseller who was named “The World’s #1 Small Business Guru” by Inc. Magazine, commended National’s efforts toward empowering small business owners by providing streamlined access to capital, among other game-changing resources.
“I’ve admired Joe since the day we met. He shares my mission to transform the state of small business and has unmatched knowledge of small business lending practices. His personal success building a scalable business, and passion for helping entrepreneurs and small business owners invest their efforts in the right areas to create sustainable, growth-oriented companies have been invaluable as we work together to co-author our new book,” says Gerber.
Gerber is currently collaborating with Camberato to write “The E-Myth Money Book”, which will educate small business owners about the various avenues they can take to obtain and successfully utilize small business financing while growing their businesses.
As one of National’s original founders and previous President, Camberato spearheaded significant technological innovations, implemented process enhancements, and helped build an amazing company culture on his mission to simplify the previously laborious business financing process for small business owners, securing over $1 billion in financing in the process.
Now, business owners can apply in one simple place and securely connect their bank accounts to receive tailored financing options in minutes, with funding following in as little as a few hours.
Beyond streamlined technology and processes, Camberato credits National’s success to its award-winning team and applauds their role in helping business owners get back to business amid the pandemic.
“By taking the time to understand business owner challenges or opportunities, our amazing team has established the National brand as a trusted source of capital and counsel. I couldn’t be prouder of my team’s dedication to helping small business owners, but also for their significant role in helping our clients overcome the COVID-19 crisis and get back to business. They rally behind our mission to be the trusted resource business owners turn to for financing, revenue-generating services, and business coaching and will play a pivotal role as we add new offerings to help businesses not only survive but thrive and grow.”
Camberato regularly shares his insights about FinTech lending, access to capital and small business growth strategies through his seat on the Forbes Finance Council and his YouTube channel, GrowByJoe. He is also an active member of the Young Presidents Organization (YPO) and is actively involved in giving back, locally and nationally.
ABOUT NATIONAL BUSINESS CAPITAL & SERVICES
National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.
Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services. We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!
SOURCE National Business Capital & Services
“$100,000, we can make that work,” said Ryan Metcalf, head of Public Policy Affairs at Funding Circle. “But we can help a lot more small business if it was $50,000.”
Metcalf was referring to a recent change in the minimum loan amount in the Main Street Lending Program (MSLP.) Just recently, the Federal Reserve lowered the minimum loan amount for the MSLP for a third time, to $100,000. The change was intended to broaden the underused Cares Act aid facility but it might not be enough.
Though changing the program days before, at a press briefing Thursday Fed chair Jerome Powell said SMB aid projects like PPP and the MSLP were up to the gridlocked House and Senate.
“The Fed cannot grant money to particular beneficiaries; we can only create programs or facilities to make loans that will be repaid,” Powell said. “Elected officials have the power to tax and spend, and to make decisions about where we as the society should direct our collective resources.”
Despite Powell’s talk of inaction in the face of an undecided congress, Metcalf said the Fed’s actions have proved that changes can be made to existing programs. Metcalf has been fighting for changes to MSLP for months on behalf of the small business lending community, he says.
In July, Metcalf, in partnership with the Innovative Lending Platform Association and Marketplace Lending Association, wrote a letter to the fed to argue for changes to the MSLP.
The letter argued that the Cares Act made non-depository finech lenders eligible to participate in PPP lending. Though these lenders saved millions of jobs, they were not allowed to lend through the MSLP facility.
Even if they could, the minimum loan size was still too large for “main street” American businesses that needed capital. The letter advocated for a lower minimum of $50,000, allow lenders that were approved for PPP to lend in the MSLP, and create a Special Purpose Vehicle for fintechs.
Metcalf said the Fed has only responded, “that is not under consideration.”
So far, 400 borrowers have taken out $3.7 billion in loans, of the $600 billion allocated. The program offers Fed backed five-year loans with differed principal and interest payments and minimal rates. With the facility’s deadline approaching Dec 31 and no changes in sight, Metcalf said the program’s vultures are circling.
If new aid, revisions, or at least an extension is not passed by when the government is funded Dec 11, Metcalf said the program might be finished.
Back in September, Powell testified before Congress that lowering the minimum any further wouldn’t change the adoption rate.
“We have very little demand below a million, as I told the chair a while back,” Powell said. “We’re not seeing demand for very small loans. And that’s really because the nature of the facility and the things you’ve got to do to qualify, it tends to be larger sized businesses.”
Mnuchin has consistently argued that grant programs like PPP would most benefit smaller firms. Metcalf said this was only the case because the MSLP facility has left out smaller firms and alternative lenders that need the capital.
“My response to that was no, there’s been no uptick in your program because the requirements of the program are not attractive enough to make it workable,” Metcalf said. “Don’t scrap the entire program altogether; look at the proposal that we sent you back in July and work with us on amending the facility.”
Upstart, the online personal lender that uses non-traditional data like a college education, job history, and residency to evaluate borrowers, is moving forward with an IPO.
The company revealed its financial statements in an S-1 filed on Thursday. In 2019, Upstart generated $164.2M in revenue and had a net loss of $5M. For 2020 through Sept 30th, revenue was at $146.7M with a net income of $4.5M.
The company said that in 2020, 98% of its revenue was generated from platform, referral and servicing fees that it receives from its bank partners. Their bank partners “include Cross River Bank, Customers Bank, FinWise Bank, First Federal Bank of Kansas City, First National Bank of Omaha, KEMBA Financial Credit Union, TCF Bank, Apple Bank for Savings and Ridgewood Savings Bank.”
Upstart borrowers tend to have limited or no credit history, which is where its AI-driven models with 1,600 variables come into play.
“Our bank partners have generally increasingly retained loans for their own customer base and balance sheet,” the company wrote in its S-1. “In the third quarter of 2020, approximately 22% of Upstart-powered loans were retained by the originating bank, while about 76% of Upstart-powered loans were purchased by institutional investors through our loan funding programs.”
Upstart was valued at $750M during its 2019 Series D.
In 2017, deBanked referred to Upstart as the Tesla of alternative lending.
“You hear so much about how Tesla cars will drive themselves, how Google or Amazon home assistants talk to you to as if you’re human,” said Dave Girouard, Upstart co-founder, in an interview back then. “In lending we are the first company to apply these types of technologies to lending.”
Girouard’s co-founder Paul Gu, who serves as SVP of Product and Data Science, was only 21 when Upstart launched in 2012. He’s now 29.
Anna M. Counselman, the third co-founder, is SVP of People and Operations.
Upstart is planning to raise $100M from its IPO.
Square Capital loaned $155M in Q3, according to the company’s latest earnings report.
“We paused new flex loan offers until the end of July and, upon resuming offers, we were measured in ramping origination volumes in August and September,” the company said. The $155M originated was spread out across 35,000 loans.
The figure puts them slightly ahead of OnDeck ($148M) for the quarter but well below Shopify Capital ($252M)
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