The Scoop Behind The Primary Capital / Infinity Capital Funding Acquisition

This morning, Primary Capital announced that it had acquired the merchant cash advance division of Infinity Capital Funding. Infinity, which has been operating from California since 2006, began as an MCA company before expanding to offer small business loans as well. The acquisition will see Infinity’s thirteen years of data, technology, and merchant portfolios pass onto Primary.

Speaking on the acquisition, Primary Capital Managing Member David Korchak said that “anything that you can acquire with that much time behind it and that much experience behind it is excellent, and for us with what we’re trying to do it’s tremendous. It’s a big, massive help for us.”

As well as the intangible assets that will be conferred to Primary, Isaiah Kenigsberg will be joining their team. Having served as Infinity’s Financial Controller, Kenigsberg is now CFO at Primary.

The decision to acquire Infinity’s book came after Primary noticed that it was winding down its MCA operations, Korchak told deBanked. Seeing the value in obtaining such a trove of data proved too enticing to pass the Managing Member said, and Primary has been digging into the information obtained for the last three months.

For Korchak, something that has stood out from this analysis is the patterns that have emerged in the portfolio. “The thing that’s remarkable for these companies that have been around as long as them, is everyone seems to have clients that have taken 30 advances from them. They have clients that started back in ’07, ’08, that are still active merchants which is remarkable.

“The only difficulty is trying to analyze and say, ‘Why is this merchant after 30 different cash advances over a 12-year period still taking cash?’ And that’s really our model. And our goal for this year is to try and help subprime borrowers get out from having to take toxic debt like cash advances for their business. Ultimately, the data that we’re acquiring from ICF and this acquisition is going to help us study a lot of the transitions that MCA merchants have made since the beginning and see which ones have actually been able to get out of it.”

Asked whether there are any more acquisitions in the pipeline, Korchak responded, “Absolutely, we’re heavily data and service-driven for this year specifically, and we have a lot more to come.”

Brendan Garrett was a Reporter at deBanked.