Archive for 2021
What The “Capital Dude” Said About Experience, Success, and the Future
August 18, 2021
Coming in at rank #1,044 on the 2021 Inc 5000 list was a small business finance provider with a whimsical name, Capital Dude. Having some common ownership overlap with another Inc ranked company, Central Diligence Group (#2,893), the Dude told deBanked that they didn’t shut down or pause funding throughout 2020. In fact, they continued to grow.
“We really have to attribute the company’s growth to our hardworking and efficient team that made sure we didn’t miss a beat while having to work remote,” said company partner Andrew Hernandez.
The name, Capital Dude, was chosen to convey an easy process to their partners and clients, the company says, while at the same time being compatible with a mascot they had in mind. The Capital Dude himself is a superhero in a green suit with the letters “CD” emblazoned on his chest. He’s also got a red cape and a flashy smile.
Behind the optics, however, is a seasoned team.
“We got started in the industry during the ’08 – ’09 recession,” Hernandez said, “so when you experience getting started during a downturn, you quickly realize that the only way to keep going is to stick to your principles while continuously taking inventory of the ongoing situation and making any necessary changes quickly in order to protect the portfolio. While both downturns were very different in how they played out, applying that previous experience to the past 18 months has been interesting as we have seen a lot of similarities that are very measurable.”
Central Diligence Group, meanwhile, has gotten repeat recognition on the Inc 5000 list.
“CDG offers consulting and underwriting services to other alternative financing companies in the industry,” Hernandez explained. The “short term plan is to scale out this portion of the business in 2022 via licensing of our platform to funders, funds, accredited investors, etc.”
The companies are currently in the process of moving to a new office and they expressed that they are “very bullish on the future” and plan to increase their headcount and continue to grow.
Stacey Huddleston Joins Seacoast Business Funding
August 17, 2021
Boynton Beach, FL – August 16, 2021 – Seacoast Business Funding is pleased to announce the addition of Stacey Huddleston as Vice President, Business Development Officer. Mr. Huddleston is based in the Midwest and will focus on expanding the Seacoast portfolio in the region. He brings over twenty years of expertise in the financial and alternative lending space providing creative solutions for businesses with complex financial needs.
Seacoast is focused on driving growth and cultivating client relationships to meet the increasing financial needs of businesses throughout their lifecycles. I am confident Stacey’s extensive industry knowledge and relationship-driven approach will drive growth and strengthen our presence across the Midwest region. He will make a welcomed addition to the team,” remarked, Jay Atkins, President of Seacoast Business Funding.
Huddleston is a US Army Veteran who holds a bachelor’s degree from Illinois State University and an MBA from Baker University. He has held many distinguished positions throughout his career dedicated to providing businesses with financing to meet their strategic goals. “I am pleased to be joining Seacoast Business Funding. Their focus on ensuring businesses receive the right custom funding solutions is what sets them apart. The opportunity to be part of such an experienced and client-focused team is exciting, and I look forward to driving successful growth for Seacoast in the Midwest,” commented Huddleston. Mr. Huddleston is a member of the SF Net, International Factoring Association, and Association for Corporate Growth. For deal inquiries, Stacey may be contacted by email at stacey.huddleston@seacoastbf.com or by phone at 816-372-5223.
About Seacoast Business Funding
Seacoast Business Funding provides customized and timely working capital financing solutions to small and middle-market companies engaged mainly in business services, distribution, manufacturing and staffing with annual sales ranging from $1 million to $200 Million. Credit facilities are in the form of Factoring, Invoice Purchasing or Asset-Based agreements. Seacoast Business Funding is a Division of Seacoast National Bank. Member FDIC. For more information visit SeacoastBusinessFunding.com.
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Small Business Finance on the 2021 Inc 5000 List
August 17, 2021Here’s where alternative small business finance ranks on the Inc 5000 list for 2021:
| Ranking | Company Name | Growth |
| 44 | Crestmont Capital | 7,404% |
| 1044 | Capital Dude | 463% |
| 1221 | Fountainhead | 394% |
| 2298 | Bankers Healthcare Group | 186% |
| 2427 | Fund&Grow | 173% |
| 2628 | Channel Partners Capital | 155% |
| 2803 | PIRS Capital | 142% |
| 2893 | Central Diligence Group | 135% |
| 3005 | ApplePie Capital | 127% |
| 3027 | Nav | 126% |
| 3365 | Onset Financial | 105% |
| 3394 | OTR Capital | 104% |
| 3547 | Forward Financing | 96% |
Did we forget you? Let us know at info@debanked.com
Update on the Direct Lending Investments Case
August 15, 2021More than two years after the SEC charged Direct Lending Investments with fraud, work is still being done to manage the fallout. The firm was placed into receivership and since then $102.83M has been distributed back to 739 investors. Overall, the Receiver expects to recover somewhere between $215M and $265M, far short of the $789.6M supposed portfolio value at the time the Receiver took over.
Much of the shortfall can be attributed to poor investments in businesses that fell outside of what it promoted to investors. For example, $191M is tied up (and likely unrecoverable) in international telecom receivables, a far cry from the online lending industry it claimed to deal exclusively with.
Direct Lending’s former CEO, Brendan Ross, is still out on bail pending trial on related criminal fraud charges. He was indicted in August 2020. The trial was recently postponed and is now scheduled to take place on March 1, 2022.
One party that took heat over Direct Lending Investments, was the firm’s auditor, Deloitte. The Receiver sued Deloitte over the firm’s “improper clean audit opinions” in 2016 and 2017 that helped create the perception that Direct Lending Investments was managing its business on the up and up. Deloitte settled the case and agreed to pay $31M.
SoFi Posts $165.3M Q2 Net Loss
August 15, 2021SoFi put up a dastardly net loss of $165.3M last quarter on only $231.3M in net revenue.
The hit should be a one-off, according to the company.
We remeasured our valuation allowance during 2020 as a result of the deferred tax liabilities recognized in connection with our acquisition of Galileo, which decreased the valuation allowance by $99.8 million. The absence of that tax benefit, together with significant non-cash stockbased compensation expenses and fair value changes in warrants primarily related to the fair market value of SoFi stock, were the largest contributors to the current period net loss.
Wannabe Business Lender Sentenced to Six Years in Prison
August 11, 2021
Justin Cheng’s website said his company, Celeri Network, could help business owners get a loan between $5,000 and $5 million. Rife with all the familiar lingo commonly found on loan broker websites, Celeri Network gave the appearance of an everyday small business finance company.
Unfortunately for unsuspecting customers, Cheng took his own approach with applicants, telling them that they had to pay upfront refundable “due diligence fees” to help them secure funding. Of course, when the funding never came through, he failed to deliver refunds to the tune of $380,000.
That was only the tip of the iceberg for Cheng who was sentenced to 72 months in prison this week for a litany of schemes including this one.
According to the Department of Justice, “Cheng used the identity of other individuals to submit online applications to the SBA and at least five financial institutions for a total of over $7 million in government-guaranteed loans through the SBA’s PPP and EIDL Program for several companies controlled by CHENG, namely Alchemy Finance, Inc., Alchemy Guarantor LLC d/b/a “Celer Offer,” Celeri Network, Inc., Celeri Treasury LLC, Wynston York LLC, and Neo Bellum Industries Inc.”
Representing also that he had more than 200 employees when he never had more than 14, he successfully secured $2.8M in PPP funding altogether.
“Cheng transferred over $1 million abroad, withdrew approximately $360,000 in cash and/or cashier’s checks, and spent at least approximately $279,000 in PPP loan proceeds on personal expenses,” the DOJ found. “These personal expenses included the purchase of an 18-carat gold Rolex watch for approximately $40,000, rent and move-in fees for a $17,000 per month luxury condominium used by CHENG, approximately $50,000 of furnishings for the condominium, a portion of the purchase of a 2020 S560X4 Mercedes, and purchases totaling approximately $37,000 at Louis Vuitton, Chanel, Burberry, Gucci, Christian Louboutin, and Yves Saint Laurent.”
Far from finished, Cheng also announced the launch of a blockchain-based peer-to-peer lending platform and sold more than $400,000 in digital tokens through “materially false and misleading statements and omissions.”
“Cheng, 25 of New York, New York, pled guilty on April 20, 2021, to one count of major fraud against the United States, one count of bank fraud, one count of securities fraud, and one count of wire fraud,” the DOJ said.
LoanMe Now Officially Part of NextPoint
August 11, 2021
The Canadian SPAC deal to merge LoanMe with Liberty Tax was finally completed last month after being announced in February.
The combined entity, NextPoint Financial, trades on the Toronto Stock Exchange under the ticker NPF.
“In just over a year from establishing this SPAC, we have closed two acquisitions that immediately create a financial services company with scale and opportunities for synergistic growth,” said Andy Neuberger, Chairman of NextPoint Financial. “With a management team and board comprised of proven executives and operators across the financial services, digital and retail sectors, we have very quickly created an organization that is set to impact how financial services are delivered to North America consumers and small businesses.”
The deal is especially significant in the small business finance space since it will place LoanMe’s small business loan and merchant cash advance products into 2,700 Liberty Tax storefronts throughout North America.
Reliant Funding Announces Steve Kietz as New CEO
August 10, 2021Industry veteran and former Chief Marketing Officer is appointed Chief Executive Officer of the leading alternative finance company
San Diego, CA (August 10, 2021) – Reliant Funding, a leading small business finance company, today announced that it has named Steve Kietz to the role of Chief Executive Officer. Kietz previously served as the firm’s Chief Marketing Officer. The industry veteran will guide Reliant Funding on its mission to continue providing world-class, customized finance solutions for American Small Businesses.
As CMO, Kietz was instrumental in expanding Reliant Funding’s marketing, risk and technology initiatives. He is a seasoned financial services professional with a more than 30-year track record of leading successful teams and is widely recognized as an industry leader in cultivating strategic partnerships. Prior to joining Reliant, Kietz served as President of Inte Q, was Founder and CEO of Mobile Money Ventures (which was acquired by Intuit), and held leading roles at Citi and JP Morgan, including President of Citibank Direct. Outside the profession, Kietz has volunteered as Vice President of the Familial Dysautonomia Foundation for over 30 years.
Commenting on his appointment, Kietz said, “I’m excited and grateful for the opportunity to lead Reliant Funding into a new era, where we are positioned as industry leaders in delivering value to our customers. The company has a long history of providing outstanding financial solutions to small businesses and I am deeply humbled to continue this legacy. I am excited to lead a team of great people and I look forward to continuing to execute our mission.”
Reliant Funding has grown rapidly as it seeks to help small businesses across the country in achieving their financial goals, having provided nearly $2 billion in funding to over 30,000 companies since 2008. The nationally recognized company works to provide tailored financial solutions, regardless of business size. Reliant Funding is owned by Angelo Gordon, a leading global alternative investment firm that provides research-driven investment solutions, driven by their 30+ years of expertise.
Art Peponis, Head of Private Equity at Angelo Gordon, said, “Steve has been instrumental in building Reliant Funding to the leading alternative finance company it is today and has been pivotal in its ability to continue to provide support to small businesses impacted by the devastating COVID-19 pandemic. His decades of expertise, innovative perspective and dedication to our people and small businesses made him the perfect fit as the new CEO of Reliant Funding. We’re confident that he will continue to provide American small businesses with the access to funding they need and the service that assists them in accomplishing their goals. The future is bright for Reliant Funding.”
For more information on Reliant Funding, please click here.
Reliant Funding, headquartered in San Diego, provides customized, short-term funding to small and mid-sized businesses nationwide. For more information, please visit www.reliantfunding.com.
Angelo Gordon, headquartered in New York City, is a global alternative investment company, focused on credit and real estate. For more information, please visit www.angelogordon.com.
