Archive for 2021
Northteq Announces Partnership with Syndifi to Enable Seamless Syndication with Salesforce
March 29, 2021
Minneapolis, Minn. – Northteq, a leading software solutions provider for the commercial lending and equipment finance industries, has announced its partnership with syndication software provider, Syndifi. Northteq will enable Syndifi’s online syndication platform to integrate with Salesforce.com, a cloud computing service as a software (SaaS) company that specializes in customer relationship management. The integration will accelerate and automate the user experience for Syndifi clients.
“Salesforce has become a leading origination platform for the equipment finance industry. Enabling Syndifi clients to create and send deals to our platform from Salesforce automatically will produce a seamless syndication experience.” Dan Michalek, CEO, Syndifi.
The first phase of the multi-layered integration will allow the Sellers using Syndifi’s platform to transfer deal information and data from Salesforce to Syndifi without having to manually rekey information. The integration will share status updates on both platforms.
“Our goal is to simplify lending. As such, we need to create a frictionless process for lenders to syndicate deals. Enabling our clients to send deals via a button click to the Syndifi platform creates this seamless user experience.” Kristian Dolan, CEO, Northteq.
About Northteq
Northteq is about enabling their clients to achieve fully integrated, automated origination solutions. They partner with several FinTech and lending service providers to bring the latest technologies to the equipment finance and commercial lending industries on the Salesforce platform. They also build vendor and customer portals to give their client’s customer’s an amazing customer experience. Northteq is headquartered in Minneapolis. For more information, please email info@northteq.com.
About Syndifi
Syndifi is the only Syndication platform built specifically for the Equipment Finance industry, enabling Buyers and Sellers to transact more securely with their trusted partners in the cloud. They are constantly innovating their customer experience to meet the highest standard of excellence for their clients. Syndifi was founded by Dan Michalek, who also revolutionized and digitized the granting of credit within the Equipment Finance industry with the formation of PayNet (now a division of Equifax). Syndifi is headquartered in Chicago. For more information, please email info@syndifi.com.
FOR MORE INFORMATION CONTACT:
Kristian Dolan | (612) 483-1210
kdolan@northteq.com
Merchant Cash Advance Facebook Group Hits 1,000 Members
March 26, 2021
The Merchant Cash Advance facebook group, a community created and administered by deBanked, has reached 1,000 members. The social media group is a popular place for those in the non-bank business finance community to engage with each other online.
“We’re seeing an uptick in collaborative business development, especially among smaller brokerage organizations and those who work independently on their own,” deBanked President Sean Murray said. “A lot of ideas, motivation, referrals, and deal-making is being conducted online, more-so than before because of the 2020 lockdowns where in-person collaboration slowed to a crawl.”
Separately, deBanked shares common ownership with DailyFunder, the largest b2b finance community on the web.
“We actually witnessed a very insightful trend on DailyFunder,” Murray said. “Approximately 7.5% of the active membership that existed on March of 2020, had left their jobs or closed their business by March of 2021. It sounds troublesome on its face except that we added more members than we lost in that timeframe. More people came in than left, a net increase. I think the data is pointing to the future being very strong!”
Funding Circle US Originated $800M in 2020, More than 90% of Borrowers Were Making Payments
March 26, 2021
Funding Circle US revealed originations of £581M in 2020, equivalent to about $800M at current exchange rates. More than 90% of the company’s American borrowers were making full regular payments on their loans, Funding Circle reported. Approximately 7% were on a “payment holiday” at year-end or were not paying.
Funding Circle’s US loans generate low annual returns, its highest being a projected return of 4.1% to 4.9% for its 2016 cohort. Its 2020 cohort is projected to generate an annual return of between 1 – 3%.
Overall, Funding Circle reported a total net loss of £108.1M (approx $150M US) on just £103.7M in revenue, a massive loss that stemmed entirely from the first half of the year, attributed mostly to a write-down in “fair value.”
Funding Circle’s primary market is the UK. When comparing the market with the US, the company said that the US is in an earlier stage of development even though the market is 5x larger.
Midtown Dead? No, It’s A Good Time to Buy
March 25, 2021
When it comes to working from home and the flight from midtown Manhattan offices the past year, one expert on commercial real estate said it isn’t the end of the metro area way of life: it’s a great time to buy.
“There’s some great deals. I mean, on both rents, leases, and purchases in many of these markets. So tremendous opportunities, and there’s a lot of power on the sidelines, who is well aware of it,” CEO Anthony Romano of the Commercial Real Estate analytics firm CREtelligent. “In San Francisco, Manhattan, in Dallas in the Miami marketplace, there’s some incredible opportunities that I think people will seize.”
At CREtelligent, Romano helped launch the Radius platform, an all-in-one automated appraisal platform that draws site data for identifying commercial properties. When he joined the firm, he aimed at making the commercial real estate world as seamless as some residential loans.
“Before, during, and after the commercial real estate transaction, it’s super inefficient,” Smith said. “We wanted to say, how do we fix it? A client of ours, an investor, a broker, a bank, or anybody who’s involved in the transaction, can come to the Radius platform and put in an address and APN, and identify their property.”
Instead of ordering 10 or 12 assessments from a handful of sources, a processor must only visit the CREtelligent site. Based on the know-how it took to create the platform, Romano said the trends like the 10 year Treasury return are directing the CRE market on the up and up in the coming months.
Romano said that most commercial properties have a Loan-to-Value (LTV) ratio of about 70% in his experience. If a large office building or retail store has a $10 million mortgage keeping it open, it would have to drop by $3 million before the bank starts getting uneasy- a point the market is nowhere near.
No, Corporations Can’t Sue For Usury in New York, Appellate Division Rules
March 25, 2021
Businesses hoping to use the New York State court system to invalidate an MCA or financing agreement, suffered a major defeat on Wednesday. The Appellate Division, Second Judicial Department, ruled that corporations cannot assert usury as a cause of action, even if the allegations meet the criminal usury basis. In deciding this, the Appellate Court was simply affirming what New York’s statute on the matter plainly says.
This has not stopped plaintiffs from asserting criminal usury as a cause of action in New York, however, but now such attempts will probably be fruitless.
In May 2016, Global Merchant Cash, Inc. (GMC) entered into a merchant agreement to buy the future receivables of Paycation Travel, Inc. Paycation breached the contract and GMC ultimately filed a confession of judgment. Paycation then tried to vacate the judgment by suing GMC on several grounds including its theory that the judgment was void and unenforceable because the underlying agreement was for a criminally usurious rate of interest.
GMC moved for summary judgment to dismiss the complaint and its motion was denied. GMC appealed the decision insofar as it believed Paycation could not assert criminal usury as a basis for a cause of action.
On March 24, 2021, the Court rendered its decision on the narrow debate in GMC’s favor.
“A transaction . . . is usurious under criminal law when it imposes an annual interest rate exceeding 25%” (Abir v Malky, Inc., 59 AD3d 646, 649; see Penal Law § 190.40). General Obligations Law § 5-521 bars a corporation such as the plaintiff from asserting usury in any action, except in the case of criminal usury as defined in Penal Law § 190.40, and then only as a defense to an action to recover repayment of a loan, and not as the basis for a cause of action asserted by the corporation for affirmative relief (see LG Funding, LLC v United Senior Props. of Olathe, LLC, 181 AD3d 664, 666; Intima Eighteen, Inc. v Schreiber Co., 172 AD2d 456, 457). Accordingly, the Supreme Court should have granted that branch of the defendant’s motion which was for summary judgment dismissing so much of the first cause of action as alleged criminal usury in violation of Penal Law § 190.40.
This decision did not decide the entirety of the case and litigation between the parties is still pending. It does, however, bring conclusive clarity to whether or not corporations can assert usury as a cause of action, even if it’s alleged to be criminal.
The case number is 52579/2017 in Westchester County in New York Supreme Court. The Appellate decision can be viewed here.
NY Court Says MCA Agreement is a Factoring Agreement, Not a Loan
March 22, 2021
A New York Supreme Court judge that was presiding over a breach of contract claim (653596/2018) in a merchant cash advance agreement, said he was bound to follow the decision issued in Champion Auto Sales, the landmark appellate ruling in 2018.
In Principis Capital LLC v Team Van Eyk, Inc. et al, Principis sued the defendants over a breach of contract. Defendants “did not deny the facts underlying the motion or the the amount due,” the judge said, “but asserted instead that the Agreement is not an agreement for the purchase of future receivables; but is instead, a criminally usurious loan, and is therefore void as a matter of public policy.”
This defense actually led to victory for the plaintiff.
The Appellate Division, First Department, in Champion Auto Sales, LLC v Pearl Beta Funding, LLC (159 AD3d 507, 507 [1st Dept], lv denied 31 NY3d 910 [2018]) has considered this issue, involving a merchant agreement substantially similar to the agreement in this matter, and has held that the type of agreement involved in this case is a factoring agreement rather than a usurious loan. This court is bound to follow Champion and, therefore finds that the Agreement is a factoring agreement and not, as defendants assert, a usurious loan. There are, therefore, no genuine triable issues of fact, and plaintiff is entitled to summary judgment on its complaint.
Case closed.
Steve Denis, SBFA on Why Maryland MCA Bill Failed
March 22, 2021
“In a lot of these places, a lot of the bills are well intended, believe it or not,” Steve Denis, executive director of the Small Business Finance Association, said. “Legislators just don’t understand enough about our industry to understand the nuances. We’ve worked really hard educating policymakers in Maryland, and frankly, they now understand our industry better.”
Denis was referring to the nearly unanimous canning of Maryland’s MCA “Prohibition” bill last week. The bill failed to get enough support to leave the committee, blocked by a 19 to 3 vote against bringing the law out to the House floor. Denis, a proponent of the MCA and alt financing industry for years, said it was due to legislators understanding the need for capital “out there during the pandemic” and how harmful an APR cap could be for both business owners and the broker industry.
The law was originally proposed last year before covid shutdowns, but that also failed to make it to the floor. It now appears to be an annual event.
“Our goal as an organization is to make sure that small businesses have access to all different types of financial products and that we believe that small businesses are in the best position to make good decisions for their businesses,” Denis said. “The bill in Maryland narrowly targeted MCA products, and as you know and a lot of folks in the industry know, that sometimes MCA is in the best interest of the business, there’s a lot of benefits to an MCA.”
Denis punctuated his statement with the mantra- we were not out of the woods yet. An APR disclosure bill was just introduced in the Connecticut State Senate last month, modeled off the New York APR bill set to go into effect this year. Denis was hopeful the legislators could learn from speaking to industry interests and change their course like in Maryland.
“We are engaged, I think we’re in a good spot. With any of these bills, Maryland, Connecticut, I caution you know we’re not out of the woods yet,” Denis said. “We still want to work really closely with policymakers. We’re for meaningful disclosure, we think there needs to be some guardrails on our industry, but I think that the most important thing we can do is continue to educate folks in states.”
Tune In Tuesday at 10:30 AM EST: deBanked TV Live – With Guests From the Business Funding Industry
March 22, 2021
deBanked is hosting a livestream broadcast tomorrow beginning at 10:30 AM from a venue in Midtown Manhattan with guest speakers from two broker shops and a business funding company. There is no need to register for anything. Anyone can tune in live at deBanked.com/tv to watch it. The broadcast will run for 2.5 hours and end at 1 PM. This is an-person event being broadcast with no Zoom or virtual conversation. The event will also be recorded and made available free.
deBanked’s massive in-person conference, Broker Fair, will return to NYC later in the year on December 6th at Convene at Brookfield Place in lower Manhattan.
