ACCORD BUSINESS FUNDING

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Accord Business Funding Makes New Marketing Hire

April 3, 2018
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Aldo CastroHouston-based Accord Business Funding recently hired Aldo Castro to lead its marketing efforts. His title is Vice President of Sales & Marketing.  

“We are excited to have Aldo join our team,” Adam Beebe, co-founder of Accord Business Funding, told deBanked. “Aldo comes to us with over twenty years of experience in business-to-business sales and marketing experience… [and he] will use his experience and feedback from the ISO community to help Accord find new ways of adding value to our partners’ businesses.”

Prior to Accord Business Funding, Castro worked as a strategic marketing consultant and co-founded two digital marketing agencies in Texas. Founded in 2013, Accord is a B paper funder with terms between four to eight months and merchants that include auto dealers and trucking and construction businesses, among others. The company of 20 employees is entirely driven by ISOs.

“Accord offers our ISO associates a unique combination of integrity, speed, and flexibility, helping them close their deals faster and easier,” Beebe said.

BusinessFunding.com Sells for $44,000

February 12, 2024
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businesslending.comThe world of domain name investors called out a big sale that took place on GoDaddy over the weekend. The domain is businessfunding.com and it reportedly sold for $44,000, according to Namebio which tracks sales when data is available. The whois information does not reveal who the buyer is at this time.

Other potentially high value domain names in the small business finance industry include businessloans.com and smallbusinessloans.com, each of which are standalone businesses.

Meanwhile:
loans.com was sold for $3 million 24 years ago and today redirects to the homepage of Bank of America.

businesslenders.com belongs to Business Lenders, LLC, which has since ceased its lending operations.

businesslending.com redirects to a bio page for a big real estate broker.

merchantloan.com redirects to Circadian Funding’s website.

revenuebasedfinancing.com redirects to Lighter Capital’s website.

lenders.com is a page that hasn’t been set up yet.

lending.com doesn’t resolve.

How important is a domain name to a business? Important enough that a business can hardly afford to lose one. And did you hear about the first domain name to ever be used as loan collateral over the blockchain? It just happened recently!

Amazon’s Business Loan Program Relatively Flat, And The Company is Now Possibly the Largest MCA Broker?

October 29, 2023
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amazon truckAmazon’s seller lending program, in which the company extends working capital loans to Amazon sellers to buy inventory, has been somewhat flat this year. Its seller lending receivables in Q3 were unchanged from Q1, coming in at $1.2B. It had briefly gone up in Q2 to $1.3B.

Amazon rarely mentions its seller lending business which is but a blip compared to the $143B in net sales the company recorded in just the third quarter. Despite all this cash, Amazon relies on a $1.5B secured revolving credit facility with a lender in the same way many small business lenders do to facilitate this amount of loan volume.

deBanked has been tracking the company’s seller lending receivables balance since 2016.

Amazon’s separate merchant cash advance program is not counted as part of their selling lending program. Amazon partnered up with Parafin in November 2022 to offer MCAs to their clients. One consequence of that is that Amazon sellers talk publicly in the company’s Seller Central forums and this has been no exception. There, most mentions of Parafin have so far been less than flattering.

Much of the confusion reported by sellers is centered around the percentage collected from each sale. Unlike most MCA funding companies, which either withhold a percentage of card sales or debit a fixed daily amount that can later be trued-up upon request, Amazon was previously collecting its percentage “based on whether a seller had received any disbursements, automatic or manual, in the prior week.” However, that changed this past August, according to Amazon who published the following note in their forum:

Payment is deducted from your bank account based on your current Amazon disbursement schedule. If you receive disbursements weekly, payments for your cash advance will be deducted weekly. If you receive disbursements bi-weekly, payments for your cash advance will be deducted bi-weekly. In instances where Amazon sales data is delayed in reaching Parafin, Parafin combines the payment amount with the subsequent payment to avoid debits happening on unexpected days of the week. Sellers whose payments are impacted by these instances receive emails from Parafin detailing the expected payment dates and adjusted amounts.

“Your merchant cash advance will be paid off automatically over time as you make successive sales-based payments. Because your offer is determined in part by your past business performance, our estimate is that you’ll pay your merchant cash advance within the estimated timeframe stated when you accepted it. If your sales ramp up or slow down, your payment amounts (and therefore the estimated payment period) may ramp up or slow down with them. The payment rate itself will not change and is a fixed percentage of monthly sales.”


Although there is some irony to Amazon playing the role of MCA broker and MCA customer service, Amazon also refers its loan-interested sellers to Lendistry and Marcus by Goldman Sachs. All of this activity started late last year just as Amazon was on pace to max out its own credit facility with its own lending program. Since then, the company’s flat business loan receivable balance might suggest that Amazon’s seller financing business is actually growing, just not on its own balance sheet since its brokering the deals out.

So who’s the biggest MCA broker in the US? Amazon generated $514B in net sales in 2022. $1B in MCA deals wouldn’t be so hard for a company already doing about a billion a year in loans. It would be quite ironic to discover that the biggest MCA broker in 2023 was Jeff Bezos, but it’s a real possibility.

The State of Funding Right Now

September 19, 2023
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analysis“The first quarter was actually kind of slow, like abnormally slow,” said Daniel Dias, founder of Small Business Lending Source, a brokerage based in San Diego. “We came off actually a record-breaking year last year. First quarter this year turned out slow and then it was kind of weird. Maybe it was owners who are hesitant to see what’s going on because there’s a lot of uncertainty in the market.”

Dias says things changed dramatically in Q2, however, to the point of setting yet again a new record. And the momentum only continued into Q3.

“This quarter is actually turning out really well,” he said.

It’s also going really well for Greenbox Capital, a small business funding company based in Miami.

“Q3 has been our best quarter this year,” said Jordan Fein, Greenbox’s CEO. “We positioned the company well over the last 8 months, ready for whatever the economy throws our way. We are running lean and growing again.”

Greenbox began to tighten its credit policies late last year, according to Fein and by continuing this strategy into 2023, it has allowed the company to evolve. “Our momentum has been building ever since we tightened credit and refined our spending in Q4 2022,” Fein said.

Optimism is also in the air at The LCF Group, a small business funding company based on Long Island. “Navigating Q3 and approaching Q4, we anticipate our positive trajectory to continue given the consistent demand from merchants,” said Andy Parker, LCF’s CEO. “Despite certain sectors of the economy facing challenges and the appearance of recession indicators, we’ve adapted our underwriting to reflect these conditions without any major tightening of our guidelines.”

LCF recently announced that it had acquired key strategic assets from Reliant Funding.

Loan Volumes Strong, Approvals Cautious in Small Business Finance Space

August 22, 2023
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eye on your moneyIn this current environment, small business finance companies are proceeding cautiously.

“In 2022, the company’s turndown rate stood at 8%, but it has surged to 12% this year,” said David Miles, VP and Director of Credit for Eastern Funding. Eastern Funding primarily serves coin laundromats, grocery stores, and car washes but also operates two subsidiaries that focus on assets like commercial vehicles & tow trucks and fitness & wellness equipment. While Miles said that loan volume has remained strong, the percentage of transactions being turned down has increased.

“…I think that’s fairly indicative of the market or the environment that we’re currently in, which is high interest rates,” said Miles. “You have consumers that are carrying a lot of debt and it’s somewhat of a precursor to a potential downturn or recession.”

The circumstances are being felt all across the lending spectrum. According to a recent consumer lending study from the Federal Reserve, the overall rejection rate for credit applicants was 21.8% in June, the highest level in five years. That study looked primarily at mortgages, credit cards, and auto loans.

But in the commercial universe where Eastern Funding operates, the sentiment seems to be matching the shift in the numbers. On a recent quarterly earnings call, for example, Lightspeed CFO Asha Bakshani said of their MCA program, “There’s tons of demand. We’re just taking our time intentionally given the macro.” On unsecured business loans, Enova CEO David Fisher recently said that “we’re just not convinced the risk/reward is there right now, again, given the uncertainty in the economy, an extra few percentages of origination growth for us this year is pretty inconsequential.” Both Lightspeed and Enova are also still experiencing strong volume despite the conservative approach.

“We’ve definitely seen credit quality go down compared to prior years but that’s the main challenge,” said Miles of Eastern Funding. “And we want to make sure that especially in this environment, that we continue to make good loans, we make loans that don’t go to collections, that don’t go to work-out, and we don’t experience any losses across any of the three divisions.”

One challenge of being cautious, however, is communicating the situation to potential customers who may still be stuck in the mindset of 1-2 years ago.

“Our focus is on making sure that the people that do have credit authority, that they’re well aware of the environment that we’re currently in, and that there is enhanced risk just to do with the macroeconomic environment that we’re operating in,” Miles said.

New California Disclosure Rules Reduce Capital Available to Small Businesses

March 21, 2023
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In a poll conducted by a leading trade association, since new CA disclosure rules were implemented in December 2022, 40% of respondents were found to be “no longer lending” to prospective borrowers who fall within the regulations’ threshold of less than $500,000. The poll was conducted by The Secured Finance Network (SFNet), an 80-year-old nonprofit with members representing the $4T U.S. secured finance industry. The new law, requiring sweeping financial disclosures, introduced by CA State Senator Steven M. Glazer in 2018, faced four years of strong opposition before being rolled out in December of 2022.

According to the poll, commercial finance companies would rather not lend to small businesses than comply with what they believe are “misguided and un-compliable” requirements. Mark Hafner, president and CEO of Celtic Capital Corporation, based in Calabasas, CA, said, “Unfortunately, we must now shy away from smaller deals (under the $500k threshold) as the disclosure requirements are extremely complicated to figure out and would require getting our attorneys and CPAs involved to ensure compliance. It’s just not worth the costs involved to fund a small deal anymore. The statute is not user friendly and, frankly, not representative of the true costs as there are numerous assumptions that have to be made to calculate the APR based on the state’s requirements. I honestly don’t think it was designed to meet the stated goal of the statute.”

Robert Meyers, president of Republic Business Credit, which does business with many California-based businesses, explained, “While the fines and penalties are clear under the regulations, the state has been unwilling to confirm our compliance or anyone else’s compliance. That fear is what has stopped 40% of our non-banks from doing business in the state, thus reducing access to capital for small- and medium-sized businesses. I expect this number to increase as time goes on. If the goal of this law was to better inform, it is actually doing the opposite as APR just doesn’t apply to our products.”

SFNet reports that its member companies provide “tens of billions” of capital annually in California to small businesses for essential working capital that funds everything from inventory, to work in process to payroll.

“Forty percent of billions is a large number,” said SFNet CEO, Richard D. Gumbrecht. “In attempting to find a one-size-fits-all solution to financial transparency, the State has created a complex set of requirements that misrepresent the actual cost of borrowing. Lenders are saying it’s not worth the cost and risk of complying. If this sample of 50 lenders is indicative of what we can expect, clearly that was not the intent of the legislation. And considering the demise of Silicon Valley Bank, it’s more important than ever that capital is not restricted in California.” The trade association is working with State legislatures to revise the statute. “Other states have found a simpler and more accurate way to protect small borrowers, and given the unintended consequences we are seeing, we are hopeful California will be receptive to these alternative approaches.”

To demonstrate how vital small businesses are to the U.S. economy, and the importance of not curtailing funding, consider these statistics: According to the U.S. Small Business Association (SBA), small businesses of 500 employees or fewer make up 99.9% of all U.S. businesses and 99.7% of firms with paid employees. Of the new jobs created between 1995 and 2020, small businesses accounted for 62%—12.7 million compared to 7.9 million by large enterprises. A 2019 SBA report found that small businesses accounted for 44% of U.S. economic activity.

About Secured Finance Network

Founded in 1944, the Secured Finance Network (formerly Commercial Finance Association) is an international trade association connecting the interests of companies and professionals who deliver and enable secured financing to businesses. With more than 1,000 member organizations throughout the U.S., Europe, Canada and around the world, SFNet brings together the people, data, knowledge, tools and insights that put capital to work. For more information, please visit SFNet.com.

Media Contact:
Michele Ocejo, Director of Communications
Secured Finance Network
mocejo@sfnet.com, 551-999-5283

“Aggressive” Funding

March 7, 2023
Article by:

aggressive dealSometimes it pays to be aggressive!

“I think [aggressive funding] is a good phrase, I think in particular in the ISO organization as you’re speaking to the merchant you have to present yourself that you’re going to take an aggressive position to help them,” said Steve Kietz, CEO at Reliant Funding, “to help them get the biggest MCA deal size that you can get them, the best pricing that you can get them, be aggressive in terms of speed to try to get money for that merchant.”

And once that deal is in a broker’s hands, they may turn around and expect their network of funding partnerships to make that happen. Some lenders and funders lean into this style of courtship and market themselves as being similarly aggressive with their approvals.

“The word aggressive, that’s like my favorite word in this industry, because I guess it’s supposed to turn brokers on,” said Amanda Kingsley, Director of Marketing and Development at Merchant Marketplace.

The level of aggressiveness may depend on the attractiveness of the deal itself. According to Joseph Vaknen, Head of Business Development at SuperFastCap, funders will get more aggressive with their offers when there’s a “hot deal” on the table and it will kick off something similar to an auction or a bidding war. That scenario could potentially lead to the best outcome for the merchant just as intended and the broker essentially proves their value.

One’s aggressiveness can also be used to describe an overall risk appetite in general. “If you are considered an aggressive funder in the sense that you are funding bad deals then more likely than not the rate is super high and the term is super short,” said Vaknen. In that case, it’s important that all involved understand what is meant by aggressive.

And on the contrary, plenty of funding providers distance themselves from any such connotations of aggressiveness and are happy to be branded the opposite, conservative in their ways. That too can provide its own attractiveness depending on the circumstances. Aggressiveness, as one is surely aware in the financial services industry, can carry a certain stigma attached to it anyway.

“I think it’s a word that does have a negative connotation, but – you know, the word that we’ll add is caveat emptor buyer beware — as long as the customer knows what he or she is doing, having an aggressive ISO can be a good thing for them,” said Kietz of Reliant.

Funding Circle US Originates $393M in 2022

March 2, 2023
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The American arm of Funding Circle originated $393M in business loans in 2022, according to the company’s latest public financial statements, nearly quadruple the previous year.

The majority of Funding Circle’s loans are currently projecting annualized returns in the vicinity of US inflation levels. A graph of their loans by cohort is below:

us cohorts

Funding Circle US has a fairly diversified base of capital, having worked with eight forward flow funders in 2022, one of which was a credit union.

The UK still remains the overall company’s primary market. It originated £723M in business loans in 2022, not including those part of government support scheme programs.

Threads on deBanked


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