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10/18/2021Merchant Growth secures C$4.1M equity cap
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02/16/2021Merchant Growth launches LOC product
09/24/2020Merchant Growth hires Kevin Clark as CRO
12/03/2019Merchant Growth Partners w/ goeasy Ltd


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Episode 82 - SBA, Capital Raising, Broker Fair News


Stories

Merchant Growth Partners with goeasy to Provide Funding via Physical Branches

December 11, 2019
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Merchant Growth goeasyThis month Merchant Growth, the Vancouver-based alternative finance company, announced its partnership with goeasy Ltd. that will see Merchant Growth’s services being offered in goeasy branches throughout Canada. Beginning with British Columbia, Alberta, and Saskatchewan in 2019, Merchant Growth aims to have expanded to the remaining provinces in the first quarter of 2020.

Under the partnership, goeasy will receive compensation from Merchant Growth for all loans made through them while Merchant Growth will provide the capital.

“goeasy is a unique Canadian success and they’ve done that by being disciplined managers, by putting their customers first, and by building a great reputation for themselves in the industry,” said David Gens, Merchant Growth’s President and CEO. “And what we see in them is an ideal partner in that they have the market reach in terms of brand recognition and locations around the country.”

It is the latter of these factors that make the deal stand out. Given the industry’s standard of digital applications, goeasy and Merchant Growth’s return to brick and mortar branches that offer live human managers, clerks, and even physical paper, marks a turn back towards more historical methods of doing business.

Gens commented on this, stating that “there’s something to be said for face-to-face interactions and for that reason I don’t think you’re ever going to go down to having no bank branches … Having a physical location where you can chat with people about your financial needs is something that will always exist as far as I can see.”

Merchant Advance Capital Rebrands to Merchant Growth

July 3, 2019
Article by:

Merchant Growth websiteMerchant Advance Capital, which trumpets itself as Canada’s fastest and most transparent small business financier, is rebranding as Merchant Growth.

The company has offices in Vancouver, BC and Toronto, ON and was founded in 2009.

“I founded our company out of my apartment 10 years ago,” David Gens is quoted as saying in a company announcement. Gens is the company’s president & CEO. “Back then our mission was simply to provide credit to small businesses, and we did that by providing one product, called a ‘merchant advance’. Today, we offer a comprehensive suite of financing solutions delivered with unparalleled convenience. In doing so, our mission has expanded to allowing business owners to achieve unconstrained growth, while reducing the administrative stress of running a business. As we’ve transformed our focus from one credit product to this far-reaching mission, we felt the need for our name to reflect this. We are Merchant Growth.”

Gens has been an oft-quoted source in deBanked over the years. His company closed on a $30 million debt facility last year with Comvest Credit Partners.

Gens is also speaking at deBanked CONNECT Toronto on July 25, 2019. You can register to attend at www.debankedcanada.com.

Merchant Cash Advance Diminished by Growth of Payment Technologies

May 15, 2011
Article by:

Technology will be the end of us all

When bank lending dried up, Merchant Cash Advance (MCA) providers fulfilled the need to keep America’s small business owners going strong. By withholding a percentage of each credit/debit card sale automatically, there was no need to worry about a client’s ability to make payments. Without the risk of late payers or non-payers, MCA providers singlehandedly eradicated credit score from the underwriting guidelines. Or so they thought.

Only a small percentage of businesses in default actually close their doors. Circumventing the MCA provider’s merchant processor or incentivizing customers to pay with cash are issues that have plagued the industry for years. While this would constitute a clear breach in the sale of one’s future receivables, it’s not always a deliberate act of malice. However, there is a direct correlation between the frequency of breaches and *surprise* declining credit score.

But in the instances without malice, such as if damaged POS equipment prevents the flow of processing, there’s not much a MCA provider can do other than help fix it. These gaps in collection affect the bottom line and lead to upward pressure on costs or tighter restrictions on approval, two outcomes that nobody wants.

And as if there already wasn’t a strain, changes in payment technology are quickly eroding the MCA industry’s turf. The credit/debit card sales of a business aren’t exactly limited to one of these:

Now there are options, lots of them. In today’s world you can accept electronic payments with almost anything, a conundrum for MCA providers aiming to collect a percentage of all of it. And how about those routine PCI compliance upgrades? There are countless businesses with a basement full of old credit card machines that could be plugged back in, put back into service, and freely used to circumvent their financial obligations.

Take this clothing retailer for example. She qualified for an advance of only $5,000 but when it came time to convert the merchant account, the process wasn’t so easy:

Nearly all of the transactions conducted inside the store happen through the touch screen POS. The merchant statements reflect consistent historical sales of nearly $4,800 per month, instilling the belief that the future won’t be much different. But when the customer lines get too long, there’s a backup credit card terminal that they pull out from under the counter that still has an active account with a previous processor. Around the holidays, they dig out the old Tranz model terminals from the basement and use them too. For street fairs and trade shows, they attach their Square to their iPhone and process on the go. And when it comes to their website and Ebay, PayPal is their preferred method of payment.

This doesn’t mean the touch screen POS won’t continue to see $4,800 worth of action per month, but the situation doesn’t inspire a lot of confidence if the goal is to collect a percentage of their credit/debit card sales. What if they occasionally use Square inside the store? What if phone orders are punched into PayPal? These things may happen inadvertently or simply because their customers demand it.

To firmly secure a purchase of future sales, the MCA provider would need to do the following:

  • Convert the touch screen POS system (which will very likely come with a fee from the POS reseller)
  • Reprogram their backup terminal
  • Reprogram all the old terminals collecting dust in the basement
  • Force the return of the Square and replace it with their own iPhone processing attachment
  • Delete PayPal from the HTML of the business’s website
  • Instruct them to stop conducting business on Ebay
  • Cancel the PayPal account altogether and replace with an authorize.net virtual interface or something equivalent

That’s a lot of effort for $5,000 but doing anything less is a gamble. That’s another reason why MCAs are more expensive than bank loans. Without set fixed payments, they are extremely vulnerable to economic ups and downs and now the explosion of payment alternatives.

Rather than stay ahead, the industry is becoming more fractured as evident by the rise of new funding sources such as Kabbage, that lends against future PayPal sales. It’s innovative but vulnerable. Kabbage depends on the success and status quo of PayPal for survival, a characteristic that is not likely to carry them far. Similarly, MCA providers are dependent on withholding a percentage of future sales, an uneasy task in a world where the point of sale itself is changing.

Innovation in the MCA space has gone as far as automated bank debits and a lockbox. One depends on the merchant’s use of a single bank account and the other is equally exposed to the issues we’ve discussed.

Which of course begs the question: If electronic payments are becoming more elusive to capture, how can the MCA industry survive? The obvious answer is to transform the product itself into a loan. Secure it against collateral and have the credit bureaus at your disposal. Breaches will become far less likely and electronic payments less elusive when there are actual consequences involved. It’s a dreaded word and one MCA representatives have spent years avoiding, but according to the state of California, it’s probably a loan already anyway.

As MCA providers struggle to keep up with payment alternatives, banks are wondering when we’ll all wake up from the “it’s not a loan” euphoria. If the goal is to provide capital and get more back, reprogramming a terminal isn’t going to cut it. How many free hours can America Online offer to bring people back to their dialup internet service? Technology changed and the age of AOL ended. So too may the age of Merchant Cash Advance…. at least in its current form.

– The Merchant Cash Advance Resource

http://www.merchantcashadvanceresource.com

The Merchant Marketplace Announces Its New Launch with Industry Powerhouse Executive

September 19, 2022
Article by:

CEO Adam Schwartz and Strategic Partner Kevin Harrington are committed to helping businesses grow by providing access to capital

Merchant Marketplace TeamBALDWIN, NEW YORK SEPTEMBER 19, 2022 – The Merchant Marketplace, a leading fintech platform provider of direct financing to small and midsize businesses, announced today the launch of its new leadership with backing from industry powerhouse executives. The company’s new leadership team brings over 75 years of collective financial, technology, and business experience within its core leadership group: Adam Schwartz as CEO and Kevin Harrington, the Original Shark Tank Investor, will serve as a Strategic Partner. This partnership will revolutionize how merchants and independent sales organizations (ISO’s) obtain capital for growing their merchant’s businesses, changing the game for entrepreneurs throughout the United States.

“We are looking to change the industry by using a true fintech platform to facilitate transactions amongst ISO’s, merchants, and the Merchant Marketplace,” said Merchant Marketplace CEO Adam Schwartz. “We understand the challenges many small business owners face when trying to secure financing to help make their dreams a reality. The Merchant Marketplace is happy to be a resource for entrepreneurs by providing them access to capital so they can build a successful business.”

The Merchant Marketplace created a proprietary syndication platform that offers real time data and full transparency. In most instances, the company will offer ISO’s a two percent syndication as bonus for every deal that it funds, with the ability to syndicate more funding if needed. ISO’s can earn another stream of income by being vested in every deal they fund with the Merchant Marketplace, as well as earn a referral fee. The platform also offers a profit-sharing program and technology tutorials to show ISO’s how to engage with the platform to help achieve the best end results.

The Merchant Marketplace

“The merchant cash advance market has been witnessing an escalation in growth over the past few years with the help of innovation. Our technology integrates with over 25 different third parties to give us complete insights into our merchants, giving us the ability to make offers with lightning speed and efficiency. We understand the needs of our clients and we want them to be part of the process. We do not want to be seen as just another funder; we want to be seen as a business partner for our ISO’s,” said Merchant Marketplace Director of ISO Relations, Justin Strull.

For questions on the service and to sign up as an ISO, contact Justin Strull at 516-980-4932 or email in to justin@merchantmarketplace.com

About Kevin Harrington

As an original “shark” on the hit TV show Shark Tank, the creator of the infomercial, pioneer of the As Seen on TV brand, and co-founding board member of the Entrepreneur’s Organization, Kevin Harrington has pushed past all the questions and excuses to repeatedly enjoy 100X success. His legendary work behind the scenes of business ventures has produced more than $5 billion in global sales, the launch of more than 500 products, and the making of dozens of millionaires. He’s launched massively successful products like The Food Saver, Ginsu Knives, The Great Wok of China, The Flying Lure, and many more. He has worked with amazing celebrities turned entrepreneurs including, Billie Mays, Tony Little, Jack LaLanne, and George Foreman to name a few. Kevin’s been called the Entrepreneur’s Entrepreneur and the Entrepreneur Answer Man, because he knows the challenges unique to start-ups and he has a special passion for helping entrepreneurs succeed.

Codat’s Partnership with Moody’s Brings Real-Time Merchant Accounting Data to Lenders

January 10, 2022
Article by:

Moody's logoCodat and Moody’s Analytics are partnering to bring the fintech’s API software into Moody’s CreditLens solution. The move will enable Moody users looking to fund small businesses the ability to access and manage all of the accounting data for the respective merchant looked to be funded.

Along with an effort to increase efficiency in the approval and funding processes, both companies seem to hope that the partnership will also improve access to capital for small businesses across the US.

“We find ourselves in a time of rapid change, where new approaches to financing and technology are becoming increasingly important to small businesses,” said Peter Lord, CEO & Co-Founder of Codat . “Moody’s Analytics has impressive global scale and reach, so this partnership holds the potential to meaningfully reverse the credit crunch facing SMEs while opening up new profitable lines of business for financial institutions.”

“Together we will be able to extend the benefits of Codat’s two-way flow of financial data to more lenders and financial institutions, allowing them easier access to a wider data set to make high-quality, data-driven credit decisions,” said Lord.

CreditLens is a “credit lifecycle management solution” with access to large amounts of data from across the lending space. Codat’s software will enhance data transferring in the CreditLens platform by offering real-time accounting data on merchants that is instantly accessible by Moody users.

“We are excited to welcome Codat as a new accounting data aggregation technology partner to boost the value of Moody’s Analytics lending solutions,” said Eric Grandeo, Product Head for Moody’s Analytics Lending Solutions.”Codat provides a seamless interchange of real-time data to enable valuable credit insights and predictive capabilities.”

“We are both dedicated to helping financial service businesses gain [a] deep understanding of their client’s risk and behavior, and make better decisions based on real-time accounting, banking, and commerce data,” Grandeo continued. “Ultimately, the partnership will afford small businesses across the U.K and U.S. access to more credit options, opportunity and growth.”

Shopify Releases 3 Years of Shopping Trends: 1 Million Merchants Say Pandemic Purchases New Normal

December 14, 2020
Article by:

future of commerceShopify released a treasure trove of data from customer surveys collected in the past three years. The firm reached a milestone of 1 million businesses using their platforms this year. The data Shopify gathered paints an accurate portrait of a dramatically going-digital world.

“2020 has accelerated the industry by a decade, permanently altering the way entrepreneurs start, run, and grow businesses, as well as how consumers choose to shop and pay,” President of Shopify, Harley Finkelstein, said in an introduction. “Consider this report your crystal ball into the future of this industry.”

Finkelstein put forth five key predictions based on the trends Shopify found in the data. Be prepared, Finkelstein warns, for a new generation of retailers and consumers to forever change the world of commerce.

Key prediction one: Young consumers will change the business landscape as eCommerce charges ahead. Shopify predicts that younger shoppers changing their habits due to the pandemic will likely shop this way from now on. 67% of shoppers under 35 shifted to shopping online, compared to 57% of the 35-55 bracket.

Overall, 84% shopped online this year, compared to 65% in person. 53% of those that shopped online did so because they wanted to avoid crowds, 46% of consumers felt uncomfortable shopping in person.

Key two: Physical retail is transforming, giving local businesses new advantages. Consumer reports showed 62% of people prefer contactless purchases for in-store purchasing in 2020, an increase of 122% during the pandemic. Go figure. 94% of the point-of-sale retail lost in the first six weeks of shutdowns was replaced with online sales.

Key three: Consumers want to shop independently but are not. Businesses will adapt to make it easier to buy from a small business. Half of the consumers look for independent business owners, while 65% say they support small businesses. It turns out that only 29% of consumers shopped at a small business during the pandemic, giving ground to findings that small business is having trouble adapting to online-only commerce compared to larger chains.

Independent retailers need to make customers put their money where their mouth is. Shopify said that fast and free shipping could help. 59% of online shoppers say free delivery would improve their online shopping. 75% of merchants who generated sales in March through September did so with free shipping options on their site.

Key Four: Consumers will vote with their wallets. 53% prefer environmentally sustainable products, and 49% want the retailer to donate proceeds to charity when they make a purchase. The fourth of consumers that did buy local this year did so to support their community and local economy and create jobs.

Finally, our favorite, Key Five: Modern financial solutions will disrupt business and consumer banking finance and lending. Shopify found evidence for growth in their merchant financial platforms. 24% that applied for financing agreed with the 36% that faced problems from COVID-19 by stating: “My bank or financial institution does understand the needs of my business.”

The quality of user experience plays a massive factor for merchants; accordingly, 48% say “a good online bank or mobile app experience” is a top-three feature, while 62% of marketplace sellers say the same.

The findings conclude that explaining the trends was shared to encourage businesses to use the info to adapt and change, as they have been the past year.

CFG Merchant Solutions Enhances Partnership with Arena Investors and its Affiliates to Serve SMEs

May 29, 2020
Article by:

NEW YORK, New York., May 29, 2020 — CFG Merchant Solutions (“CFGMS”), a leading financier of small and medium-sized enterprises (“SMEs”), announced today that the company is building upon its partnership with Arena Investors, LP (“Arena”), in conjunction with Ceteris Portfolio Services (“Ceteris), an Arena servicing affiliate, in servicing and providing liquidity to Platinum Rapid Funding’s (“PRF”) merchant portfolio. CFGMS has been a leading capital provider to SMEs and an originator of advances to growing merchants, providing in excess of $400 million merchant cash advances since 2015. Arena has been CFGMS’s primary capital partner since 2016.

CFGMS and Arena are determined to prioritize the needs of PRF’s existing customers in the wake of the COVID-19 crises and its resulting impact on small businesses across the country.

“Arena is pleased to continue its partnership with CFGMS and its senior management team consisting of CEO, Andrew Coon, Chief Legal Officer and General Counsel, Robert Martini, and President, William Gallagher. Together, we remain deeply committed to serving the needs of PRF’s existing customers, particularly for ongoing financing and liquidity needs in an environment when even much larger businesses struggle to attract capital,” said Victor Dupont, who leads Arena’s investments in the financing of the SME sector. “We welcome further involvement with PRF’s customers and their affiliated ISOs and are committed to working collaboratively with all throughout the COVID-19 crises and beyond”.

“Arena and its affiliates have built a reputation as a group that combines uniquely flexible capital with broad-based expertise in servicing, resolutions, and SME finance,” said Coon. “So, while we excel at sourcing, originations, and underwriting, we felt that they brought a critical level of IP and know-how that is uniquely suited to benefit all parties in today’s environment. Combining forces to offer a broader set of servicing solutions to the MCA market segment made complete sense.”

Jonathan Pike, CEO of Ceteris, added: “Ceteris is excited to work with CFGMS and Arena by offering best-in-class servicing strategies and assisting merchants in a difficult economic environment.”

The Small Business Association (“SBA”) estimates that traditional banks still reject approximately 90 percent of SME loan applications. Since 2015, CFGMS has emerged as a proven platform that leverages sales partner relationships, analytics, and proprietary underwriting to provide SMEs with a straightforward and streamlined access to critical funding. The company addresses the fundamental capital needs of SME owners across a broad credit spectrum and through every stage of a business’s life cycle.

SMEs across a wide variety of industries that include restaurants, retail stores, salons, spas, dry cleaners, auto body shops, and professional offices. All of these businesses, and more, rely on CFGMS to secure the necessary capital they need to grow.

For questions or funding solutions, please contact:
– William Gallagher
– (646) 880-3817
WGallagher@CFGMS.com

– Ryan Banda
– (856) 545-8322
rbanda@ceterisassetsolutions.com

About CFGMS

Headquartered in New York, NY, CFGMS specializes in providing financing to support the growth and development of underserved small-to-medium sized businesses that lack access to traditional bank funding. Founded in 2010, CFGMS’s affiliated company, CapFlow Funding Group, provides factoring, purchase order finance, and asset-based lending solutions. CFGMS and CapFlow have together provided over $1 billion in liquidity solutions to their SME clients. For more information please visit www.cfgmerchantsolutions.com

About Arena Investors, LP

Arena Investors is a privately held, SEC-registered, global alternative investment firm which combines mandate flexibility, proprietary sourcing and systems-plus-servicing to enable solutions for those seeking capital. The firm was founded in 2015 and is headquartered in NewYork with additional offices in Jacksonville, London, and San Francisco. For more information, please visit www.arenaco.com.

About Ceteris Portfolio Services

Ceteris is a nationally licensed servicing company providing debt recovery solutions and other related services for consumers and commercial businesses across a broad range of financial assets. Ceteris provides first- and third-party revenue cycle management, business process outsourcing and portfolio backup servicing to heavily regulated, high volume industries including banking, automotive finance, credit card, equipment leasing, medical, telecommunications, utilities, retail and other industries. For more information please visit www.ceterisholdco.com.

TBF Financial buys $100 million of charged-off loans, leases and merchant cash advances from fintechs, banks, lessors

January 14, 2020
Article by:

DEERFIELD, IL, Jan. 14, 2020 – Commercial debt sales by fintech lenders, equipment leasing companies and banks are on the rise, with major companies striking deals to sell non-performing loans, leases and merchant cash advances after charge-off, reports Brett Boehm, CEO of TBF Financial.

TBF closed transactions in December totaling $100 million. The three largest deals were with a leading e-commerce company that acquired and liquidated a merchant cash advance business; a captive leasing company that provides financing for transportation equipment and other assets; and one of the 20 largest banks in the nation.

“One reason for the rise in commercial debt selling is the tremendous growth of online alternative lenders,” he explains. “As their business originations have increased, so have the number of accounts that eventually default. By selling commercial debt at charge-off instead of spending years trying to collect it, they can put that money back into making loans and merchant cash advances where they generate a much better return.”

“Other lenders and lessors also recognize that it is more productive to concentrate on their core business rather than chase collections past charge-off,” he adds. “Selling commercial debt provides immediate cash and allows collections personnel to focus on accounts that are more likely to be recovered, earlier in the past-due cycle.”

While the December deals may additionally reflect the eagerness of companies to bring in cash before year’s end, Boehm says prospective deals in the pipeline remain high in January, and he anticipates a busy first quarter 2020.

About TBF Financial

TBF Financial is the leading purchaser of non-performing equipment leases, commercial bank loans, online small business loans and merchant cash advances in the U.S. Founded in 1998, the company buys commercial accounts up to four years old from the date of last payment. This includes equipment leases, loans and lines of credit that have personal guarantees, no personal guarantees, are secured, unsecured, pre-agency, post-agency, pre-litigation, and reduced to judgment. For more information, visit tbfgroup.com or contact Brett Boehm, CEO at bboehm@tbfgroup.com, 847-267-0660 or via LinkedIn.

Media Contact: 

Carla Young Harrington

Susan Carol Creative for TBF Financial

540.479.7835

carla@scapr.com



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