Since: December 2016
|South End Capital launches SBA Express
|South End Capital delivers 0% down payment
|Stearns Bank acquires South End Capital
|South End Capital reopens SBA program
|South End Capital celebrates 10-years
Expansion Capital Group (ECG), which secured new financing at the beginning of the month for a total senior debt capacity of nearly $60 million, is based in Sioux Falls. That’s in South Dakota. With most alternative lenders based in New York, Florida or California, ECG is definitely unique geographically. But the company’s CFO Tim Mages told deBanked that despite the relative obscurity of the city, with a respectable population of 183,000, the city is a very good place to start a business. Particularly in the finance sector.
According to a 2017 survey conducted by CNBC and SurveyMonkey, Sioux Falls is among the top 15 American cities optimal for starting a business. Why? Because South Dakota has no individual or corporate income tax and business costs are more than 20 percent below the national average. As one of the fastest-growing areas in the country, Sioux Falls has a rate of population growth that’s nearly four times the national average, according to the survey.
Also, Wells Fargo and Citibank both have a significant presence there, so there is an existing pool of talent in the lending space.
In addition to ECG’s unusual geography, the way it obtains the bulk of its business is also uncommon. Mages said that 50% of its business comes from other lenders who either turn down the applications or don’t have enough capital to lend to merchants. Mages said they can “turn coal into diamond.” The company primary funds B- to C- paper deals and services a variety of industries with the bulk coming from transportation/trucking, construction and business services. ECG provides loan products, which compose about 80% of the business, as well as merchant cash advance, which makes up the remaining 20%.
Mages expressed a lot of enthusiasm for the company’s technology, which he said is very helpful because it can save a lot of time. For instance, he said their system auto-declines 25 to 30% of the applications they receive, which can be between 3,000 and 7,000 a month.
“We then want to get as competitive as we can [for the right applications,]” Mages said.
ECG ranked #802 on 2018’s Inc. 5000 list of fastest growing U.S. privates companies. Founded in 2013, ECG now employs 65 people. According to Mages, there are 23 underwriters and 11 internal salespeople, plus in-house legal and regulations team, a marketing team and a merchant support team. There is a tiny office of two people in Delaware.
Expansion Capital Group Announces $1 Billion Funding Milestone — Supporting the Expansion of U.S. Small BusinessesDecember 13, 2023
L-R: Herk Christie, Chief Operating Officer; Brittney Newell, Chief Financial Officer; Vincent Ney, Chief Executive Officer;
Tim Mages, Chief Strategy Officer; Mike Beattie, Chief Technology Officer
Photo Credit: Reistroffer Design
SIOUX FALLS, SOUTH DAKOTA—Expansion Capital Group, LLC (“ECG”) is pleased to announce its billionth dollar in funding, reinforcing its mission to support the “Expansion” of America’s Small Businesses with simple and efficient capital. Since inception in 2013, ECG has provided services to over 20,000 small businesses across multiple industries nationwide. ECG’s core solution, a six to 11 month working capital product, meets the needs of small business owners that are not in a position to wait for a traditional bank loan.
Tim Mages, Chief Strategy Officer of ECG said, “The ECG team is proud of its efforts to fulfill the capital needs of small business owners. Capital challenges have been magnified since COVID and the recent muted lending environment by regional and community banks. During the last three years, inflationary pressures have negatively impacted many hardworking small business owners. ECG has continued to be a reliable partner and a key resource as business owners navigate these headwinds.”
He continued, “In the last two years, we’ve seen accelerated growth of our platform. This growth is being driven by two key factors. First, our industry-leading Partner Portal is designed to create a transparent and seamless process for our referral partners. Second, investments in new technology and data sources have positioned ECG to provide underwritten approvals in less than an hour. These innovations would not have been possible without the trust of our valued customers and dedication of our 85+ team members.”
ECG’s Chief Operating Officer, Herk Christie, said, “Paramount to our success is the support from our referral partners. Since inception, we’ve also seen over one million applications from small business owners. Our financing alternatives provide business owners with more options and availability, so they can successfully execute their business objectives.”
As an on-balance sheet working capital provider, ECG is committed to providing customized solutions for small businesses. ECG works directly with small business owners and with hundreds of referral partners who are trying to meet their clients needs. ECG utilizes proprietary data, analytics, and systems to provide access and capital in a timely manner. Its robust underwriting models and flexible Partner Portal platform allows business owners to compare options and select a product that fits their needs.
Brittney Newell, ECG’s Chief Financial Officer added, “We hope to continue this growth in the coming years and appreciate the support of our long-time capital provider Bastion Management. As many market participants have tightened lending standards throughout 2023, ECG is committed to continuing to meet the increased demand for our services and offerings.”
PR Contact: email@example.com
Expansion Capital Group is headquartered in Sioux Falls, SD and operates as a technology-driven specialty lender harnessing data and analytics to offer tailor-made solutions for small business enterprises. The company primarily serves small businesses across the United States with annual revenues of less than $10 million. For more information, please visit www.ecg.com and follow us on LinkedIn and Twitter.
Recent ECG News
Sioux Falls Business Journal: Fast but careful money: Sioux Falls firm offers new kind of capital
Inc. 5000: Financial services firm partnering with small business owners to provide working capital solutions with speed, simplicity and service.
MIAMI – January 17, 2023 – eCapital Corp. (“eCapital” or “the company”), a leading finance provider for businesses across North America and the U.K., today announced the appointment of Todd Zarin as chief legal officer. As part of the executive leadership team, Zarin will oversee eCapital’s in-house legal team and be responsible for all legal operations for the company.
“Todd’s proven aptitude and demonstrated ability to skillfully navigate complex legal scenarios make him a valuable addition to our executive leadership team,” said Marius Silvasan, chief executive officer of eCapital. “I am confident his expertise will prove instrumental as we continue to enhance our service offerings and expand into new markets to meet the financial needs of even more organizations.”
Zarin’s legal and corporate career spans more than 20 years, with strategic roles helping public and privately held clients in financial services and other industries succeed while navigating critical moments. Throughout his career, Todd has been instrumental in driving business objectives such as strategic mergers and acquisitions, securing funding through various transactions, and guiding companies through initial public offerings. He also provided guidance and direction on corporate governance and securities law compliance matters.
As a seasoned lawyer and board member, he has served clients in multiple capacities, including as general counsel to a South Florida financial services company and as outside counsel with premier law firms such as Weil, Gotshal & Manges and, most recently, as a shareholder at Miami-based Stearns Weaver Miller. Zarin has also helped clients as a strategic and transactional advisor through his own consultancy.
“eCapital’s unique approach to strategic growth while changing the shape of the alternative finance and lending landscape is exciting,” said Zarin. “The leadership team has a well-defined and ambitious vision for the future, and I look forward helping achieve the company’s long-term goals and continue driving the company’s dynamic growth trajectory.”
Zarin is a member of the Florida and New York bars and earned his Juris Doctor from Brooklyn Law School. He also holds a Master of Business Administration from the Kellogg School of Management at Northwestern University.
About eCapital Corp.
eCapital is committed to accelerating access to capital for companies in the United States, Canada, and the U.K. By leveraging a team of over 800 experts and proprietary, industry-leading technology, eCapital is creating the future of business funding. With a full suite of products such as freight factoring, invoice factoring, lines of credit, asset-based lending, payroll funding, and equipment refinancing, eCapital ensures businesses have the funds they need to do more. Through its Transportation, Staffing, Wellness, Healthcare, Factoring and ABL divisions, eCapital delivers customized funding solutions for over 80 industries. To learn more about eCapital, visit eCapital.com.
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KINGWOOD, Texas – Nov. 2, 2021 – Ascentium Capital LLC, a national commercial lender, announced continued growth during the third quarter of 2021. Financing volume increased $82 million, up 26% from the prior-year period. Strategic execution and ongoing economic recovery resulted in strong performance this quarter.
“Ascentium remains focused on delivering an exceptional customer experience supported by operational efficiencies, service excellence and competitive financing products. These core competencies are resonating with our clients and contributing to our positive momentum going into the fourth quarter,” said Tom Depping, executive vice president and Ascentium group manager.
Ascentium Capital offers specialized equipment financing and business loans to commercial entities nationwide. The company also provides customized finance programs for equipment manufacturers and distributers with simplified application procedures to help businesses in a broad array of industries including commercial vehicles, energy, franchise, healthcare, industrial, and technology.
“Quarter-over-quarter originations growth remains steady as we continue to satisfy our customers’ demands,” added David Lyder, senior vice president of Ascentium Sales and Marketing. “We are recruiting additional sales resources and refining existing products to keep pace with, and anticipate, our customers’ needs. Our top priority is helping our customers grow their businesses.”
About Ascentium Capital LLC
Ascentium Capital LLC, a subsidiary of Regions Bank, specializes in providing a broad range of business equipment financing, leasing, and loans across the United States. The Company’s offering is designed to benefit equipment manufacturers and distributors as well as direct to businesses nationwide. For additional information about Ascentium and its business financing products and services, please visit AscentiumCapital.com.
About Regions Financial Corporation
Regions Financial Corporation (NYSE:RF), with $156 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates more than 1,300 banking offices and approximately 2,000 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.
Christine Kimball, Vice President, Marketing
Ascentium Capital LLC
Ascentium on Twitter: @AscentiumTeam
A class action lawsuit filed in the Southern District of Florida on behalf of MJ Capital Funding’s investors is alleging that Wells Fargo knew that the company was a ponzi scheme.
“Wells Fargo knew based on its Know Your Customer inquiries that the MJ Companies were supposed to use investor monies to lend to small merchants, which would then repay the loans, the proceeds of which would be used to pay back investors. Wells Fargo monitored the MJ Companies’ accounts and saw that’s not what happened. Very little money that left the MJ Companies’ accounts went to merchants. Millions instead went to [the CEO’s] personal account at Wells Fargo, to MJ Companies’ sales agents or back to other investors.
Despite this knowledge, Wells Fargo substantially assisted the MJ Companies by allowing them to continue operating with Wells Fargo accounts, commingle investor funds and make payments via wire, transfer and check. Garcia and the MJ Companies’ banking activities at Wells Fargo were integral to her scheme to defraud investors.”
The claims are for aiding and abetting fraud, aiding and abetting breach of fiduciary duty, and unjust enrichment.
MJ Capital is estimated to have raised between $70M and $128M from investors over roughly one years time. The company is being sued by the SEC for securities fraud and its assets have been frozen pursuant to a court order.
The case # is: 0:21-cv-61749-RAR
Change is happening south of the border. Online lenders and alternative funders are growing across Mexico much the same way as elsewhere. This week, Credijusto, an online small business lender based in Mexico City, acquired Banco Finterra, marking the first time that a fintech has acquired a bank in the country.
According to Reuters, “Credijusto aims to ramp up services for Mexican companies that sell to the United States, and build a business for U.S. companies that do cross-border trade in Mexico and beyond in Latin America.”
Mexico also has more than 6 million small businesses, a market that is effecively 4-6x larger than Canada’s.
Prior to this, Credijusto had already collectively raised $400M from Goldman Sachs, Credit Suisse, Point72 Ventures, New Residential Investment Corp., Kaszek, QED Investors, John Mack, Ignia, Promecap and LIV Capital.
“The acquisition of Banco Finterra seeks to create the first truly digital banking platform for Mexican companies in the future,” commented Allan Apoj, co-CEO of Credijusto. “This transaction marks an important milestone in Mexico and the region, and we are proud to be revolutionizing the future of banking in Latin America.”
Apoj’s partner, co-CEO David Poritz, hinted to Reuters that in a couple of years it may consider the acquisition of an American bank as well.
Earlier this year, Mexico began to allow fintech companies to obtain a Financial Technology Institution license.
Estamos muy orgullosos de revolucionar el futuro de la banca en México con la adquisición de Banco Finterra y de beneficiar así a las empresas a través de productos financieros de nueva generación. Conoce más de este gran logro: https://t.co/pbGBVyo04p pic.twitter.com/A32vaHDOB1
— Credijusto (@credijusto) June 15, 2021
Andrew Dale Ledbetter, a veteran securities attorney who once co-authored a book called How Wall Street Rips You Off – and what you can do to defend yourself, now stands accused of ripping investors off.
Ledbetter was criminally charged on Tuesday by the US Attorney’s office in South Florida for his alleged role in the 1 Global Capital Securities fraud case. Ledbetter was formally accused of Conspiracy to Commit Wire Fraud and Securities Fraud. He was simultaneously hit with civil charges by the Securities and Exchange Commission.
Both agencies say that Ledbetter reaped nearly $3 million in referral fees from 1 Global Capital in exchange for raising nearly $100 million from investors, mostly retirees, all while making knowingly false statements and misrepresentations about the investments. For instance, they say that he knew the investments were securities but claimed they weren’t anyway. Similar circumstances brought down Florida attorney Jan Douglas Atlas last year. Ledbetter had been compensating Atlas on the side as part of the alleged scheme.
Ledbetter is the 4th individual to be criminally charged in connection with the 1 Global Capital case. The other three: Atlas, Alan G. Heide, and Steven Schwartz, have all already pled guilty.
Susan Lyon, managing director at an independent commercial film company in Solana Beach, California, can’t say enough good things about the quick action her bank took to help her secure emergency government funding during the current pandemic. “They sent out all the forms right away” enabling her to file an application on Friday, April 3 — “the earliest day possible” — she says of the Bank of Southern California. “Then they kept in touch after we sent all the pdf’s back, and they started uploading the loan applications when the Small Business Administration’s website went live the following Thursday.
“The very next day, which was Good Friday,” she adds of the San Diego-based bank, “they e-mailed me at 7 p.m. to say the funds are coming — and two hours later they e-mailed me to say that ‘the funds are in your account.’ It was a high-touch experience.”
Lyon says she will use the bulk of the $130,000, which she received under the government’s Paycheck Protection Program, to pay the salaries of the eight fulltime employees at Lyon & Associates, of which she and husband Mark own 90%.
Lyon’s friend Jennifer Biddle was not so fortunate. Biddle, who operates a flower-growing and distribution business with her husband Frank, has been emotionally devastated, she says, since Torrey Pines Bank dropped the ball on her application for $285,000 to pay employees during the crisis.
“They created an administrative nightmare,” Biddle says of her San Diego-based bank, which failed to forward her paperwork to the SBA. “Being disappointed doesn’t begin to describe my feelings,” she adds.
Based in Vista, California, FBI Flowers has roughly $6 million in annual sales, 40 employees, and a monthly payroll of $114,000. Like her friend Susan Lyon, Biddle also applied for PPP funding on April 3. But she didn’t hear back from her bank for several days “and we thought (the application) was processing,” she reports. When the bank did get back to her a week later, it was to say, “‘We need this other form,’” she says, quoting the bank. “And then they wanted our addendum revised.”
By the time the SBA made the announcement on April 16 that the agency had exhausted the $349 billion allocated by Congress, Torrey Pines was still sitting on her application. “To me it’s negligence,” Biddle says.
“We’re in the middle of our growing season and money is hardly coming in,” she adds. “Our employees are part of a vulnerable population, We were really counting on our bank to do their part and get the application to the SBA. This was what my kids would call ‘an epic fail.’”
Neither Torrey Pines Bank nor its Phoenix-based parent company would comment. “Unfortunately,” Robyn Young, chief marketing officer at Western Alliance Bancorporation, told deBanked, “our bankers are not able to share any information about our clients or client transactions.” (According to a tagline in the e-mail, Forbes magazine has named Western Alliance to its list of the “Ten Best Banks in America” for the past five years in a row.)
Lyon’s and Biddle’s accounts are just two stories – one a rousing success, the other an abject failure – emerging from the Paycheck Protection Program, which was created as part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Since the bipartisan bill was signed into law by President Trump on March 27, the SBA has approved 1.66 million small business applications.
Under the PPP, small businesses and self-employed individuals must apply for emergency funding through banks and designated non-bank lenders. Congress authorized the SBA to make emergency, low-interest loans of up to 2½ times a business’s monthly payroll to pay their employees’ wages for eight weeks.
If, after eight weeks, businesses can show they’d spent 75% of the government money keeping furloughed employees on the payroll and covering their health insurance, the loan will be forgiven. The remaining 25% of PPP funding will convert to a grant if it’s spent on rent and utilities.
Now, as the program is being rebooted with new Congressional action for a second round of funding totaling more than $300 billion, many applicants fear that they will again be left out in the cold. “We’ve been hearing that many banks have not been able to handle the torrent of applications,” says Gerri Detweiler, education director at Nav, Inc., a Utah-based online company that aggregates data and acts as a financial matchmaker for small businesses.
Detweiler reports that she and her team at Nav have been working 14-hour days since the CARES Act was signed into law fielding calls and responding to e-mails from the company’s 1.5 million members looking for assistance in navigating the PPP rules. One common experience for small business applicants has been that “many of the banks have been prioritizing customers with deeper and more longstanding relationships,” she says.
One small business owner in Texas, Edward L. Scherer, filed a federal lawsuit in Houston on Easter Sunday charging that Frost Bank, which is headquartered in San Antonio, violated the CARES Act and SBA rules by refusing to accept PPP applications from non-customers. Class action suits alleging illegal favoritism have also been filed against Bank of America, Wells Fargo, J.P. Morgan Chase, and US Bancorp.
For customers and non-customers calling on Bank of America, this would come as no surprise. The Charlotte (N.C.) based giant makes clear that it will only process applications for regular customers. A notice on the bank’s website, declares that only “small business clients who have a lending and checking relationship with Bank of America as of February 15, 2020, and do not have a business credit or borrowing relationship with another bank, are eligible to apply for the Paycheck Protection Program through our bank.”
Although the PPP has been heralded as a way to rescue mom-and-pop businesses, national chain restaurants like Ruth’s Chris Steak House and hotels operating franchises have benefited handsomely. Ruth’s Chris alone received $20 million in crisis funding, according to The Wall Street Journal, which first reported the story.
For the bulk of the country’s small businesses “the money has been trickling in very slowly,” says Sarah Crozier, senior communications manager at the Main Street Alliance, a Washington, D.C.-based advocacy organization that counts 300,000 members. Even for many businesses that have received funding, there remains widespread uncertainty that the loan will be converted to a grant. “There’s not a lot of trust that the PPP loan will be forgiven,” Crozier says. “There’s a lot of confusion.”
That’s a major concern for Randy George, owner of Red Hen Bakery in Middlesex, Vermont – a speck of a place off I-89 near Montpelier, the state capital – who does not want to take on extra debt. Until a month ago, George had been running a $4 million (sales) operation which employed 48 employees. He’s closed down the café, he says, which accounts for about 60% of annual receipts, while keeping on 20 workers to run the bakery.
That operation – which turns out baguettes, croissants, sticky buns and other baked goods for wholesale distribution – has actually ramped up. With most restaurants temporarily shuttered, more New Englanders are eating at home, resulting in the bakery’s nearly doubling its sales to regional grocery stores and supermarkets.
Meanwhile, George has received $411,000 in PPP funding, which he applied for through Community National Bank, located in Barre, Vt., and he’s paying many of his 28 furloughed employees to remain idle. Because of the way the CARES Act program is structured, he says, it’s in his interest to convince laid-off employees not to collect unemployment compensation which includes an extra $600-a-week federal benefit and lasts longer than the eight-week PPP.
“I just called one of my fulltime employees and told him he’ll get to keep his health care if he stays on the payroll,” George explains. “But for part-time people it’s awkward. I’m incentivized to get people back to work and they’re incentivized to go on unemployment.”
At the Portland Hunt & Alpine Club, a bar and restaurant in Maine with the reputation for having the tastiest cocktails in town, if not the entire Pine Tree State, the PPP is not working out for owner Andrew Volk. He secured funding “in the low six figures,” he says, but so far he’s keeping his powder dry. Instead of paying out-of-work employees, he’s letting them collect employment insurance and using a portion of PPP funding for rent and utilities. As for the remaining PPP funds, the question is whether to return the money or keep it as a loan.
Volk says the government program has done little to help him with his most pressing needs. For starters, he was forced to toss out “thousands upon thousands of dollars” worth of perishable foods since his establishment went dark on March 16. All meat, cheeses, sauces, citrus fruit, shrimp, fish and, of course, Maine lobster, went into the dumpster.
Because of a force majeure clause in his insurance policy that explicitly denies indemnification for an “act of God” – “Almost every business interruption insurance policy has a virus and pandemic exclusion,” Volk adds – he will have to eat those losses. “As a small business,” he adds, “we really need support beyond payroll.”
Even many qualified business people who have been approved for PPP funding are still waiting for their funds. Charles Wendel, president of Financial Institutions Consulting, based in Miami, applied for funding “in the five figures,” he says, through Citibank on April 4. That was nearly three weeks ago. “If I were a guy who really needed this money, I’d be screwed,” he says.
In the next round of PPP funding, those who missed out now hope they will be approved quickly by their banks or lenders and that the coronavirus pandemic is brought under control. Meanwhile, the massive unemployment and shutdown of small businesses nationwide are reshaping the contours of the U.S. economy. “Ultimately,” warns Crozier of the Main Street Alliance, “the result of this will be more corporate consolidation and monopolization. That’s what we saw coming out of the ‘Great Recession’ in 2008.”
south end capital has mismanage numerous files for the ppp. files were submitted in the first day of the ppprogram. i am only posting this for the brokers ...
South end - ppp - noah grayson = inspector general = do not submit...
south end capital has mismanage numerous files for the ppp. files were submitted in the first day of the ppprogram. i am only posting this for the brokers ...
south end capital, , they advertise subprime sba loans , , any feedback?...