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Homegrown Software Enables FundKite to Reconcile MCAs Daily Rather Than Monthly

September 21, 2021
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mainframe fundkite“Data is the future,” said Alex Shvarts, CEO of FundKite. Through his own proprietary software that he personally built, Shvarts and his team can see daily deposits from merchants that FundKite has funded while also viewing the real-time financial condition of their customers. There are no assumptions, no end-of-month scrambling to do MCA reconciliations, and there are significantly less defaults, he says.

Shvarts believes that he has a better chance of retaining clients and keeping deals in place when customers face difficulties. “When merchants are in trouble, they are being coached not to pay,” he said, hinting at third parties in the industry that lobby customers to stop payment in exchange for some kind of alleged assistance.

“Our merchants don’t go under,” Shvarts said.

The premise is that FundKite’s tech enables both themselves and the customer to keep track of how much money is going in and out in real time. That allows them to apply the precise holdback on a daily basis instead of waiting for a bank statement at the end of the month to see what the difference was.

“Our goal is to use our software to be extremely merchant friendly,” said Shvarts.

New York CityBy compiling different data sets about the merchant, potential clients can be pre-approved and fully funded in less than an hour through a completely digital application process. While this process of instant pre-approval isn’t new to the industry, it’s the idea of having access to client’s banking information that is key to the software’s accuracy and success in funding packages and payment options.

The idea of end-of-month reconciliation doesn’t work for many merchants, according to Shvarts, who was speaking in reference to merchant cash advance transactions. “A month later, they could already be in the hole,” he said. “This product [where debits vary daily based upon true sales] works better for merchants, it works better for portfolios, if you’re actually reconciling and pulling what you’re supposed to, and not what you’re anticipating.”

The system is maintained in-house at the firm’s downtown Manhattan offices, with a fully temperature-controlled server room that is home to dozens of computers that host the company’s software. Backed up in the cloud as a failsafe, the system is as much of a presence in the office, both physically and virtually, as the individuals that work there.

“I’ve always had coding implanted in my mind, it’s an everyday process to make things simpler and faster,” he said. Shvarts explained that his love for coding and finance stems from a childhood passion for chess. “Chess taught me the ability to analyze moves.”

FundKite Event at the Jets/Bills Game Had a Big Turnout

November 3, 2017
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About 100 people attended the FundKite event at the Jets/Bills Thursday night game in The Meadowlands including several dozen ISOs. In addition to premium seating and sideline access through the 50 Club, a select group got to stand on the field during the national anthem. Below is a handful of snaps I took at the game:

FundKite’s Alex Shvarts leads guests out on to the field

Guests on the field

Guests on the field

Selfie on the field

Inside the Met Life 50 Club

The seats

Pretty close to the action

Bills Running Back LeSean McCoy looks right at us

Great experience

deBanked to Attend FundKite ISO Event at Met Life Stadium Nov. 2nd

September 29, 2017
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New York JetsIt’s unlikely the New York Jets will be dreaming of the Super Bowl come November 2nd when they play the Buffalo Bills, but MCA company FundKite is hosting a VIP event for select ISOs/brokers at Met Life Stadium in East Rutherford, NJ that day.

According to FundKite, sales reps that hit certain funding targets will be invited to join the actual football players on the field for the pre-game warmup. The company is also offering attendees 50-yard line seats and complimentary food and beverages.

The catch is that reps have to fund more than $150,000 or $300,000 with FundKite before October 26th. Reps outside the Tri-State area will be flown in, courtesy of the company.

deBanked’s Sean Murray will be in attendance.

For more information, contact FundKite at

Judge Grants Restraining Order Against Deceptive Funding Company

May 6, 2018
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Court OrderJTT Funding, the company previously accused of having forged a Confession of Judgment, stands accused now of stealing the identity of a rival funding company. On May 3rd, New York Supreme Court Judge W. Franc Perry granted an injunction against JTT Funding from using the name, logo and likeness of Accel Capital from its marketing and contract materials.

Similar to the forged COJ suit (which was brought by FundKite), JTT Funding did not answer or contest the claims.

Plaintiff Accel Capital demonstrated in their papers that an agent of JTT was using a gmail address with “accelcapital” in the name and the company’s logo in its contracts. When a merchant funded by JTT Funding (who pretended to be Accel) inadvertently contacted the real Accel Capital, the scheme was revealed.

JTT Funding went on to ignore Accel’s Cease and Desist letter, court papers say, which led to the lawsuit and demand for an immediate injunction.

According to the Financial Times, JTT Funding is owned by Queens-born mixed martial arts fighter Jim “The Tyrant” Boudourakis. In his October 2017 interview with the publication, Boudourakis said, “There was a learning curve, going from being a fighter to a salesman. But I’m good with people.” FT also reported that his company had 18 full-time salespeople and was funding $4 – $5 million per month.

In the FundKite suit, it is alleged that Boudourakis’ first name Jim is an alias.

The Accel Capital suit can be found in the New York Supreme Court under Index Number: 153447/2018

Defendants in Forged COJ Case Failed to Respond to The Complaint

January 16, 2018
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The lawsuit brought by FundKite against defendants alleged to have forged a Confession of Judgment (COJ) is not going so well for the defendants. Last week, FundKite filed a proposed order for a default judgment since none of the defendants ever appeared to defend themselves.

notary stampMeanwhile, circumstances surrounding the suspicious notary stamp on the COJ in the case have become a lot more clear. Originally, the merchant asked how a New York notary stamp ended up on the documents he claims are forged when the merchant himself resides in Florida.

According to an affidavit by Jennifer Gately, the notary, she was asked by someone employed by the ISO to sign off on a document for a merchant without the merchant present. She refused. Soon after, her notary stamp was stolen. She not only reported this theft to the National Notary Association, but she also filed a police report.

The relationship between the person working for the ISO and her, is that they both lived at the same address, explaining how the theft would’ve been relatively easy to carry out.

“I have never worked with any of the listed defendants on any matters, including concerning financial transactions,” she declared.

The case is filed under Index Number: 656692/2017 in the New York Supreme Court. You can download the original complaint here.

Ford, MCA Funders Take Pages from Tech-Based Underwriting

August 29, 2017
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FordAlternative lending fever has spilled over into the auto sector, evidenced by the financing arm of automaker Ford’s decision to move beyond FICO and deeper into machine learning for credit decisions. Ford is moving toward alternative lending strategies in an attempt to capture a wider swath of borrowers, including those with “limited credit histories,” and bolster auto sales.

Ford’s decision comes on the heels of a study with fintech play ZestFinance, the results of which favor a machine-learning based approach to credit decisions.

Ford’s decision comes on the heels of a study between Ford Credit and fintech play ZestFinance, the results of which favor a machine-learning based approach to credit decisions.

“There is absolutely no change in Ford Credit’s risk appetite. Ford Credit is maintaining the consistent and prudent standards it has applied for years. This enhanced ability to look at data will help us more appropriately place applicants along the full spectrum of the risk scale. The result will be some that some people may appear on that scale who did not before, and some applications that are approved today might not be approved in the future. The risk appetite remains the same,” Ford Credit spokesperson Margaret Mellott told deBanked.

Until now, there has been no aspect of machine learning in Ford Credit’s underwriting process.

“The study showed improved predictive power, which holds promise for more approvals … and even stronger business performance, including lower credit losses,” according to Joy Falotico, Ford Credit chairman and CEO, in a press release.

Ford is targeting consumers with a lack of credit history, especially the millennial generation.

Tech-Driven Underwriting

While Ford embraces tech-driven underwriting, this style is already knit into the fabric of the MCA and online lending communities.

To name a few, Upstart takes a machine learning approach. FundKite developed algorithmic-based underwriting. UpLyft’s underwriting process has an automated component to it.

technologyAlex Shvarts, CTO and director of business development at FundKite, a balance-sheet based funder, said the company has been writing algorithms since the early days. Now the tech- and algorithm-driven funder wants to expand into small business lending in Q1 2018.

“We’re building our technology to the point that by Q1 next year, we will get into automated loan products. Our technology will be able to underwrite loan products within seconds. We have a lot of data we put together, which allows us to price deals and make offers relatively quickly,” he said.

By a lot of data, Shvarts is referring to hundreds of data points that are used to measure merchant performance. FundKite, which has a default rate of far less than 10 percent, takes the data, reworks and combines it, leading to a fast result.

“Besides the data points we look at the merchant from a collections point of view. If this person or business runs into trouble, could they go out of business or would they be okay?” he said.

That’s where the human element to the underwriting process comes in.

Human Element

While FundKite relies on algorithm-driven underwriting, the funder is not running an online app yet. There is still a need for human participation surrounding data input, information that is then verified by machines.

“The human element is entering the information correctly, and the machine spits out predetermined pricing based on the business data points and industry,” said Shvarts, adding that FundKite views that information in the context of micro-trends in the industry as well as the overall market environment.

“We know that during certain seasons some merchants perform worse than others. The numbers say the merchant should get this, but we dig a little deeper and say no, this merchant can’t handle this much of an advance and repayment along those lines. The final touches are done by humans. Our technology is advanced so that we are able to get to that point a lot faster and more accurately,” Shvarts said.

Second Opinion

Michael Massa, CEO and founder of Uplyft Capital, points to a hybrid approach in the company’s credit underwriting, referring to the automated scoring portion of Uplyft’s underwriting model as a second opinion. “We believe there must be a hybrid of human and automated technology,” said Massa.


Uplyft relies on a proprietary scoring model. The model includes an automated function that attaches a unique rating to the small business based on certain features in the prospective borrower’s profile, such as a home-based versus business location and the number of years the company has been in business, to name a couple.

“It’s only as second opinion for our underwriters, really,” he said, adding that cash flow and affordability are major drivers of the credit decision. “In most cases we price at max affordability for the client while protecting them from overleveraging their accounts, allowing us to provide real help and establish merchant loyalty.”

old payphoneSecond opinion or not the automated function is part of what makes Uplyft a fintech play, setting the funder apart from the banks. “They’re like the payphone and we’re the iPhone. They’re yellow cab and we’re Uber,” said Massa, adding better yet, “we’re Lyft.”

Uplyft is in the process of developing a trio of portals designed for merchants, sales partners and investors to be released shortly. “We are API-ing that now into our CRM,” said Massa.

Merchants can access the portal to apply for funding while sales partners use it to submit files and view a status. Investors can track their participation via the portal. The new portals will be available on the website and through a mobile app that Uplyft is in the final stages of developing.

Uplyft also recently inked an exclusive partnership with an undisclosed software company allowing merchants to link their bank account to the application, capturing six months of actual PDF bank statements in the process.

“It can help us with the initial credit decision and when we’re conducting final verifications. We get the actual bank statement. It’s a legitimate bank statement, not a rendition,” said Massa.

Fintech & Auto Finance

As for the auto industry, don’t be surprised to hear about further collaboration between the automakers and the fintech market. “Financial technology is key … as fintech can contribute to an even more seamless and better personalized vehicle financing experience for the consumer,” according to the Ford press release.

Threads on deBanked


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fundkite (these are people i've seen recently in statements), , post was edited to add: biz buzz...

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fundkite has the system to handle this, then good for them. i would think weekly and monthly repayments would be much easier to handle but daily can be done., , i agree if they can handle this type of labor intensive task, good for them, sounds like a nightmare to me logistically speaking. but then again my name is not alex shvarts...

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fundkite has some sort of authority over the account, which would only happen if the bank signs off and approves it prior to funding, and even then they would need to login everyday and adjust it accor...