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05/23/2019BFS Capital a member of both ILPA & SBFA
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Steve Denis, SBFA on Why Maryland MCA Bill Failed

March 22, 2021
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Stephen Denis Small Business Finance Association“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.”

Steve Denis Talks About SBFA Study: APR is a Bad Metric For SMB Loan Transparency

October 19, 2020
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SBFA GuideIn response to regulatory bills in California and New York that will enforce APR disclosures on small business capital providers, the Small Business Finance Association (SBFA) funded a study by Kingsley-Kleimann to find out if APR is a good metric to use for business loans.

Steve Denis, the Executive director of the SBFA, said his group supported the study because the states should test concepts with actual small business owners before passing regulation. In the NY disclosure bill awaiting signature, Denis said there was no concept testing. Some of the companies that support the bill might not have even read what it stipulates.

“You have a group of companies that are pushing these types of disclosures, for no reason other than their own self-interest,” Denis said. “We’re fine with disclosure, we are all for transparency, but it needs to be done in a way that we believe is meaningful to small business owners.”

In qualitative testing of 24 small business owners and executives who have experience taking commercial loans, the study concluded participants did not understand what APR was. The study found that the total cost of financing model was a better way to understand and compare options for their use.

“As one participant, when asked to define APR, answered: ‘I feel like you are asking a kid, why is the sky blue?’ (Participant 3, NY).” The study concluded, “In other words, [APR] is ever-present yet also inscrutable.”

Kingsley-Kleimann is a research-based organization that studies communication and disclosure for government agencies like the FTC and private or public business. Participants were selected from Califonia and NY. 

Denis said that the findings show what SMB lending companies have already known- Anual Percentage Rate is not a useful metric for short term loans. Many do not know that APR represents the annualized cost of funds for the loan term, with the fees and additional costs included.

“People don’t know what APR is; it confuses them,” Denis said. “They know it’s a metric they should use, but they don’t know why. The APR is such a marketing tool now, it’s not a valuable tool.”

The study showed most respondents thought APR was the same as an interest rate. It’s not.

merchant cash advance APRDenis said using an annualized rate for shorter-term loans or SMB loans that have no ending date worsens the problems. In those cases, firms estimate an APR, and it is inaccurate.

“When you have a merchant cash advance, there’s no term,” Denis said. “So you have to estimate a term, and I mean that is just a recipe for fraud.”

Denis said that the firms supporting California SB1235 and the New York S 5470/A 10118-A disclosure bill and taking credit for writing the laws are the same companies that will suffer under the strict tolerance of an APR rule.

“The companies pushing this, the trade associations pushing it, they like to take credit for writing the bill in California and writing the bill in New York: I don’t even think they’ve read it,” Denis said. “It’s going to subject their own members to potentially millions if not hundreds of millions of dollars in potential liability [fines.]”

The SBFA is not against disclosure by any means, Denis said, but supported other avenues. The trade group believes knowing the total cost of a loan and the cost and timeline of payments will help protect and inform borrowers better than APR. Firms that support the disclosure bill are banking off the positive press, hoping to be seen as pro-consumer protections but forcing APR will make it harder to compare the actual value of loans, Denis said. 

Denis is still optimistic that regulators will work with businesses affected by the incoming legislation. He said the NY legislature and governor’s office, as well as the California Department of Business Oversight, understand the problems of using APR.

“They’re receptive to these arguments, and they know what they’re doing,” Denis said. “The last thing they want to do is pass a bill that’s going to further confuse businesses, especially during a pandemic when businesses are relying on this capital to stay afloat.”

“A Bad Solution in Search of a Problem”: SBFA’s Response to the New York Disclosure Bill

August 6, 2020
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One Commerce Plaza, Albany, NY“It’s actually shocking to me how tone deaf those who claim to represent our industry are when it comes to policy,” is how Steve Denis, Executive Director of the Small Business Finance Association, described the Innovative Lending Platform Association’s response to and influence over the drafting of bill A10118A/S5470B. Known as New York’s APR disclosure bill, S5470B has been passed by the state legislature, and if signed by Governor Cuomo, will require small business financing contracts to disclose the annual percentage rate as well as other uniform disclosures.

Speaking to deBanked over the phone, Denis expressed disappointment with both the bill as well as comments made by ILPA’s CEO, Scott Stewart, in a recent article.

“Small businesses in New York are struggling right now,” the Director noted. “They’re waking up every single day wondering if they should even stay open or close permanently, and companies and organizations in our space are using their resources to push a disclosure bill that nobody has asked for. There’s no widespread issue with disclosure. There’s been no outpouring of complaints to regulators. No bad reviews on Trustpilot. This is a really bad solution in search of a problem. We have real problems right now, we should be coming together as an industry to help solve them. We want to make sure that capital is available to small businesses on the other side of this pandemic, and this group of tone deaf companies are spending resources trying to push a meaningless disclosure bill that’s just going to hurt the access to capital for real small businesses who are grinding and trying to figure out how to stay open. It’s unbelievable.”


The SBFA showed deBanked a list of issues and complaints made to the New York legislature regarding S5470B. According to the trade group, these were largely ignored and the bill was pushed through with the issues left in. Among these were problems relating to definitions and terms. No definition for the application process is included, nor is there one for a finance charge. As well as this, one senator was quoted using the term “double dipping” to refer to consumers refinancing debts that have prepayment penalties; which Denis said was “creating a whole new term that’s never been used or defined before, and applying it to commercial finance, something that’s never been done.”

Accompanying these complaints was one regarding how APR is calculated, as S5470B includes two different calculations for this, producing different results while not clearly defining when to use each.

NY State CapitolWhen asked why he believes these issues were allowed to remain in the language of the bill, Denis was baffled.

“I think that the companies and organizations that support this legislation don’t fully understand what’s actually in the bill. […] They have no problem pounding the table and taking credit for its passage, but I guess they don’t realize it will subject them and the rest of the alternative finance industry to massive liability, massive fines—upwards of billions of dollars worth of fines.”

Denis’s fear going forward is that funders in New York will tighten up their channels going forward or cease funding entirely, given the increased riskiness of funding under the terms of S5470B if Cuomo signs it into law. Before that happens though, the Director mentioned that he believes there will be legal challenges to the bill in the future, saying that its wording is just too unclear and poorly drafted. Adding to this, Denis said that he believes many members of New York’s state government are aware that this bill is imperfect and were comfortable with the thought of it being edited once passed. Looking forward, Denis wants the SBFA to be deeply involved in those edits, saying that they’re willing to work with the Governor, the state assembly, and the New York Department of Financial Services.

“We’re for disclosure, we think there should be standard disclosure. … Our message to the Governor’s office is ‘Let’s take a step back.’ The Department of Financial Services needs to look at our industry, they need to get to know our industry. They are the experts that understand the space, they understand disclosure, and they understand what they need to do to bring responsible lending to New Yorkers. And we would like to work with the NYDFS and a broader industry to put forward a bill that’s led by the Governor and the Governor’s office that brings meaningful disclosure and meaningful safeguards to this industry.”

SBFA Announces Support for The Small Business Fairness Act

December 7, 2018
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The bill would provide greater protection for small businesses

The Small Business Finance Association (SBFA) today announced support for S.3717, The Small Business Fairness Act introduced by Senator Sherrod Brown (D-OH) and Senator Marco Rubio (R-FL). The bill would provide the Federal Trade Commission more clarity to protect small business owners from being forced to sign a “confession of judgment” before obtaining financing. A “confession of judgment” requires a small business owner to waive certain rights in court before obtaining financing and, in some cases, allows the lender to seize the owner’s assets if there is a default.

“This is a bad practice that must be eliminated,” said Jeremy Brown, chairman of RapidAdvance and SBFA. “Unfortunately, certain small business financing providers are misusing “confessions of judgment.” We firmly support any legislation that will provide small businesses protection from the misuse of this practice. If a small business we fund runs into trouble, we believe they should be treated fairly and deserve our commitment to help resolve the issue in a manner that is professional and respectful.”

SBFA is a non-profit advocacy organization dedicated to ensuring Main Street small businesses have access to the capital they need to grow and strengthen the economy. SBFA’s mission is to educate policymakers and regulators about the technology-driven platforms emerging in the small business lending market and how our member companies bridge the small business capital gap using innovative financing solutions. The organization is supported by companies committed to promoting small business owners’ access to fair and responsible capital.

“Our core values are centered on providing fair and responsible financing for small businesses,” said Steve Denis, executive director of SBFA. “Small business owners are the backbone of the American economy and we should empower them with as many tools as possible to grow and create jobs. We look forward to working with Senator Brown and Rubio to eliminate the abuse of the “confession of judgment” and expand the role of responsible lenders nationally.”

In 2016, SBFA released best practices for the alternative finance industry to help better protect small businesses as they seek funding online. SBFA’s best practices are centered on four principles—transparency, responsibility, fairness, and security. As the industry’s leading trade association, the best practices have been agreed to by every member company and exist to give small business owners confidence in their financing decisions. These principles provide them a better understanding of what to expect from responsible alternative finance companies, which includes fully disclosing all terms and costs and ensuring the products SBFA companies offer are in the best interest of the small business customer.

The Small Business Finance Association (SBFA) is a not-for-profit 501(c)6 trade association representing organizations that provide alternative financing solutions to small businesses.

SBFA Launches Broker Council

May 11, 2018
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Jeremy Brown, RapidAdvance
Jeremy Brown, Chairman, RapidAdvance

The Small Business Finance Association (SBFA) announced today the launch of a new initiative called the SBFA Broker Council designed to create and implement a set of best practices for brokers of alternative funding products.

“I think this would create two playing fields,” said SBFA member and CEO of United Capital Source Jared Weitz. “A playing field where a group belongs to this association and we understand that that group is acting in best practice, and another group that is acting on their own behalf, and we hope that they’re acting in best practice, but we can’t verify it. Folks in our group we can verify.”   

Weitz and James Webster, CEO and co-founder of National Business Capital, are spearheading the SBFA Broker Council. They are the co-chairs and are in the process of selecting a board of other brokers.

What would membership in the SBFA Broker Council mean? It would mean abiding by a set of best practices. Weitz told deBanked that he and Webster would like to implement background checks on owners of brokerages and would like to make sure that brokers are storing data in their offices properly so that merchants aren’t vulnerable to having their private information stolen and abused.

They also want to make sure that brokers have the appropriate licenses in states that require them, that fees are being explained to merchants transparently and that merchants are not being triple or quadruple funded at once, “hurting the cash companies and the merchants,” Weitz said.

Jared Weitz United Capital Source deBanked Magazine
Jared Weitz, CEO, United Capital Source

Membership in the SBFA Broker Council would require SBFA membership. Current members include funders, ISOs/brokerage companies and vendors that are active in the alternative funding space.

“To participate, we want members,” said Jeremy Brown, Chairman of the SBFA. “We want to give [broker members] sort of our seal of approval, and we want to know that they’re going to represent the ideals we stand for.”

Brown said that brokers have a reduced membership fee: $475/month for smaller brokerages and $950/month for larger ones.

Brown, who is also Chairman of RapidAdvance, a funding company, said that having membership in or an organization that has a set of standards would give him comfort as a funder.

James Webster, National Business Capital
James Webster, CEO, National Business Capital

“[This] would give me a lot of confidence that you’re a good actor,” Brown said, “because one of the problems in the industry is that you do have people in an unregulated business that do unethical things. So knowing who to deal with is really important and valuable.”

The SBFA is a non-profit advocacy organization with a mission to educate policymakers and regulators about the alternative funding business. According to today’s announcement, a goal of the SBFA Broker Council is to promote brokers who act fairly. But how could a third party association advance a broker’s career?

Weitz said:

“We would be able to have a badge on our email and on our website that says we are SBFA broker approved, meaning that anyone who’s a part of this council…would be on the [SBFA] website so we can build credibility when we’re on the phone with a merchant. We can say, ‘Hey, you probably spoke to three or four different brokerage shops today. It’s prudent to do that…however, let’s make sure that the ones you’re talking to belong to this association because those are the ones that are going to act on your behalf, the right way.”  

Announcing the Launch of the SBFA Broker Council

May 11, 2018
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Broker Council seeks to promote responsibility to better serve small businesses

Washington, D.C.—The Small Business Finance Association (SFBA) today announced the launched a new initiative called the SFBA Broker Council dedicated to bringing together responsible brokers that serve small businesses to focus on creating best practices. The Council is co-chaired by Jared Weitz, founder & CEO of United Capital Source and James Webster, CEO & co-founder of National Business Capital. The mission of the Council will be to create standards and a certification for brokers who agree to best practices focused on four basic principles—transparency, responsibility, fairness, and security.

“We want to give small business owners confidence that the brokers they work with are trustworthy, vetted, and committed to being responsible,” said Jared Weitz. “We need to take steps to promote brokers who are acting in the best interest of small business owners and send a clear message about the valuable role we play in the small business finance ecosystem.”

“We need brokers who believe in best practices to enter the national conversation about small business alternative finance and show policymakers how we serve small business customers,” said James Webster. “We all know there are bad actors out there, but the goal of this Council is to help show the how responsible brokers are working to capitalize underserved small businesses.

“We appreciate Jared’s and James’ leadership in creating this new initiative within SBFA,” said Jeremy Brown, chairman of RapidAdvance and chairman of SBFA. “It is important we send a message to the millions of small businesses we serve that we support brokers who understand that transparency, responsibility, fairness, and security are critical to our industry’s future.”

SBFA is a non-profit advocacy organization dedicated to ensuring Main Street small businesses have access to the capital they need to grow and strengthen the economy. SBFA’s mission is to educate policymakers and regulators about the technology-driven platforms emerging in the small business lending market and how our member companies bridge the small business capital gap using innovative financing solutions. The SBFA is supported by companies committed to promoting small business owners’ access to fair and responsible capital.

“Small business owners are a powerful constituency and we want to give them the utmost confidence in the alternative finance industry,” said Steve Denis, Executive Director of the SBFA. “This includes promoting brokers who are providing transparent capital solutions that they can trust.”


The Small Business Finance Association (SBFA) is a not-for-profit 501(c)6 trade association representing organizations that provide alternative financing solutions to small businesses.

SBFA Braved Snow Storm for Spring Fly-In

March 23, 2018
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US CapitolThe Small Business Finance Association (SBFA) had their Washington DC Spring fly-in earlier this week. SBFA members met with Karen Kerrigan, the President and CEO of the Small Business & Entrepreneurship Council, on Tuesday afternoon, and Congressman Josh Gottheimer (D-NJ) in the evening.

Despite the blizzard, a handful of members continued to meet with members of Congress on the Hill on Wednesday.

Founded ten years ago, The SBFA is a non-profit advocacy organization dedicated to ensuring Main Street small businesses have access to the capital they need to grow and strengthen the economy.

Industry Trade Group Coming of Age: The SBFA is Becoming More Political

February 1, 2016
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This story appeared in deBanked’s Jan/Feb 2016 magazine issue. To receive copies in print, SUBSCRIBE FREE

By hiring an executive director, the Small Business Finance Association hopes to achieve at least two goals – taking a step toward becoming a full-service trade group and providing a public voice for the alternative finance industry.

Stephen Denis, formerly deputy staff director of the U.S. House Committee on Small Business, went to work in the new role in mid-December, setting up shop with his cell phone and laptop in a Washington, DC, area coffee emporium. He’s the SBFA’s first full-time employee.

Hiring Denis, who also has association experience, represents “the next evolution” of the trade group, according to David Goldin, SBFA president and Capify’s founder, president and CEO.

Stephen Denis Small Business Finance AssociationThe SBFA, which got its start in 2008 as the North American Merchant Advance Association, changed its name last year because members have added small-business loans to the their merchant cash advance offerings. Although the trade group’s not exactly new, it has plenty of room to grow and its leadership and members seem open to change.

“The goal is to start from scratch and take a look at everything the association is doing,” Denis told deBanked, “and to really build this out to a robust group that represents the interests of small businesses.”

Denis appears optimistic about pursuing that goal. He’s a native of the Boston area and a Harvard University graduate whose first job out of school was as an aide to Republican Sen. John E. Sununu of New Hampshire. After three years in that position, he took a job for two years with a UK-based trade association, traveling frequently to London to inform the group of Congressional action in the United States.

From there, Denis went on to become director of government affairs and economic development for the Cincinnati Business Committee, a regional association that included Fortune 500 companies among its members. After two years in that role, Denis joined the staff of Rep. Steve Chabot, R-Ohio, moving back to Washington and serving as the congressman’s deputy chief of staff during a five-year stint that ended when he joined the SBFA.

While working for Chabot, Denis also became deputy staff director of the House Committee for Small Business, the No. 2 position there, and he has held that job for the last three years. The committee’s tasks include learning as much as they can about small business, including financing, and using the information to advise members of the House on policy initiatives.

The experience Denis has amassed in government should serve the association well because his duties include briefing federal legislators and regulators on how the alternative-finance business works. With Denis as spokesperson, the industry can speak to government with a single voice, Goldin asserted.

“We are going to be aggressive in our outreach to legislators and regulators as well as be active reaching out to local, state governments,” Denis said. The SBFA will “work with other trade groups and small business groups to promote our mission to ensure small businesses have alternative finance options available to them.”

Capitol Hill

Until now, too many players from the alternative finance industry have been vying for lawmakers’ attention, Goldin said. To make matters worse, some of those seeking to influence government in hearings on Capitol Hill are brokers instead of lenders and thus may not have a perfect understanding of risk and other aspects of the business, he maintained.


“We’re hearing that there are people trying to be the voice of small-business finance that either don’t have a lot of years of experience or they’re not telling the whole story,” Goldin said. “We want to make sure the industry’s represented properly.”

Denis can draw attention away from the “noise” created by unqualified voices and focus on information that Congress needs to make reasonable decisions about the alternative finance business, Goldin maintained.

Besides getting the word out in Washington, the SBFA hopes to convey its message to the general public on “the benefits of alternative financing,” Goldin said. At the same time the group can help make small business owners aware of the finance options, Denis added.

Small Business Finance AssociationAsked whether hiring Denis marks the beginning of an effort to lobby members of Congress for legislation the association deems favorable to the industry, Goldin said only that additional announcements will be forthcoming.

Meanwhile, updated “best practices” guidelines might be in the offing to help industry players navigate the business ethically and efficiently, Goldin said. A set of six best practices the association released in 2011 included clear disclosure of fees, clear disclosure of recourse, sensitivity to a merchants’ cash flow, making sure advances aren’t presented as loans and paying off outstanding balances on previous advances.

Addressing other possible steps in the association’s growth, Goldin said the group doesn’t plan to publish an industry trade magazine or newsletter. However, a trade show or conference might make sense, he noted.

Denis said he and the board had not discussed the possibility of a test, credential or accreditation to certify the expertise of qualified members of the industry. However, associations often establish and monitor such standards, so it would be reasonable for the SBFA to do so, he added.

The association might establish a Washington office, Goldin said. “We’ll look to Steve for his thoughts and guidance on that,” he observed. Denis seems amenable to the idea. “Down the road, we would love to open an office and hire more people,” he said.

In Goldin’s view, all of those moves might help the rest of the world comprehend the industry. Understanding the industry requires taking into account the cost of dealing with risk and business operations, he said.

Placing a $20,000 merchant cash advance, for example, requires a customer-acquisition effort that costs about $3,000 and a write-off of losses and overhead of about $4,000, Goldin said. That’s a total of $27,000 even without the cost of capital, he maintained.


“Most people don’t understand the economics of our business,” Goldin continued. The majority of placements are for less than $25,000, he said, characterizing them as “almost a loss leader when you factor in the acquisition costs.”

While spreading that type of information on the industry’s inner workings, Denis will also conduct the day-to-day for the not-for-profit’s affairs. The association’s board of directors will continue to set policy and objectives.

Members elect the board members to two-year terms. Current board members are Goldin; Jeremy Brown of Rapid Advance, who’s also serving as the group’s vice president; John D’Amico, GRP Funding; Stephen Sheinbaum, Bizfi; and John Snead, Merchants Capital Access.

Member companies include Bizfi, BFS Capital, Capify, Credibly, Elevate Funding, Fora Financial, GRP Funding, Merchant Capital Source, Merchants Capital Access (MCA), Nextwave Funding, NLYH Group LLC, North American Bancard, Principis Capital, Rapid Advance, Strategic Funding Source and Swift Capital.

Companies pay $3,000 in monthly dues, which Denis characterizes as inexpensive for a DC-based trade association.

Membership could spread to other types of businesses, Denis said. “I’d like to expand the tent to other industries,” he noted. “The association is trying to represent the interests of small business and make sure they have every finance option available to them.”

But a key purpose of the trade association is to provide a forum for members to come together as an industry, Denis said. “We’re thinking big,” he admitted. “We hope that all members of the marketplace will want to become a part of it.”

This article is from deBanked’s Jan/Feb 2016 magazine issue. To receive copies in print, SUBSCRIBE FREE

Found on DailyFunder:


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sbfa may have a list similar to datamerch. might be another organization though. , , and google, some funders get pissed and leave reviews that either straight up post what happened or will say things like "this business doesn't pay their bills.", , hope that helps!...

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sbfa members, are you cool with crediblys practices? you guys sure are fucking quiet., , do you think credibly is the only place that does this? i think any funder with in house sales and a clause in the iso agreement that say they will contact after 90 days is doing this.. i give them credit for admitting it unlike most that will deny it...

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sbfa members, are you cool with crediblys practices? you guys sure are fucking quiet....