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Small Business Finance Association Releases Best Practices Just in Time
April 13, 2016
The Small Business Finance Association (SBFA) has finally released their long awaited best practices guide. The four overarching principles are transparency, responsibility, fairness and security.
Unlike other organizations that have called for APR disclosures, the SBFA believes that the total dollar cost of the transaction is the most important way to achieve that goal. It’s also because the organization’s core members are engaged in a form of factoring most often referred to as merchant cash advances. Those transactions don’t have interest or interest rates and thus no way to ascribe an APR.
As part of the announcement, SBFA VP and RapidAdvance Chairman Jeremy Brown said, “Small business owners are a powerful constituency and we want to give them the utmost confidence in the alternative finance industry. These best practices are our way to prove to small businesses that our industry will consistently offer transparent, fair, and responsible choices to meet their needs.”
The timing could not be better. Earlier this morning, Stephen Denis, the executive director of the SBFA, testified in an Illinois State Senate hearing to protest a controversial bill that would effectively outlaw nonbank business lending under $250,000.
Among the bill’s strangest rules, is the restriction on monthly loan payments to being no more than 50% of a business’s net income, which would cause all businesses breaking even or reporting a loss to be prohibited from obtaining a loan from a nonbank or nonprofit source by law.
Small Business Finance Association To Unveil White Paper
March 29, 2016
The Small Business Finance Association (“SBFA”) will soon publicly unveil a set of guiding industry principles, deBanked has learned, and they’ll fall under four broad categories that espouse transparency, responsibility, fair dealings and security.
Transparency will not just be about the disclosure of fees but also likely about the disclosure of process, methodology, and application rejection, among others.
The principles of fair dealings are unlikely to touch on pricing or costs. Instead they will be about a commitment to being truthful and fair in dealings with small businesses. That is sure to include marketing materials that are clear and understandable, an area that will undoubtedly extend out to the brokers they work with, if any.
While responsibility will speak to the notion of being a legally compliant good citizen when it comes to dealing with customers, security will be more than just the use of an SSL Certificate to access the website. Verifying the business’s legitimacy and confirming the owner’s identity are high on the list of a secure process, deBanked has learned.
SBFA members already adhere to a set of standards and have since the group was formed eight years ago. Their new white paper will serve to codify them in a way that others can adopt and conduct themselves to accordingly.
The white paper will be the first major achievement of the organization since Stephen Denis came on as the executive director in mid-December. Denis is the former deputy staff director of the U.S. House Committee on Small Business.
“The goal is to start from scratch and take a look at everything the association is doing,” Denis said in deBanked’s previous magazine issue, “and to really build this out to a robust group that represents the interests of small businesses.”
In another interview conducted for that story, SBFA president and founder David Goldin explained that he had been troubled by misconceptions over the industry’s prices. “Most people don’t understand the economics of our business,” he said.
The SBFA also plans to revamp their website in the near future.
Small Business Finance Association Accelerates Repositioning With Hiring of New Executive Director
December 14, 2015WASHINGTON–(BUSINESS WIRE)–The Small Business Finance Association (SFBA) announced today the hiring of Stephen Denis as its executive director. Denis was formerly the Deputy Staff Director of the House Committee on Small Business and brings over 12 years of public policy experience to the SBFA.
“The innovative companies that are disrupting the way small businesses access capital are creating opportunities for economic growth,” said Denis. “Traditional finance is changing out of necessity for small businesses and SBFA’s mission is to be the voice of the alternative financing industry for small businesses and establishing industry best practices and education.”
The Small Business Finance Association represents companies that offer alternative financing options to small businesses and provides guidance through establishing industry best practices, education and risk monitoring tools. The alternative finance industry has experienced dramatic change and explosive growth in recent years, prompting the need for a strong presence in Washington to protect a vital lending resource for small businesses.
“We felt it was time to bring on an experienced Capitol Hill veteran to make SBFA the leading voice for alternative small business finance in Washington,” said incoming President of SBFA and Chief Executive Officer of Capify, David Goldin. “It is time to come together as an industry to ensure we have a strong and unified voice on behalf of the small businesses we serve.”
“It’s no secret that access to capital is a top challenge for small businesses. SBFA is working to ensure that there are options available to these businesses that contribute to the vibrancy and health of the American economy,” said Vice-President of SBFA and Chairman of Rapid Advance, Jeremy Brown.
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 (formerly known as NAMAA) provides guidance and helps to influence and shape the small business alternative financing industry through leadership, education and risk monitoring tools. For more information, visit http://www.sbfassociation.org
Contacts
Small Business Finance Association
Steve Denis, 202-213-9506
sdenis@sbfassociation.org
North American Merchant Advance Association (NAMAA) Announces New Name – Small Business Finance Association (SBFA)
April 14, 2015New York, NY, (April 14, 2015) – The North American Merchant Advance Association (NAMAA), a 501c non-profit industry association that provides guidance and helps influence and shape the small business alternative financing industry through best practices, leadership, education and risk monitoring tools, announced today the changing of its name to Small Business Finance Association (“SBFA”).
“With the alternative financing industry growing exponentially into a multi-billion dollar industry, we felt it was time for the trade association to evolve with it and open itself up to all types of small business alternative financing providers hence the name change to Small Business Finance Association. This industry trade association has been the voice of small business alternative lenders for over eight years and we look forward to evolving as the alternative financing industry rapidly expands each year. We look forward to opening up our membership base to even more members that share the same best practice principals of our current membership base.”, says David Goldin, President of the SBFA
The SBFA plans on releasing an updated version of its best practices and as the largest trade association for small business alternative finance providers, the association welcomes opportunities from the press and organizations looking for information on the industry.
“NAMAA started primarily as an association of merchant cash advance providers and has evolved into an association for all types of small business alternative financing – particularly those providers of business loans. SBFA will continue to be the leading voice for this industry and we look forward to the association evolving with our industry.”says Jeremy Brown, Vice-President of the SBFA.
For companies that provide alternative financing solutions to small businesses looking for more information about becoming a member of SBFA, please visit http://www.sbfassociation.org.
About Small Business Finance Association (SBFA)
The Small Business Finance Association (SBFA) is a not-for-profit 501c trade association representing organizations that provide alternative financing solutions to small businesses. SBFA (formerly known as NAMAA) provides guidance and helps to influence and shape the small business alternative financing industry through leadership, education and risk monitoring tools. For more information, visit http://www.sbfassociation.org.
Is NAMAA Reborn? Meet the Small Business Finance Association
April 14, 2015Almost seven years ago exactly, the North American Merchant Advance Association announced their presence. As of today, they are now officially the Small Business Finance Association (SBFA). Back then, a release dated April 15, 2008 stated:
The North American Merchant Advance Association, Inc. (NAMAA) has recently been created to represent merchant cash advance providers and to promote competition and efficiency throughout the merchant advance industry. NAMAA’s members will have the opportunity to share industry education and professional development, ethical standards and best practices guidelines, the development of industry relevant products and services, and the engagement in regulatory and legislative advocacy.
Of the ten original members, a handful are no longer operating. NAMAA’s membership in 2008 arguably encompassed the entirety of the merchant cash advance industry sans AdvanceMe (now named CAN Capital). Today, the SBFA website currently lists seventeen members. The organization has clearly grown but it pales in comparison to the size of the industry in 2015.
Internal data indicates that there are well over one hundred direct providers of merchant cash advance. Several hundred more are ISOs/brokers that co-invest in merchant cash advance transactions (Strategic Funding Source has had more than 200). And there are more than one thousand ISO/brokers that resell the product nationwide.
On this basis alone, less than two percent of industry providers and resellers are members of the trade organization. Granted, the seventeen member companies likely make up at least 15% of the industry’s funding volume. Member company Merchant Cash and Capital for example, announced just last month that they had funded $1 billion since inception.
Some have viewed the organization’s membership as overly exclusive and resistant to change. A seasoned veteran of an ISO that wished to remain anonymous said prior to the organization’s announced changes that, “NAMAA served a purpose for a long time but as the industry has changed, they have not.”
Ironically, Goldin’s statement in today’s release couldn’t be any more well timed. “With the alternative financing industry growing exponentially into a multi-billion dollar industry, we felt it was time for the trade association to evolve with it and open itself up to all types of small business alternative financing providers hence the name change to Small Business Finance Association,” he said.
The shift clearly acknowledges the true dynamic of the industry’s growth, that it’s not all merchant cash advance anymore.
SBFA Vice President Jeremy Brown is quoted in the release as saying, “NAMAA started primarily as an association of merchant cash advance providers and has evolved into an association for all types of small business alternative financing – particularly those providers of business loans.”
But with lenders added to the mix of potential constitutents, is the SBFA a little light? The SBFA will now represent less than 1% of the companies selling or reselling merchant cash advances and business loans. In growing membership however, patience may perhaps be a virtue.
Jared Weitz, CEO of United Capital Source, said, “NAMAA is a beneficial association in the industry and should be choosy with who they let in.” As a broker, his company has historically not been eligible for membership.
Similarly, Chad Otar, Managing Partner of Excel Capital Management, whose company has also not been historically eligible for membership, said, “The aim of NAMAA is to help out our audience to understand and remember the information we stand for as funders and ISOs.”
Otar’s point belies a troubling trend, that many players in this industry disagree about what it is they stand for.
In a deBanked Magazine article, titled, Stacking: Is it Tortious Interference?, Robert Cook, Cathy Brennan, and Kate Fisher of Hudson Cook, LLP delved into the industry’s most polarizing debate, the practice of entering into a cash advance transaction or loan knowing that the merchant has one or more open cash advances or loans with a competitor. They wrote:
On one side are companies that only originate first-position deals. These companies generally include a clause in their contracts prohibiting the merchant from obtaining another merchant cash advance or loan until the company receives all of the future receivables it has purchased or is fully repaid. First-position companies view stacking as a threat to recovery of money advanced or loaned to merchants. On the other side are companies that routinely offer second or third-position deals. These companies argue that merchants with adequate cash flow to support additional advances should be free to obtain them.
Though I did not ask the SBFA directly if the practice of stacking is an immediate disqualifier for membership, the organization has long been known to advocate against it. In Year of the Broker, Goldin commented that stacking litigation is underway.
Lawyers at Hudson Cook, LLP echoed the same. “In the last several months, at least two first position companies have sued their stacking competitors, claiming that stacking constitutes tortious interference with contractual relations,” they wrote.
The lawsuits come on the heels of the International Factoring Association (IFA) ban on merchant cash advance companies, citing tortious interference as the main driver.
After meeting with board members from both associations, the decision was made to deny membership to merchant cash advance businesses. This decision was based on numerous complaints and increased scrutiny that could negatively impact the factoring industry. By distancing ourselves from the merchant cash advance industry, we hope to diminish the chance of potential legislation.
-Commercial Factor July/August 2014
With several merchant cash advance companies left high and dry by the IFA, a potential leadership void has been created.
“As every industry evolves and shapes itself, some sort of governance and guidance is always needed,” said Otar. “This guidance is something that NAMAA holds itself responsible for,” he argued.
“The question is, can they reestablish themselves as a powerful voice that demands respect?” asked an industry veteran on the condition of anonymity.
Goldin assured me that the updated version of the organization’s best practices guide will be a public document.
Industry brokers like Otar are eager to comply with an established code of conduct and play any role they can in its creation. “Most of the business driven industry-wide is brought in through various ISO channels, which are the ones responsible in presenting the product offered by the funders to the end client,” he said.
That enthusiasm may be resonating with the SBFA. Goldin communicated that they are working towards different types of memberships, hinting at the possibility that brokers might one day be extended an invitation to join.
“We are exploring different levels of membership / pricing,” Goldin wrote in an email.
For the right price, they will likely find a lot of eager applicants.
Scott Pearson Is Retiring, But His Influence on Alternative Finance Will Remain
December 9, 2025In the footnotes of virtually every legal brief detailing merchant cash advance history is Richard B. Clark v. AdvanceMe. Filed as a class action in 2008 by a restaurateur in Orange County, California, Clark alleged that the merchant cash advance he received was really a usurious loan. When the case settled in 2011 with AdvanceMe admitting no wrongdoing and agreeing to make changes, industry observers were quick to recognize that the outcome paved the way for how to operate an MCA business—then a nascent concept—in a reliably compliant manner. The case even became a front-page story for The Green Sheet, a top trade publication for the payments industry, with the headline A New Chapter Opens for Merchant Cash Advance.
“In the class action’s aftermath, many alternative funding providers indelibly reshaped the way they do business,” the story began. “And the ripple effect has spawned a new wave of innovation in this sector with seemingly unlimited possibilities and merchants as the designated beneficiaries.”
speaks at deBanked CONNECT San Diego in 2023
The case also brought further notability to Scott Pearson, the attorney representing AdvanceMe for Stroock & Stroock & Lavan LLP at the time.
“I think a lot of people thought that after the case was resolved, it demonstrated that the product was viable,” Pearson recently told deBanked, “and a lot of other companies came into that space.”
Pearson had already established himself in this area of law after defending a class action brought by Bistro Executive in 2004 against Rewards Network over similar allegations, which also resulted in a settlement and no admission of wrongdoing. The outcomes of both offered guidance on how to clear up language that might otherwise appear ambiguous in an MCA agreement, such as how to establish that the transactions are not absolutely repayable.
“Now you see that language everywhere. Every agreement has that same language in it, pretty much saying that, essentially, if you go out of business or if you file for bankruptcy, nothing’s owed because you’re buying a slice of the future revenue stream with an MCA,” Pearson said.
Pearson has worked on well over a hundred class actions over the course of a legal career that has spanned more than thirty years, but those two cases are especially remembered in the small business finance industry and have led to many new client relationships. In some ways that was just the beginning. Today, he’s a Partner at Manatt, Phelps & Phillips, a firm with 450 attorneys and consultants that was founded 60 years ago in Van Nuys, California. Pearson has been very active on matters of compliance and regulatory enforcement over the last few years at Manatt where he leads the Consumer Financial Services group. At the end of December 2025, however, he’s hanging up the briefcase and retiring. His impact will be missed. As a regular on the conference speaker circuit and still one of the most highly sought-after attorneys in the space, his influence has been very beneficial to those around him.
Steve Denis, Executive Director of the Small Business Finance Association, said, “Scott has been an invaluable asset to the industry, a lawyer whose insight, integrity, and foresight have helped shape how we all navigate an evolving regulatory landscape. His steady and unmatched expertise have guided countless companies, and his support for the Association and for me personally has been nothing short of extraordinary.”
Lindsey Rohan, President of the Alternative Finance Bar Association, said, “Scott has been a leader in the legal community within this industry for many years. His willingness to take a leading role in establishing best practices has had a significant impact on alternative financing, and we are all better off as a result.”
How Pearson got to where he is today was a combination of hard work and the opportunity to work in an evolving area of law.
“I grew up in Arizona. I went to school in Southern California, and I think being a lawyer was something that was pretty natural for me,” Pearson said. “I was on the debate team in high school and college, for example, and I really wanted to be a trial lawyer.”
He noted that he did not really become a trial lawyer per se, but rather more of a litigator, since the vast majority of his cases were resolved before trial. Fortunately, he did get the opportunity to cut his teeth in a real battle.
“I did a six-week jury trial in New Hampshire in a trade secrets case that was all about electronic evidence and the destruction of electronic evidence, and that case was really a big thing for my career. Probably a lot of my fondest memories are from that case,” he said. “I think just being in a long trial like that is being in combat—not that I’ve been in combat—but it’s kind of like where you just build these bonds with the people on the trial team that will just be there forever.”
In the beginning of his legal career, Pearson worked under two top lawyers, one of whom handled a lot of smaller cases for banks. That provided valuable experience in financial services. He also worked on class actions for a long time until the landscape for those eventually shifted.
“I think when the Supreme Court decided that class action waivers were enforceable, that really had an impact on the amount of class action litigation out there, so that’s when I started doing a lot more enforcement work,” Pearson said.
Compliance work organically followed since he had an established reputation in the subject matter. Being in his shoes has taken tremendous effort, however, one that required six or seven days a week of his time throughout his career. When he was younger, he and his colleagues joked about looking forward to the weekends because it meant they could wear casual clothes to the office. The stereotype about lawyers working obscene hours is all too real.
“We would pull multiple all-nighters, like literally be up for two or three days in a row cranking things out,” Pearson recalled. “And maybe sleep on the floor of the office for an hour.”
The “thrill of battle,” as he termed it, made it easier to tolerate, but he also enjoyed working with people he admired, respected, and learned from. And he didn’t just defend, he also played offense, most notably by playing forward for multiple ice hockey teams in whatever downtime he managed to muster up.
Pearson recounts, “We had a bunch of guys from my law school class studying for the bar exam together, and what we did was we would go to a review course in the morning, then we’d go to the library and do all our homework, and then we went and played roller hockey in this pond in Santa Monica that had this big fountain that had been drained and the edges of the fountain could be like boards.”
One of his friends, who hailed from Minnesota, said he had to take his roller game to the ice, a challenge Pearson accepted and stuck with.
“I used to get up at like five in the morning and go take private lessons learning how to skate a lot better and how to play before I went to work, before I had kids,” Pearson recalled. After a private coach and several clinics later, he’s made the game a lifelong hobby, one among others such as fishing, golfing, and cooking. He still plays in an ice hockey league in the present day.
Despite his departure, Manatt will remain a powerhouse in the financial services space. The firm added the highly regarded Gianna Ravenscroft as a partner this past October. Pearson also noted many distinguished individuals at the firm, including Partners Charles Washburn, Bryan Schneider, and Andrew Morrison, just to name a few, as well as strong surrounding team players including an associate named Eric Knight.
Manatt describes itself as a “multidisciplinary, integrated national professional services firm known for quality and an extraordinary commitment to clients.” Pearson became a partner there in 2019 following partner titles at Ballard Spahr, Seyfarth Shaw, and Stroock & Stroock & Lavan, where he began and spent most of his career starting in 1994.
Manatt’s site says that “while most of [Pearson’s] clients are banks, fintechs, and other financial services companies (including institutional investors), he also does a substantial amount of work in real estate, sports and entertainment, retail, and other industries,” and that he’s “been repeatedly recognized as one of the top consumer finance lawyers in the United States, with clients in anonymous interviews praising his responsiveness and legal acumen.”
“Scott’s contributions to the alternative finance industry have been invaluable,” said Christopher Murray, Managing Member at Murray Legal, who also practices in the small business finance industry and is familiar with his work. “His knowledge of regulatory compliance and litigation is unmatched. It has been a true privilege to work with him and a pleasure to work alongside him. His retirement is a loss for the commercial finance space, but well earned.”
On matters of compliance, Pearson explained to deBanked that even a small startup financial services company should take some basic steps toward compliance—things like carefully drafting agreements and providing proper training for senior management. And as a company gets bigger, it requires a continuous and larger investment into compliance—real compliance. Some founders and executives, for example, can overestimate their preparedness and require professional help to get where they need to be. He’s seen that before. If there’s anything he hopes people take to heart in his coming absence, however, it’s this: remember that your customers are people too.
“When you think about someone on the other side of the phone, think about it being your grandmother or somebody who is maybe a little vulnerable,” Pearson advised. “I think that if you treat people well and if you’re nice to people, I think that ends up really benefiting your business. And I think the more companies that really commit to that, the better off they’ll be because compliance really flows from that basic concept of ‘do the right thing for people.'”
B2B Finance Expo 2025 Recap
November 12, 2025B2B Finance Expo 2025 was a tremendous success! This conference featured a larger number of attendees, exhibitors, and speakers from across the spectrum of commercial finance and small business lending than the previous inaugural year.
B2B FINANCE EXPO 2025 PHOTOS HERE
VIDEO INTERVIEWS FROM THE RED CARPET HERE
If you want a copy of your interview video file, email events@debanked.com.
To learn more about the Small Business Finance Association, contact Stephen Denis or visit: https://sbfassociation.org
A special shout out to the Diamond and Platinum Sponsors: Rapid Finance, Kapitus, Bitty, and Ocrolus.
Also a shout out to Nexi (WiFi Sponsor), AMA Recovery Group (Breakfast Sponsor), Shoreham Bank (Lanyard Sponsor), and Vox Funding (Key Card Sponsor).
How Kaaj is Accelerating Small Business Lending
October 8, 2025Utsav Shah first met Kristen Castell at deBanked CONNECT MIAMI this past February. At the time, Shah and his partner Shivi Sharma were freshly promoting a new AI technology to simplify small business lending. It’s called Kaaj, described as a core intelligence layer that bolts into a lender or broker’s CRM and handles all of the early-stage application intake and underwriting work. Shah had been familiar with the fintech accelerator Castell directs, the Center for Advancing Financial Equity (CAFE), which she was speaking about at the conference, but he had never actually met her in person until then.
“That’s really when we learned deeply about what CAFE’s mission is and how it works with a lot of startups, a very unique mission and very unique approach to work with startups and bring the ecosystem together,” said Sharma. “So we loved it and decided to apply this Fall.”
They applied into the exclusive accelerator program and were one of six companies to be selected, an honor considering hundreds of companies apply for entry on a bi-annual basis. As previously noted on deBanked, it’s an eight-week program, some of which takes place on location at the Fintech Innovation Hub on the University of Delaware campus. The rest is virtual but there are in-person field trips like a recent one to Washington DC, for example. deBanked has sponsored the last three accelerator cohorts which in the most recent cohort includes headline names like JPMorgan, PNC, Discover, Barclays, Capital One, M&T Bank, WSFS BANK, BNY Mellon, Prudential, Fulton Bank, County Bank, Best Egg, United Way, NeighborGood Partners, and the Delaware Bankers Association.
Kaaj, based in San Francisco, was already getting noticed beforehand. The company won the Fintech Meetup Startup Pitch Competition in March and secured a $50,000 prize, for example. Their technology is especially suited for equipment financing companies, MCA providers, small business lenders, SBA lenders, factors, and more.
“So imagine that you’re a lender, and you get hundreds of applications in a day, and you don’t really know where you want to focus your time on,” Shah said to deBanked. “‘What do these 100 deals mean for me, for my business? Are they even qualifying against my criteria, etc.’ So what Kaaj does, it provides very quick intelligence, within the first three minutes.”
Shah explained that as soon as someone submits a package with documents, they get analyzed from top to bottom, like KYC/KYB, the bank statements, and more. This helps lenders (and brokers) decide how to prioritize their time. Utsav’s background in technology has played a major role in building this out as he comes with a decade of AI experience and was building autonomous cars before building Kaaj.
“Time wins deals or time kills deals,” said Shah. “Either way that you want to look at it, if we can give that time back to them, if we can reduce that turnaround time on each individual deal and focus on those higher profitability deals for these companies or these lenders, then they can start really feeding the top line and the bottom line, because they’re not having to hire a bunch of folks.”
Sharma said that equipment finance is slightly more complex than MCA, for example, but that as a $1.4 trillion industry, it’s a market that’s ripe for innovation. Sharma used to work in commercial lending herself and has seen firsthand how manual processes and outdated technology slow things down and hurt not only the lenders but the borrowers in the process.
“I have worked on small business lending, commercial lending, payments fraud, onboarding fraud, a lot of that,” Sharma said. “I spotted a lot of challenges in that space and a clear lack of good technological solutions that really help these lenders scale efficiently.”
Shah, meanwhile, said that ultimately it’s about helping the end-user, the business borrower.
“We are very focused on solving for small businesses, because the final mission of the company is to get better access to capital for small businesses,” he said.
See Post... small business finance association, supports the legislation as drafted but would prefer a total ban on confessions, said stephen denis, the organization’s executive director. “any company that is counting on cojs as a collection practice, they are just practicing bad underwriting,” he said. “they should be leaving the industry anyway.”, , --with assistance from david ingold and demetrios pogkas., , to contact the reporters on this story: zachary r. mider in new york at zmider1@bloomberg.net;zeke faux in new york at zfaux@bloomberg.net, , to contact the editors responsible for this story: robert friedman at rfriedman5@bloomberg.net, david s. joachim, , 2019 bloomberg l.p.... |
See Post... small business finance association)? , , funny how the sbfa wants to institute best practices for brokers, while they have places like credibly that is potentially stacking other members. , , ma... |
See Post... small business finance association supports these bills. so, if you live off commissions for seconds+ and coj's, smal... |
