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Merchant Cash Advance's Big Day - The David Goldin Story


Small Business Finance Association Releases Best Practices Just in Time

April 13, 2016
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best practices

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
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Stephen Denis Small Business Finance AssociationThe 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, 2015
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WASHINGTON–(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

Small Business Finance Association
Steve Denis, 202-213-9506

North American Merchant Advance Association (NAMAA) Announces New Name – Small Business Finance Association (SBFA)

April 14, 2015
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New 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

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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

Is NAMAA Reborn? Meet the Small Business Finance Association

April 14, 2015
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Almost 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.

Small Business Finance AssociationSBFA 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.

Small Business Finance AssociationThough 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.

Top Industry Execs Attend Small Business Finance Leaders Summit in Washington DC

January 29, 2024
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Capitol BuildingFifty top C-level executives attended the Small Business Finance Leaders Summit in Washington DC last week to discuss the economy, small business finance, policy issues, regulatory impacts, and industry best practices. Co-hosted by two major trade organizations, the Small Business Finance Association (SBFA) and the Innovative Lending Platform Association (ILPA), it was invite-only and open to members of both.

Speakers included US Senator Roger Marshall, Tom Sullivan from the US Chamber of Commerce, Holly Wade from the National Federation of Independent Business, Aaron Klein from Brookings, Will Tumulty from Rapid Finance, Justin Bakes from Forward Financing, Kirk Chartier from OnDeck, and Steve Allocca from Funding Circle, among others.

“As our industry matures, it’s important to provide industry leaders with an opportunity to connect and engage with high-level thought leaders,” said Steve Denis, Executive Director of the SBFA. “We believe our C-level Summit complements the Broker Fair and other industry conferences like Money 20/20 or Nexus. We hope to expand our Summit in June to bring in some new industry voices and will continue to focus on high-end content that is meaningful and strategic for our members and other top industry leaders.”

The organizations are planning another Summit in early June to build upon the success.

Financial Service Associations Urge Legislation on IRS Income Verification

January 25, 2024
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irs buildingThe IRS doesn’t want financial service companies to be able to verify the income of customers, at least not through official channels like the Income Verification Express Services (IVES) system. On January 2 and 3, the IRS announced it would only allow IVES transcripts to be made available “to mortgage lending firms for the sole purpose of obtaining a mortgage on residential or commercial real property (land and buildings).” Government agencies will also not be allowed to use IVES.

“The IRS is implementing the provisions of the Taxpayer First Act (P. Law 116-25) with increased privacy and security requirements for access to confidential tax information,” it announced. “If tax transcript information is required by your firm for other than securing a mortgage, we recommend requesting it directly from the taxpayer.”

But relying on getting the information directly from the taxpayer defeats the whole purpose in more ways than one, many financial service trade associations say. On Wednesday, a letter jointly signed by the American Bankers Association, America’s Credit Unions, American Fintech Council, Consumer Data Industry Association, Electronic Transactions Association, Financial Technology Association, Innovative Lending Platform Association, Independent Community Bankers Association, Mortgage Bankers Association, Responsible Business Lending Coalition, and Small Business Finance Association urged senior ranking members of Congress to pass H.R. 3335. Dubbed the IRS eIVES Modernization and Anti-Fraud Act, it would “ensure the IRS follows the original intent of Congress to modernize the system and prevent disruptions to the consumer and commercial lending industries.”

You can view the letter here.

Back to Business Lending in Canada

November 2, 2023
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canadian lenders summit“There’s a need for products and services like ours across all cycles,” said Cato Pastoll, CEO of Loop, on the small business lending panel held at the Lenders Summit this week in Toronto.

It’s unclear what cycle the industry is in exactly. The Lenders Summit, put on every year by the Canadian Lenders Association, was not only sold out but packed wall to wall with more than 500 attendees. The tone was relatively upbeat despite Canada’s key interest rate holding steady at 5% and economic headwinds blowing in the background.

OnDeck Canada COO Harley Greenspoon said that his company just had their best October in four years and that they’ve returned back to pre-pandemic growth. “Demand is actually not the issue at all,” Greenspoon said.

Not only is the demand for business loans there but OnDeck Canada has not had to pass on the rising costs of capital thanks to greater efficiencies unlocked by reducing headcount and increasing automation.

canadian lenders summitLauren Thompson, VP of Specialty Finance for Peoples Group, whose organization partners with fintechs and lenders, said that from a bird’s-eye view banks would probably continue to restrict capital being loaned to small businesses for the foreseeable future. “I don’t think that small businesses are best served through the traditional banking system,” said Thompson.

Pastoll of Loop pointed out an irony with this, that banks tend to under serve the underserved when they actually need it most. “90% of the private sector workforce is employed by small businesses so if you want to stimulate the economy, we as fintechs can do it faster…” Pastoll said.

canadian lenders summitThompson explained that the traditional financial system can be hamstrung by reviewing data that is already stale such as financial reports that reflect a moment in time six months ago while a fintech lender has more of a live pulse on what’s going on.

Greenspoon of OnDeck Canada, for example, could rattle off the top of his head industries that are experiencing challenges, the most notable being transportation.

Finally, Pastoll was asked if Loop had contemplated ever having to deal with a high interest rate environment back when he founded the company almost nine years ago. Pastoll explained that his whole inspiration for founding Loop in the first place was to help small business owners precisely during difficult times. Both of his parents were small business owners and he had watched firsthand how hard it was to find financing.

“Again, I just think about what my parents had to go through,” he said.

Found on DailyFunder:


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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;zeke faux in new york at, , to contact the editors responsible for this story: robert friedman at, david s. joachim, , 2019 bloomberg l.p....

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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...

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small business finance association supports these bills. so, if you live off commissions for seconds+ and coj's, smal...