Anaya Vance is a reporter for deBanked. 
Filling The Funding Gap for Canadian Borrowers
March 5, 2023
“Generally, capital availability is usually stronger in the U.S., but I would say Canadian businesses are definitely less serviced when it comes to options to be able to access capital,” said Cato Pastoll, Founder and CEO at Loop. “There’s just kind of less services or less products out there for companies so that definitely means that there’s going to be more demand for loan related products.”
One of the lingering challenges in Canada is that the big banks tend to hoard the data that would be valuable to fintechs to service more borrowers, hence the recurring call for open banking.
“If you’re a fintech and you don’t have access to that information, you have to figure out a way to access it from the banks that do hold it,” said Tal Schwartz, Senior Product Manager at Nomis Solutions and Writer at Canadian Fintech. What’s happened as a result is that a whole cottage industry has formed to figure out ways to relay data without APIs.
Cato Pastoll’s company, Loop, is among those that have come up with clever solutions to service Canadian customers. For example, Loop can help Canadian-based companies obtain loans in U.S. dollars to help them grow while also offering other services like expense management tools and cross-border payments.
“A lot of businesses have a hard time getting financing from the bank,” Pastoll Said, “so there’s definitely a few players that do provide different products to help companies be able to access growth capital, working capital, and many of them have been around as long as we have for the last five to ten years or so.”
“So, things that can probably improve in Canada are all related to competition, law, and kind of creating a more equal playing ground between banks and fintechs,” said Schwartz. Although those initiatives seem to be trending in the right direction, it’s been a very a slow march forward.
Give Him a Try. “He’s a Good Guy”
February 23, 2023
He may be a good guy, but does he pay his loans on time? The infamous, he’s a good guy line circulates in this business daily. Citing what an admirable individual they are should require a bit more verification than that. And trusting a reliable source in the industry may not always unfold the way it’s supposed to. Therefore, is pushing for a merchant, company, or any party based solely on personal traits enough to create a depiction of who they are?
“This phrase is interesting in that it often serves as a shortcut for assessing the character of a person or company in the industry, and its prevalence is understandable given the amount of trust that is necessary for successful financial transactions,” said Tony Borchello, General Manager at Finance It Forward. “At the same time, this phrase should not be taken as a full assessment of someone’s character or a complete substitute for due diligence. While it can be helpful in certain contexts, relying too heavily on this phrase can lead to bad investments or other costly mistakes.”
Ultimately this phrase is not meant to be negative, but one’s relationship with a person or company may not replicate the experience for someone else. Finding great partners in the industry plays a role in this too. Without building credible connections to be used for future references, it can be difficult to take anybody’s word.
“You always have people on the outside that are looking out for each other in this industry, which is great, don’t get me wrong,” said Amanda Kingsley, Director of Marketing and Development at Merchant Marketplace. “But everybody is so quick to just use that one phrase to make it seem like ‘Oh he’s a good guy,’ okay I’ll trust you. I’ll do it because you said that.”
Key words are useful to look out for as well when relying on a reference. For example, “promise” may not have the impact intended, Kingsley described. If someone is promising to pay back a loan on behalf of another person, it could actually heighten the risk of it falling through.
“As soon as you hear the word promise, you know that they’re going to break a promise,” said Kingsley.
A person’s credibility in the business should not justify an automatic approval all on its own. While referrals are an obvious and necessary part of the business, doing a thorough examination on the backend is key.
“It’s important to remember that ‘He’s a good guy’ should not be the only factor that’s considered when making a financial decision,” said Borchello. “Instead, this phrase should be used in conjunction with other sources of information such as research, reviews, and interviews, in order to get a more complete picture.”
Lendica Integrates with Shopify and Salesforce
February 7, 2023
Shopify and Salesforce users will now be able to access loan products through Lendica. Now, how does it work? Lendica gives their software to Independent Software Vendors (ISVs) and once installed, their customers will have access to Lendica’s funding products (PayLater, FundNow, and DrawDown).
PayLater is similar to how BNPL works, allowing vendors to delay their payments to a weekly basis. FundNow resembles an accounts receivable product where merchants can get paid up to 90 days ahead of the seller terms offered from their wholesale account. DrawDown is working capital that allows businesses to borrow against their future cash flow. These three products can be integrated into Shopify and Salesforce with an embedded funding or pay later button.
“We’re giving this tool to these ISVs so that their customers can instantly access our product and then learn about our other funding tools,” said Jared Shulman, CEO at Lendica.
“The most important piece, and this is kind of the excitement of Salesforce and Shopify is that what Lendica was doing is building this missing infrastructure in the small business lending space…,” said Shulman. “And what that is, is this standardized lending language, we call it the Lendica token that allows any financial institution to get a complete picture of a business, and then a point of reference on what that picture means.”
Lendica has experienced strong adoption of its products. According to Shulman, its PayLater product alone has garnered more than 10% growth month over month.
Bitty Bets Big
February 1, 2023
“It’s a new product, it’s a new pricing structure, for deals that are $20,000 up to $125,000,” said Daniel Dames, VP of Operations at Bitty Advance.
Bitty Advance formally announced at deBanked Connect Miami that they will now be taking on bigger deals up to $125,000. They had started doing a few big deals back in November with select partners but now their new product, known as “Big Bitty,” is in full effect. Historically, the company had focused on microfunding, now known as “Core Bitty,” which they will still continue to do.
Better rates, longer terms, and lower fees is the new approach Bitty is taking with increased funding, according to Dames, and it calls for a bit more diligence on the underwriting and funding side. A merchant interview is required with Big Bitty as opposed to the strictly automated process enjoyed with Core Bitty, for example.
“This is Bitty, this is just a new product,” said Dames. “You submit the same way, you do everything the same way that you’re used to, really the difference is they see the numbers, they see the larger amount, they see the lower fees, they see the better rates, and they see the longer terms.”
Big Bitty isn’t just about doing bigger deals for the sake of doing bigger deals. Dames explained that they witnessed the challenges brokers face when having to send deals to multiple places and they recognized the value of being a one-stop shop for them.
deBanked CONNECT MIAMI Shines
January 26, 2023
The sun wasn’t the only thing shining in the beautiful city of Miami on January 19th. Attendees were beaming with energy to forge connections at deBanked CONNECT. The annual half day event took place at the Miami Beach Convention Center. The venue offered a nice mix of educational speaking content and networking opportunities.
Among the panels of the day were Preparing for 2023 and a Possible Recession, moderated by Sarah Kelly with panelists Jim Granat, Dylan Howell, and Patrick Ontal and Let’s Talk Big Deals moderated by Daniel Dames, with panelists Jason Solomon, Jay Keller, and Patrick Manning. Advice, conversation, and different perspectives were shared about what can be done to elevate one’s business in the current environment.
Ocrolus’ David Snitkof and Sam Bobley presented a tech demo followed by Kuboon’s Brysen Patridge and Dalton Franklin where a lucky winner went home with a brand new iPad. Steve Denis alongside Jesse Carlson spoke on the latest news on the state of the business and policy issues.
Broker Fair is just four months away and will be at the New York Hilton Midtown, Monday May 8th. Tickets have easily sold out the past couple of events so try not to wait until the last minute!
What’s To Come in 2023? The Industry Shares Their Predictions
January 11, 2023
It’s halfway into the first month of the new year and the expectations for 2023 are buzzing. Fintech and alternative finance executives have different views on what’s to come. Here’s what they had to say:
Nick Chandi (CEO & CO-Founder at Forward AI): “Adopting real-time payments (RTPs) will be critical in 2023 as SMBs continue to grow. RTP transactions are set to grow 300% globally over the next five years, potentially becoming the new standard for banks, FinTech’s, and businesses to move money. The implementation of real-time payments allows SMBs to manage their cash flow better, settle transactions in real-time, hold cash for longer, and make due payments instantly.”
Bruno Raschio (President at East Capital): “Predictions include negative growth in the equities markets as earnings estimates lower, the S&P to remain below 4,000 by the end of the year, as well as stagnant growth in real estate prices. Even a 10-20% in price reductions in real estate prices as interest rates continue to rise, closing in on 30-year highs.”
Gregg Templeton (Founder at TRAM Funding): “I predict that embedded finance will really take root this year. Both B2B and B2C will be looking for ways to embed banking and financial services directly into their user experience.”
Tyson Rose (Head of Partnerships at BlockApps): “My top three predictions for the financial world as we enter 2023 are as follows. Lenders will outsource more of their business processes and adopt new technologies to drive down costs wherever possible. Smaller lenders will enter the direct ABL and factoring market. Banks and FIs will focus on building fintech solutions to take greater market share in the transportation and supply chain financing industries.”
Sharmylla Siew (Senior Underwriter at Lending Valley): “We predict a number of funders to tighten up their guidelines during the recession and the continuous spread of the regulations state by state with less funding being outputted by hybrid funders.”
Alicia Josshua (ERC Specialist & Field Underwriter at Symmetry Financial Group): “Small businesses are leaning more towards alternative financing because of the flexibility. This financing niche allows for quick turnarounds in approvals and fundings within a week. Big banks have scaled back on lending such as lines of credit [and there’s a] longer approval process such as 4-8 weeks. The alternative financing space is not being affected and makes a great outlook for businesses.”
Andy Parker (CEO at The LCF Group): “2023 will be a challenging year for both small businesses and funders. Increasing borrowing costs, increased compliance and regulatory costs, and more frequent defaults for funders will lead to more expensive funding and tougher qualifications for small business borrowers.”
Who’s Got Swag?
January 10, 2023
There’s a rush of excitement at Broker Fair and deBanked Connect. Behind the scenes there is also a fun creative process that sponsors get to prepare for right before every event. SWAG! It can be challenging to think of anything other than pens and Post-its to jazz up one’s table with memorable tchotchkes so here is some unforgettable swag from over the years:
Broker Fair 2019 in the Roosevelt Hotel, as some might recall, had a live basketball hoop by Rapid Finance. LoanMe brought out squeezable stress relievers and what better way to relieve it than squeezing a money wad. Silver sponsor Cooper Asset had special bags that came in handy when collecting all that swag.
At deBanked Connect San Diego 2019, PIRS Capital gave out mouse pads, great for guests to use at work with a constant reminder of where they got it from. Bitty Advance had reusable water containers, smart to stay hydrated while bouncing from sessions to the sponsor showcase room. BFS Capital had a bowl of candy on their table and who doesn’t love a sweet treat after endless meet and greets.
At deBanked Connect Miami 2019, SOS Capital was looking out for everyone by having a bowl of mints out for grab. And if one can’t calculate large numbers without a calculator handy, RTR Recovery had guests covered with that.
After having a virtual Broker Fair in 2020, Lendini stepped it up a notch with a hand-rolled cigar station at the pre-show party in 2021. If one didn’t have a pen and notepad to take down information, Velocity Capital Group made sure to have plenty available. Velocity also had a mini massage station to loosen everyone up after a tense year in quarantine.
Although Covid took some time away from events, the deBanked Connect Miami 2022 sponsors were more ready than ever to show off their swag. FundFi played it safe with hand sanitizers and the LCF Group knew everyone would need a ChapStick throughout the event after talking all day. FinTap got creative with their very own Staples easy-button that said ‘funded.’ Legend Funding had mini piggy banks, ROC Funding Group had cigar cutters, and Lendini had flasks and raffled off a Gucci duffle bag.
Broker Fair 2022 swag was a blend of the practical with the innovative. THOR Capital had shot glasses and if one needed a coaster for that Lifetime Funding had your back. Now that everyone has moved on to wireless headphones, Dedicated Financial GBC brought back wired headphones, which are perfect for flying. Beyonce said it best, “I got hot sauce in my bag swag,” and everyone could too because IOU Financial had mini hot sauce bottles. Following the tradition of raffling their most-wanted Gucci duffle, Lendini also had mini tool kits and Magic 8 Balls that fortuned all good news surrounding the event.
At deBanked events, sponsors always come through with original swag ideas. With Miami 2023 right around the corner, we are excited to see what will be there this year.
Financing Fertility
January 6, 2023
Ever heard of financing in vitro fertilization? LendingPoint offers financing opportunities for IVF to help women trying to get pregnant. On average IVF can cost anywhere from $15,000 to $30,000. That’s not cheap. LendingPoint is widely known in the consumer lending space but the range of why borrowers are looking for financing is wide.
“We have some really impactful financing opportunities where we’re financing IVF programs for women to get pregnant, which is probably some of the most lovely stories that we get to hear and an impact that we get to do on someone’s life,” said Amanda Flashner, Chief Experience Officer at LendingPoint.
Different treatments have different price points and different needs. LendingPoint partners with many merchants so that they can offer their own customers what they need at the point of sale. Other types include medical, dental, and home improvement businesses, for example.
Flashner was recently appointed Chief Experience Officer (CXO) which is a new executive position for the company altogether. Advocating on behalf of their customers, she is responsible for their beginning-to-end experience, making sure it’s personalized to the customer centricity that they’re building.
“It’s a really exciting time. I like to say our customers have always been the heart of our company and they are, and our CEO (Tom Burnside) has been an incredible advocate for the customer experience practice that I helped build here from the ground up at LendingPoint, but now our customers really have a seat at that table, helping make big decisions on their behalf, so that’s really exciting.”
CXO is not commonly heard of like CFO or COO but Flashner said she does see this role becoming more important in an executive committee of other companies.
