Articles by deBanked Staff
Seven Percent of Small Businesses Use MCAs on a Regular Basis
May 15, 2026According to the latest Small Business Credit Survey taken by the Federal Reserve, 7% of businesses with less than 500 employees use merchant cash advances on a regular basis. This was up from 6% the previous year.
For businesses that applied for financing, 12% applied for an MCA, up from 9% the previous year. Forty-eight percent of those applicants said that they got fully approved for one and 12% said they were declined. This contrasts with last year’s figures of 33% and 9% respectively. These charts are compared below while the full 2026 survey report can be viewed here.
It should be noted that the 2026 data reflects a survey conducted from September 2025 – November 2025 for that trailing 12 month period and the 2025 data reflects a survey conducted September 2024 – November 2024.
Square’s Q1 Gross Profit Growth Driven by Square Loans
May 12, 2026Block didn’t divulge the precise number of business loans it originated in Q1 2026 but did say that it grew. deBanked, which tracks online small business lender originations, estimates the number to be ~$1.9B.
“Square gross profit grew 9% year over year in the first quarter, driven primarily by Financial Solutions, most notably Square Loans,” the company said.
Lending has become a significant business for the company across all of its verticals. Consumer lending origination volume growth accelerated to 82% YoY, for example. Its “Borrow” product grew by 300% over that time period.
“Each new Block lending product has scaled originations at a faster rate than the last one,” the company revealed in its earnings presentation. A snapshot from that presentation is below:
LendingTree: SMB Lending Cools Slightly
May 7, 2026“When the war started in March and gas prices went way up, that was a shock to the system in that month specifically,” said LendingTree CEO Scott Peyree. “Now, on the small business lending side, I would say we are seeing a little bit of both—fewer small merchants looking for loans and smaller loan sizes than normal. On the lender side, credit is still available, but they are typically offering lower loan amounts at higher interest rates.”
Peyree believes this will correct on its own.
“When you have a cautious merchant to begin with, and then they are not getting the exact loan they want and at a higher interest rate, the sense we are getting is they are just not as urgently looking for money right now because of macro geopolitical stuff that is going on,” Peyree said. “I still think this is a short-term thing that will go away. Once consumer sentiment comes back up and, hopefully, things settle down geopolitically, I think we will be right back off to the races.”
Revenue from the small business segment of its business, however, was still up 49% YoY and they’ve brought on more people to help these businesses choose a solution.
“We have selectively added to our SMB concierge team to help more customers find the right financing options, while increasing the speed of application submission, approval, and funding,” the Q1 shareholder letter states.
NerdWallet CEO: ‘Distribution is King’
May 7, 2026During NerdWallet’s Q1 earnings call, CEO Tim Chen took a question about the company’s vertical integration strategy.
“High level, the cost of launching financial products is decreasing rapidly, as everything from software to call centers to capital markets is getting more efficient,” Chen said. “Meanwhile, the cost of distribution is going up. That means now more than ever, distribution is king.”
With this in mind, the company is going hard on distribution.
“…we have decided to be more aggressive in placing our long-term bets,” Chen said. “We believe our brand and distribution moats represent a growing advantage as less powerful brands struggle to reach consumers efficiently, while AI simultaneously reduces the cost of offering financial products.”
Chen also said that it’s getting harder for single-product companies to continue competing.
“While this environment is increasingly challenging for newer entrants and single-product companies, our trusted brand leaves us in a strong position to capitalize on our massive consumer reach and distribution network.”
NerdWallet offers both consumer and smb products.
“SMB revenue was 25 million, down 15% year over year, driven primarily by organic search revenue declines in SMB products, partially offset by revenue growth in loan originations,” said John Lee, NerdWallet’s CFO of the first quarter. This downward trend as a result of the changing organic search environment has been a recurring theme for the last few quarters.
New York State Bill Seeks to Criminalize Invoice Factoring, Merchant Cash Advances, and More
May 6, 2026A Senate Bill in New York hopes to rewrite the state’s criminal usury laws to include invoice financing, revenue-based financing, merchant cash advances, retail installment contracts, “or any transaction that in substance functions as the advance of funds in exchange for a future payment or obligation, regardless of the label assigned to such transaction.” S10127, introduced by Senator Rachel May (D), says that the purpose is to ensure “that businesses cannot evade New York’s longstanding usury laws by re-labeling high-cost financing products as services or other non-loan transactions, and to apply existing civil and criminal interest rate protections to covered financing arrangements.”
Any product that falls under these definitions would be deemed criminal if its all-in cost exceeds 25% per annum or the equivalent rate for a longer or shorter period. Depending on the circumstances it would either be considered a Class E felony punishable up to 4 years in prison or a Class C felony punishable up to 15 years in prison.
The bill has merely been introduced and has not yet made its rounds through the legislature. It can be viewed here.
Equipment Finance Lender Solicited Syndication into Fake Deals for 30 Years
May 6, 2026A criminal complaint charging Western-New York-based Woodhill Capital Corp CEO Richard Teplitsky with running a ponzi scheme since 2018 is even more sinister than it looks. That’s because during an interview with the FBI, Teplitsky revealed that he has been offering investment opportunities into fake equipment finance deals for thirty years.
“Teplitsky stated that at some point in time, probably around the mid-1990s, Woodhill did not have enough money coming in from borrowers to make the payments that were due to Woodhill’s investors,” the criminal complaint says. “At that point, Teplitsky started to create fictitious loan documents fraudulently representing to investors that their money was being used to fund loans. In fact, many of the funds being provided by investors were not being used to fund loans to borrowers, but instead were being used to pay the amounts owed to previous investors.”
Despite high interest rates, Teplitsky allegedly said that the risky nature of the deals resulted in a default rate of nearly 50%. He paid the investors anyway.
The scheme snowballed over time with most of the deals over the last ten years being completely fake. As of March 2026 Teplitsky estimated there were 170 – 190 investors that were owed tens of millions of dollars with only 5-10% being a result of real deals. The full complaint can be viewed here.
Broker Fair 2026 Room Block is FULL
May 5, 2026Hotel rooms for Broker Fair 2026 taking place on June 1 in New York City have SOLD OUT. But don’t worry, there’s still tickets left to the event itself! You can register for it right here!
Shopify Capital: $1.4B in Business Loans and MCAs in Q1
May 5, 2026
Shopify’s business loan and merchant cash advance offerings continue to increase. This follows a consistent decade-long rise with no down years. In Q1, the company originated $1.4 billion in business loans and merchant cash advances, up from $821 million YoY. Based on the weight of the respective receivables, the product mix is roughly 82% loan-based and 18% MCA.
Of the loans it originated in 2025 that still have an outstanding balance, 10.8% were more than 6 months behind on their original payment schedule as of March 31, 2026.
Delinquency chart in in the Q1 docs:
