Articles by deBanked Staff

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Georgia on Verge of Passing a Commercial Financing Disclosure Law

March 27, 2023
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Georgia State CapitolGeorgia is on pace to become the next state to pass a commercial financing disclosure law. SB 90 has sailed through both the state’s House and Senate with strong bi-partisan support and is potentially heading for the governor’s desk. The text of the bill is similar to the disclosure law recently enacted in Utah. It also explicitly states that brokers may not make or use any false or misleading representations in the course of its business.

The full text can be viewed here.

“We’re Hiring” But are they really?

March 26, 2023
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ghost jobsWe’ve all encountered folks in the industry that will swear up and down that business has never been better even when everything is falling apart behind the scenes, but apparently businesses in general may go to great lengths to keep up such appearances. One way they do this is by advertising job roles that they won’t actually fill. According to Joe Mercurio, project manager at Clarify Capital, 43% of employers who post ghost jobs aren’t actively trying to fill positions but rather it’s “because they want to keep employees motivated or they want to give off the impression that the company is growing.”

Clarify Capital gleaned this data from a survey it conducted which was then cited in the Wall Street Journal last week. The survey also found that employers have job listings up just to see who might apply, to have an active pool of candidates in case of turnover, or because they simply forget to delete listings for jobs that are no longer available.

According to the WSJ story, titled “Job Listings Abound, but Many Are Fake,” the number of ghost jobs distort hiring demand and applicants across different fields have reportedly found it increasingly difficult to apply for jobs where the employer is actually looking to fill it. The takeaway, perhaps, is that if one is pursuing a new opportunity right now, the presence of job listings may not be enough on its own to indicate which way a company is going. You’ll have to dig a little deeper so that you’re not disappointed.

Libertas Surpasses $2B in Funding Since Inception

March 20, 2023
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Libertas Funding has surpassed $2 billion in originations since the company started over six years ago. Company CEO Randy Saluck shared the milestone on LinkedIn earlier today.

“It took us 5 years to achieve $1 billion in funding but only 18 months to cross the $2 billion mark,” Saluck wrote. “Once again, I am humbled to have contributed to and been a part of this extraordinary achievement. It took incredible communication, drive, and focus by our whole team to achieve this milestone in such a short period of time. Great companies start with a great team, and our people are the best. We owe a lot of gratitude to our customers and referral partners as well as many others who have helped make this possible. The momentum is building in our company as we march toward $3 billion—following our well-deserved happy hour celebration!”

California DFPI Seeks to Dismiss Commercial Financing Disclosure Lawsuit

March 17, 2023
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Clothilde Hewlett, in her official capacity as Commissioner of the California Department of Financial Protection and Innovation, has asked the Court to dismiss the lawsuit over commercial financing disclosures brought by the Small Business Finance Association (SBFA). Both sides have entered in all their arguments (the DPFI filed its reply on March 13th.) It is now up to the Court to decide if the claims survive this stage of litigation.

And Now Florida Has Introduced a Commercial Financing Disclosure Bill

March 16, 2023
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Flag of FloridaFlorida has joined the chorus of states introducing commercial financing disclosure bills. While Florida’s bill looks more like Utah’s than it does California’s or New York’s, it seems to make a point about brokers using potentially deceptive business practices. Brokers take note, especially the last paragraph.

A broker may not:

Assess, collect, or solicit an advance fee from a business to provide services as a broker. However, this subsection does not preclude a broker from soliciting a business to pay for, or preclude a business from paying for, actual services necessary to apply for a commercial financing product, including, but not limited to, a credit check or an appraisal of security, if such payment is made by check or money order payable to a party independent of the broker;

Make or use any false or misleading representation or omit any material fact in the offer or sale of the services of a broker or engage, directly or indirectly, in any act that operates or would operate as fraud or deception upon any person in connection with the offer or sale of the services of a broker, notwithstanding the absence of reliance by the business;

Make or use any false or deceptive representation in its business dealings; or

Offer the services of a broker by making, publishing, disseminating, circulating, or placing before the public within the state an advertisement in a newspaper or other publication or an advertisement in the form of a book, notice, handbill, poster, sign, billboard, bill, circular, pamphlet, letter, photograph, or motion picture or an advertisement circulated by radio, loudspeaker, telephone, television, telegraph, or in any other way, in which the offer or advertisement does not disclose the name, business address, and telephone number of the broker. For purposes of this subsection, the broker shall disclose the actual address and telephone number of the business of the broker in addition to the address and telephone number of any forwarding service that the broker may use.

Both the State Senate and House versions of the bill were introduced by republicans.

Working With Multiple Brokers for a Business Loan? Here’s What to Talk About With Them

March 15, 2023
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Sales professional on phoneIf you decide to engage with multiple brokers at once to try and secure the best possible business loan terms, here are some tips to ensure that happens:

1. Request a clear breakdown of loan terms and fees: You should ask each broker to provide a comprehensive breakdown of the loan terms, including interest rates, repayment schedules, and any associated fees (such as origination fees, late payment fees, or prepayment penalties).

2. Emphasize the importance of transparency: You should stress that you value transparency in the lending process and expect full disclosure of all fees, terms, and conditions. This will help you make a well-informed decision and avoid any hidden costs or unfavorable terms.

3. Ask about their lender network: You should inquire about the range of lenders they work with and their expertise in securing loans for small businesses in you specific industry. This will give you a better understanding of their ability to find the most suitable lender for you needs.

4. Mention that you are considering multiple brokers: By telling each broker that you are speaking with other brokers, you are creating a competitive environment. This may encourage them to offer more favorable loan terms in order to secure you business.

5. Discuss you business strengths: You should highlight you business’s strong points, such as a solid credit history, steady cash flow, or a well-developed business plan. This will help demonstrate to the brokers that you are a low-risk borrower, which could potentially lead to better loan terms.

6. Ask for references or testimonials: You should request references or testimonials from other small business owners who have worked with the broker in the past. This will give you an idea of their level of customer satisfaction and the quality of loan terms they have been able to secure for other clients.

What a Prime Customer Would Expect From a Non-Bank Lender

March 15, 2023
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In the current banking environment, we asked what a prime customer would expect from a non-bank lender should they be forced to go that route:

Customer Experience:

I would expect a seamless, user-friendly online or mobile application process, with responsive customer support via phone, chat, or email. I would appreciate transparency in terms and fees, as well as clear communication about the loan approval process and timeline.

Interest Rates:

Since non-bank lenders typically have less stringent regulations and higher risk tolerance than traditional banks, I would expect the interest rates to be somewhat higher than those offered by prime credit banks. However, I would still look for competitive rates, possibly through comparing multiple non-bank lenders, to ensure I’m getting the best deal possible.

Loan Terms:

I would expect flexible loan terms, such as the ability to choose the loan duration, repayment schedule, and options for early repayment without penalties. Additionally, I would expect clear terms and conditions, including any fees associated with the loan, such as origination fees, late payment fees, or prepayment penalties.

In summary, while I would anticipate higher interest rates and potentially less stringent lending requirements, I would still expect a high level of customer service, transparency, and flexible loan terms from a non-bank lender to make the borrowing experience as positive as possible.

Signature Bank Shuttered By Regulators, Customer Service to Continue Uninterrupted

March 12, 2023
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Signature Bank in NYIf you’ve been following the news, then you’ve heard that Signature Bank was shut down by the New York Department of Financial Services on Sunday. Signature was a popular bank in the small business finance industry. Although it is now under the control of the FDIC, “Depositors and borrowers will continue to have uninterrupted customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before,” the FDIC said. “Signature Bank’s official checks will continue to clear. Loan customers should continue making loan payments as usual.”

The FDIC is now marketing the institution to potential bidders. All depositors will be made whole, thanks to a special exception ordered by the Treasury Department.

Signature Bank relied mainly on commercial customers and enjoyed a famous director, former Congressman Barney Frank, the architect of Dodd-Frank, aka the Wall Street Reform and Consumer Protection Act of 2010.