Articles by deBanked Staff
Commercial Finance Coalition to Host Open House in NYC
December 11, 2018The Commercial Finance Coalition, an industry trade group, is hosting an open house for current and prospective members on December 18 in New York City. It’s at the Park Avenue Tavern from 6pm to 8pm. If you are interested in attending, please contact Mary Donohue at mdonohue@polariswdc.com.
Finitive Appoints Neil Wolfson to Board
December 10, 2018
Finitive announced today that it has appointed Neil Wolfson to its Board of Directors. Wolfson also serves on the Board of Directors at OnDeck.
“Finitive has established an innovative platform to provide institutional investors with direct access to alternative lending investments,” said Wolfson. “Finitive’s platform brings further transparency to this asset class.”
According to an April 2018 deBanked story, Finitive was founded in August 2017 and has two kinds of clients: institutional investors and alternative lending companies. Back in April, the company had only four alternative lender clients. Today, they have eight.
“We are very selective [with our lending clients],” Finitive founder and Executive Chairman told deBanked. “We are not a list service.”
Wolfson spent the last decade as President and Chief Investment Officer of SF Capital Group, a private investment group for high net worth families. There, he invested in over 30 direct debt and equity investments in emerging technology companies with a focus on FinTech companies.
Prior to this, Wolfson spent five years as Chief Investment Officer and President of Wilmington Trust Investment Management, a $40 billion investment management firm, and before that, he was the National Partner in charge of KPMG’s Investment Consulting Practice, representing over $100 billion of assets.
“Neil’s experience investing in global technology companies, coupled with a deep understanding of alternative lending markets, makes him an ideal fit for Finitive’s board,” said Barlow.
Finitive is based in New York and has more than 10 employees.
Small Business Optimism Is Up for 2019
December 7, 2018
American small businesses plan to finish 2018 with a bang, according to the fall 2018 Bank of America Business Advantage Small Business Owner Report. And they’re optimistic about the year ahead.
In the report, based on a semiannual survey of 1,000 small business owners across the country, 80% of entrepreneurs say they are confident that their 2018 year-end revenue will exceed that of 2017. And several business growth indicators are also up year-over-year, such as revenue expectations and expansion and hiring plans.
Projecting into 2019, 57% of business owners believe their revenue will increase (compared to 51% in fall 2017), 67% plan to expand (compared to 59% in fall 2017) and 27% plan to hire, compared to 16% in fall 2017. Significantly, 15% intend to apply for a loan, versus 8% in fall 2017.
Separately, according to the latest quarterly Wells Fargo/Gallup Small Business Index, optimism among small business owners increased substantially over the last quarter. The quarter, according to the index, received a score of 129, which is 11 points higher than last quarter’s score of 118, and apparently the highest in the survey’s 15 year history.
Small business owner survey respondents said positive business financials are largely the cause for their optimism. Eighty percent of respondents rated their financial situation as “very good” or “somewhat good,” while 84% said they expect their financial situation to be “very good” or “somewhat good” in the coming year. A record 55% of business owners reported increases in revenue, with 62% anticipating revenue increases in 2019. In addition, 74% said they had good cash flow in the past 12 months, and 78% said they expect their businesses to have good cash flow over the next year.
Small business owners are not without challenges. Hiring and staff retention issues were among the top concerns for small business owners, according to both reports. According to the Bank of America report, in 2018, turnover affected 24% of all small businesses, with 11% losing 10% or more of their workforce. For business owners who sought to hire new employees, 50% said the tightening labor market had a direct impact on their ability to find and hire qualified candidates. According to the Wells Fargo report, 18% of survey respondents said hiring and retaining staff was their top challenge.
Senate Bill Introduced to Ban Confession of Judgments Nationwide
December 6, 2018
Senators Sherrod Brown and Marco Rubio have called for a nationwide ban on Confessions of Judgment in response to the Bloomberg Businessweek series published last month. The bill, which would amend the Truth in Lending Act, may be named the Small Business Lending Fairness Act.
You can download the bill here
Though Businessweek has been successful in pressuring regulators to conduct inquiries into several merchant cash advance companies and the New York City marshals, authors Zachary Mider and Zeke Faux have remained notably silent on the gaping holes in their narrative. Questions posed to each reporter have yet to receive any responses.
deBanked researched the accuracy of Businessweek’s findings only to determine that two of the purported victim’s stories were not credible. In one case, a business owner that was said to have been “wiped out,” was bragging about his new luxury race car on facebook while public records revealed he was still paying himself six figures a year from the allegedly defunct company that had more than $700,000 running through its bank accounts. In another case, a victim that claimed to be selling off household furniture to buy food after a run-in with a predatory lender, turned out to be a multimillionaire TV station owner.
Signature Bank Partners with trueDigital
December 4, 2018
Today, Signature Bank unveiled a proprietary digital payments platform for its commercial clients, according to a statement released by the bank. The platform, called Signet, is designed to allow Signature Bank’s commercial clients to make real-time payments in U.S. dollars, every hour of the year.
“The ability to transmit funds between approved, fully vetted commercial clients of the bank at all times is very valuable, especially in light of the increasing speed and frequency at which they conduct their business,” said Joseph J. DePaolo, President and Chief Executive Officer at Signature Bank. “Signature Bank has made a commitment to invest in its technology infrastructure, and the Signet Platform is indicative of this investment,”
This commitment by a bank to embrace technology is consistent with other banks of late. Chase and PNC have partnered with OnDeck’s ODX to streamline their online lending processes and other banks have partnered with fintechs recently as well.
“The partnership between trueDigital and Signature Bank will quickly prove to be extremely beneficial and revolutionary for clients globally as they will now be afforded the opportunity to make instantaneous USD payments to one another in real-time at no cost per transaction,” said Sunil Hirani, Founder of trueDigital.
The new Signet platform uses blockchain technology and can be used to make payments across a wide variety of industries, initially focusing on power, shipping, real estate, auto and digital assets where costs, delays, operational risks and counter-party risks are significant, according to a trueDigital statement.
The platform is not designed for a very small company as transactions made on the Signet platform require a minimum account balance of $250,000. Also, the companies exchanging money must both have an account at Signature Bank.
The New York State Department of Financial Services has approved the Signet platform and deposits held on the platform are eligible for FDIC insurance, up to the legal insurable amounts defined by the FDIC.
Signature Bank is a New York-based full-service commercial bank with 30 private client offices throughout the New York metropolitan area. This year, the bank opened a full-service private client banking office in San Francisco. Signature Bank’s specialty finance subsidiary, Signature Financial, LLC, provides equipment finance and leasing. trueDigital is a New York-based fintech company that provides solutions to financial markets by utilizing blockchain-based technologies.
Small Business Forums
November 30, 2018If you’re a business owner with small business questions, we recommend the following helpful sources:
Small Business Forum
This online community is geared towards storefront businesses, is free to join, and is not filled with ads.
Business Advice Forum
This online community is geared towards online businesses, is free to join, and has minimal ads.
If you work in finance, then a great place to connect with your peers would be the deBanked Forums or a deBanked event.
Patriot Bank Expands SBA Lending
November 28, 2018
Connecticut-based Patriot Bank announced today the overall expansion of its small business lending operation. At the beginning of the month, it added to it board of directors Brent Ciurlino, a former SBA official who served as Director of the Office of Credit Risk Management for the SBA. There, he supervised the $105 billion SBA 7(a) and 504 loan debenture and portfolio programs.
“As a banking executive and former federal regulator overseeing small business loan programs, Brent brings substantial expertise and value that will benefit Patriot Bank, its customers and its shareholders,” said Michael Carrazza, chairman and CEO of the bank. “As we build our small-business lending portfolio and look ahead to the goals we have set, Brent’s active involvement will bring a heightened dimension of operational, regulatory and risk management oversight.”
Patriot Bank became an approved SBA lender at the end of 2017, obtained “preferred lender” status with the SBA in September, and is currently opening SBA Business Development offices in the southeast, according to a story on the bank’s website. Additionally, according to the story, the bank signed a definitive purchase agreement in February of this year with Hana Small Business Lending Inc. for its $490 million SBA portfolio. Carrazza said at the time that this would help the bank become one of the country’s leading SBA 7(a) lenders.
Patriot Bank’s Director of SBA Lending Kevin Ferryman, himself a new hire this year, said that the bank’s goal is to enhance its traditional lending programs.
“We’re in a position now where we can approve loans for a lot more customers than we could do with our own internal policies,” he said.
Ferryman also acknowledged that having “preferred lender” status with the SBA allows the bank to process, close and service most SBA-guaranteed loans without prior SBA review.
“As a result, entrepreneurs and small community businesses can obtain their loans more quickly and efficiently,” Ferryman said.
Founded in 1994, Patriot Bank is a consumer and commercial bank with branches in affluent communities in Connecticut and one in Scarsdale, NY.
1st Global Capital Consents With SEC
November 28, 2018Subject to approval in two courts, 1 Global Capital LLC (aka 1st Global Capital) has confirmed it will consent with the SEC to be permanently enjoined and restrained from violating securities laws. The papers were submitted to the Court yesterday.
Though the terms include 1st Global Capital’s California counterpart, 1 West Capital, LLC, there is no connection to the separate securities charges pending against company founder and former CEO Carl Ruderman. Ruderman is seeking to dismiss those charges. According to court records, his reply to the SEC’s opposition is due this Friday.
