Articles by deBanked Staff
Texas Governor Signs Sales-Based Financing ACH Prohibition Into Law
June 21, 2025
Texas Governor Greg Abbott has signed HB 700 which prohibits a sales-based financing provider from automatically debiting any merchant in the state unless they are in a perfected 1st position. And not just a 1st position MCA, a 1st position above anything else at all. It doesn’t matter if the funder doing the debiting is located out of state, only that the merchant be located in Texas.
The law broadly encompasses purchase transactions (MCAs) or loans where the payments ebb and flow with sales activity (revenue-based finance loans). Companies with a special bank relationship are exempt from the law. The exemption applies to: “a bank, out-of-state bank, bank holding company, credit union, federal credit union, out-of-state credit union, or any subsidiary or affiliate of those financial institutions.”
The specific language detailing the prohibition is:
CERTAIN AUTOMATIC DEBITS PROHIBITED.
A provider or commercial sales-based financing broker may not establish a mechanism for automatically debiting a recipient’s deposit account unless the provider or broker holds a validly perfected security interest in the recipient’s account under Chapter 9, Business & Commerce Code, with a first priority against the claims of all other persons.
The full law goes even further than the ACH ban, the extent of which can be viewed here. The law goes into effect on September 1, 2025.
P2P Lending / Former ‘LendAcademy Forum’ Has Moved Again
June 19, 2025deBanked has migrated the old LendAcademy p2p lending forum it acquired in 2021 to DailyFunder. Due to software compatibility issues, it was frequently offline on deBanked’s servers. It has now been moved to DailyFunder whose software was able to integrate the content somewhat successfully.
The LendAcademy forum, launched in 2011, was the most popular p2p lending forum in the US. An unfortunate incident, however, caused the data to be permanently lost in 2021. When that happened, deBanked used proprietary forensic techniques to restore as much of it as possible in a takeover deal it inked with the former operators.
DailyFunder, launched in 2012, is the oldest and most popular small business finance forum in the US. Any issues relating to it going further should be referred to DailyFunder at webmaster@dailyfunder.com.
CFPB Small Business Lending Rule Compliance Delayed a Year
June 17, 2025
The CFPB has officially hit the pause button on complying with the small business lending data collection rules. They were supposed to go into effect next month. The Agency, however, announced in April that it planned to rewrite all of the rules and would not enforce them in the interim. Alas, covered parties wondered if they were still required to comply regardless of the whims on enforcement. Consequently, a new deadline for compliance was set for July 1, 2026. That assumes the new rules are ready by then or that there are no further delays.
The rules have technically been delayed by fifteen years already since the law requiring such rules to be implemented was passed in 2010 (Dodd-Frank). Other priorities, politics, debates over the legislation’s scope, and endless litigation relating to it pushed back rule-making and compliance to where it is now. During Trump’s first term, there was even disagreement as to what the CFPB should even be called. deBanked has been covering the law for more than 10 years.
The law had previously been deemed applicable to both loans and merchant cash advances. The rules had been codified in 888 pages of guidelines.
Lightspeed: Potential to do up to $1B in Merchant Cash Advances
June 15, 2025Lightspeed may have only done $45 million in MCAs in FY 2025 but the point-of-sale company is continuing to grow that particular lucrative segment of its business conservatively, and possibly far below its full potential.
“There is a lot of opportunity. We can move faster if we wanted to,” said Lightspeed CFO Asha Bakshani during the company’s most recent earnings call. “When we look at our peers, for example, they are giving out 1% of their [Gross Transaction Volume] in merchant cash advance. Lightspeed is well below that. 1% of our GTV would be almost $1 billion in merchant cash advance. So when we think about the opportunity, it’s there. It’s just that in this macro, we want to move carefully on a product like Capital. Like I mentioned earlier, our default rates are in the very low single digits, and we want to keep it there.”
Lightspeed estimates its MCA program will grow by 30% in FY 2026. Part of the reason the company has grown its MCA business so conservatively is that it funds 100% of them on balance sheet.
The company advertises that MCA payments are enabled by either split or ACH.
Take This Industry Fraud Evaluation Survey
June 11, 2025Fraud is a growing challenge in the alternative lending space, particularly for lenders and funders that serve small businesses. As fraud tactics evolve – from synthetic identities and doctored bank statements to first-party fraud and account takeovers – funders and lenders face heightened risks that can lead to increased defaults, operational losses, and stricter underwriting processes.
MoneyThumb and deBanked have partnered to conduct a survey across lenders, funders, brokers, banks, and the fintech sector to reveal and better understand how fraud is impacting the industry. The goals are to help underscore the problem / shine a spotlight on an increasingly important sector that adversely impacts the industry and provide information on the most common fraud types and the tools strategies lenders are using to mitigate risk.
Your feedback is completely anonymous, and as a thank-you for participating, you’ll receive an exclusive early copy of the full report—plus additional insights not available to the public.
Check out other joint reports deBanked has previously participated in.
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QuickBooks Capital Continues to Grow
June 8, 2025Intuit’s small business loan program, QuickBooks Capital, is continuing to grow. It generated $35M more revenue in FY Q3 2025 than it did over the same period last year, according to the company’s latest earnings report. Considering Intuit’s total quarterly revenue was $7.8B, its funding business, a small percentage of the total in comparison, is only mentioned in detailed on occasion.
QuickBooks Capital benefits from having a funding button in the widely used QuickBooks Capital software, a feature so effective that they were effectively the sixth largest online small business lender that deBanked tracked in 2024. Its two main products are a term loan and a line of credit.
Tell Your Merchants to Act on The Texas Legislation
June 5, 2025Unbeknownst to many small businesses in Texas, revenue-based financing will be severely restricted in the state starting September 1, 2025 if the governor permits HB 700 to be finalized into law. For small businesses who might want to have a say on this matter, the Revenue Based Finance Coalition (RBFC) has provided information for merchants to conduct outreach to the appropriate parties. If you have merchants who want to weigh in before it’s too late, please share this link with them.
Govenor Abbott has between now and June 22nd to veto the legislation. If he signs or elects not to sign the bill by that date, the law will take effect on September 1, 2025.
Online Search is King for How Merchants Shop For Funding, Survey Reveals
June 4, 2025Perhaps the most surprising statistic to come out of a 2025 small business lending survey conducted by IOU Financial is that 12% of merchants said they started their search for business funding options from a cold call. But as one might expect, phone calls are not necessarily the direction in which business is moving. Forty-one percent of respondents, for example, complained that they received too many phone calls from multiple reps.
The number one origin point—far above cold calls (12%), friends/referrals (8%), and social media (7%)—was online search (63%). And they’re not just looking at the first website and firing off a form. Fifty-eight percent, for example, said that online reviews were among the most valuable factors in choosing the right business funding provider, while loan calculators and comparison websites/tools also weighed heavily at 49% and 40%, respectively.
Historically, online search primarily meant Google, but according to a TD Bank survey, 30% of small business owners are already turning to AI assistants like ChatGPT for insights on financial health or financing.
And most merchants skip their bank. “More than 70% of small business owners do not apply for business funding with their bank before exploring non-bank options,” the IOU survey found. “This trend highlights a major shift in trust and preference away from traditional banks and toward alternative lenders—which could be driven largely by the desire for speed, flexibility, and ease of access.”
Carl Brabander, EVP of Strategy for IOU Financial, discussed some of the recent findings of this survey at Broker Fair 2025 this past May in New York City.
