Articles by deBanked Staff
Revisiting Funding Circle
July 21, 2017Funding Circle’s SME Income Fund delivered profits last year not only in the UK segment, but also in the US segment, according to sources. As the UK is Funding Circle’s home market, it naturally generated more revenue from it, but the margins were actually a lot higher in the US. The Fund’s 12-month calendar year ended on March 31st. The performance doesn’t reflect Funding Circle’s operations as a whole, just the publicly traded fund used to make loans through the company’s platform.
The fund’s Net Asset Value has reached £164.8M, Peer2Peer Finance News reported. Investors received dividends equal to 6.5 pence per share over the last year.
Funding Circle the company, has not filed its year-end 2016 financials yet. As a private limited company in the UK, they’re still a couple months away from the deadline to do so. In 2015, they lost £18M on £23.8M in revenue, which they attributed to their growth strategy.
Unlike with Lending Club and Prosper, anyone investing in a Funding Circle loan in the US must be accredited. Funding Circle Securities is the affiliated broker–dealer of Funding Circle USA. Lending Club and Prosper have a special arrangement with the SEC to work with retail investors. As part of that, every single loan on their platforms must be filed with the SEC as an individual security complete with a full prospectus.
Earlier this month, Funding Circle hired a new Global CFO, Sean Glithero, who was previously the CFO at Auto Trader.
Former Bizfi COO Now at iPayment
July 18, 2017Former Bizfi chief operating officer Tomo Matsuo is now a senior vice president at iPayment, according to LinkedIn. Matsuo worked at Bizfi from February 2011 until June 2017. In addition to running the company’s operations, he was also president of Bizfi’s Asia affiliate.
Last month, iPayment, a payments company with more than 140,000 customers, entered into a partnership with RapidAdvance to be their de facto small business funding provider.
Bizfi Layoff Tally
July 17, 2017According to labor records, Bizfi gave a 90-day layoff notice to 74 employees on May 15th. Less than a month later on June 12th, the company gave notice to another 43 employee, bringing the total to 117.
Those layoffs are scheduled to take place on August 13th and September 10th accordingly.
The CFPB is Asking The Wrong Questions, Bank President Says
July 13, 2017David Ludwig, the Bismarck branch president of Security First Bank of North Dakota, responded to the CFPB’s small business lending RFI earlier this week. In his written comment, he points out the futility of examining race, gender and ethnicity to judge how a lender is approving business loans. These data points are what the CFPB is hoping to gather pursuant to Section 1071 of Dodd-Frank to examine potential discrimination.
“The bureau appears to only want to know the applicants’ income, sex, race, amount of request and if the loan was approved or not,” he wrote. “Some people have less education, less ability, less equity and not so good credit history. These are not sex or race issues.”
Ludwig says there is no place for discrimination in lending and that if the CFPB was really interested in attributes about business owners that may be impacting their approvals, they should be asking about the owners’ work history, education, equity in the business, loan purpose and other related questions.
Daniel Gorfine Moves On From OnDeck to CFTC
July 10, 2017Daniel Gorfine has moved on from OnDeck, according to a public announcement made by his new employer, the US Commodity Future Trading Commission (CFTC). Gorfine served as OnDeck’s VP of External Affairs and Associate General Counsel for a little over 2 and a half years.
His new job, an appointment made by Acting CFTC Chairman J. Christopher Giancarlo, will be Director of LabCFTC and Chief Innovation Officer.
According to the announcement, “Gorfine will be responsible for coordinating closely with international regulatory bodies, other US regulators, and Capitol Hill to discuss best practices around implementing digital and agile regulatory frameworks and approaches for the CFTC.”
His background in fintech is expected to help the CFTC accomplish its goal of promoting fintech innovation and fair competition.
CFPB Pushes Back Small Business Lending Comment Deadline
July 7, 2017The CFPB has pushed back its small business lending comment deadline from July 14th to September 14th. The Request for Information is the first step of its initiative to monitor business loans to women and minorities, as directed by Section 1071 of Dodd-Frank.
Only 15 comments have been submitted so far, a number likely too small to even be helpful to the CFPB. Nonetheless, the comments have been overwhelmingly negative with respondents mostly asking to be exempt from the law or to repeal it.
The Director of Business Lending at a credit union for example, said that the law “puts our staff in the unenviable and unfair position of making an assessment of a borrower’s ethnicity when this information is not provided as if often the choice.” Between that and the cost burden of compliance, he also said his credit union is seriously considering the discontinuance of all small business lending going forward.
The total and complete discontinuance of small business lending is probably not what legislators wanted when they wrote the law.
Prior to that, the Puerto Rico Bankers Association questioned the value of spending big bucks to collect data on minorities when 99% of Puerto Rico’s residents are legally classified as minorities. “The potential complexity and cost of compliance with the minority-owned businesses data collection and reporting requirements of Section 704(B), will impose on our banks an unintended and unreasonable burden,” they said in their public comment.
Yellowstone Capital Funded $47 Million in June
June 30, 2017Yellowstone Capital funded $47 million to small businesses in June, according to an announcement the company made on social media. $40 million of that was funded in-house, the post said.
Yellowstone Capital was ranked by deBanked as one of the largest small business funders of 2016. The company could see their position rise this year since two companies ranked above them are no longer funding.
Pave Stops Lending
June 29, 2017Pave, an online lender that came on the scene several years ago by marketing fair funding to millennials, is no longer lending, according to their website.
American Banker reported that the company stopped making new loans earlier this month and was exploring strategic options.
Like many several online lenders of their time, Pave touted innovative underwriting beyond just FICO scores. “We start by reviewing the individual’s credit score and history, then incorporate additional factors like use of funds, work history, current employment, education and future earning potential,” Their website says. “This gives us plenty of opportunities to recognize how financially responsible a person can be, and it’s how we can give the lowest possible rate.”
To be eligible, applicants had to either have an income, a job offer, or plans to attend a school course.
In 2015, Pave announced that a consortium of lenders led by New York-based Seer Capital had agreed to invest up to $300 million in their loans.
