Articles by deBanked Staff
Another Small Business Loan Marketplace is Getting a Massive Venue
January 22, 2024
What’s the difference between a typical bank having naming rights to a sporting arena and a fintech lender? The fintech lender will attempt to serve as a one-stop-shop for everything. And that’s important because this October the Intuit Dome will open its doors in Inglewood, California and become the hometown arena for the LA Clippers. Intuit has a lot of brands. According to the NBA, Intuit subsidiaries TurboTax, QuickBooks, Credit Karma, and Mailchimp will all feature prominently in the venue experience. That draws attention to QuickBooks Capital, the company’s small business lending division which is presently generating more than $1 billion a year in loans. Intuit’s got a fallback option for businesses that might not be suitable for them directly, an automated marketplace that connects business owners with other lenders. It’s been so successful that Intuit states they’ve originated more than $2 billion in loans through it.
This seamless integration of referrals to other lenders is what makes the marketing campaign via arena naming rights so potent. And they won’t be the first ones to do it. SoFi, for example, whose football stadium is in walking distance to the Intuit Dome, just announced its own small business loan marketplace. SoFi Stadium was home to the Super Bowl in 2022 and will be again in 2027. It will also be home to the Olympics in 2028. Not a bad way to get one’s name out there.
Seven States Reintroduce Commercial Financing Bills
January 20, 2024
They’re BACCKKKK. The following states legislatures all have new bills in front of them for consideration.
North Carolina – Small Business Truth in Financing Act
Kansas – The commercial financing disclosure Act
Missouri – Commercial Financing Disclosure Law
New Jersey – An Act concerning commercial financing
Illinois – Small Business Truth in Lending Act
California – Commercial Financing Bill
SoFi Launches Small Business Loan Marketplace
January 18, 2024
SoFi small business customers can now get approved for a loan and funded up to $2 million in 24 hours. Structured as a marketplace where SoFi itself is not the lender, the company announced that “With one quick and simple search, business owners will be connected with SoFi’s network of financial providers who can help them get the capital they need.”
SoFi had flirted with the idea of small business loans previously and this appears to be their solution.
Judging by SoFi’s marketplace home page, OnDeck and LendKey are at least two of the lenders on the platform. Although the others were not immediately visible, the company said it “will continue to expand its network to include more providers and financial solutions for small businesses.”
Prosper Loan Originations down 50% YoY in Q3
January 17, 2024
Online consumer lending stalwart Prosper Marketplace originated $493.8M in loan originations in its last reported quarter. While it sounds like a lot, the company said that’s a decrease of 53% from the same period in 2022. Prosper originated $1.72B in loans for the first 9 months of 2023 vs $2.5B in loans for the first 9 months of 2022.
“…the mix of personal loan originations on the Prosper platform reflects a significant decrease in investor appetite for whole loan purchases under the current economic environment, specifically for personal loans not assigned Prosper ratings,” the company said in its financial reports. “These personal loans are sold only to institutional investors and based on specific underwriting criteria and custom risk models developed by these investors.”
Prosper Marketplace logged a cumulative net loss of $93M for the first three quarters of 2023.
Second Hearing on Broker Licensing in California
January 16, 2024The Judiciary Committee of the California State Senate was the next in line to discuss the continued push for commercial finance broker licensing. Several organizations came forward in support of the bill while others said that changes were necessary to the current proposal. The licensing bill (SB 869) was also discussed the day before in the Banking Committee.
You can watch the full thing below:
California Senate Committee Finds Support for Small Business Finance Broker Licensure
January 10, 2024The hot topic in a recent California Senate committee hearing was licensure for MCA brokers. In it, legislators took interest in broker commissions and how they’re paid. This was not a one-sided discussion. Representatives for Rapid Finance, Kapitus, Forward Financing, and the RBFC were present and able to give testimony. The general consensus was that a licensure framework was favorable but that there were still issues that need to be resolved. The bill at issue is SB 869.
You can listen to a copy of the audio we’ve obtained of the hearing on Spotify or watch the hearing in full below:
California to Hold Hearings on Commercial Finance Broker Licensing
January 8, 2024Members of the California state legislature are apparently not done with the commercial finance space. This time they want to expand the scope of the California Financing Law (CFL) to include “commercial financing providers” and “commercial financing brokers” for the purpose of licensure, regulation, and enforcement. In Senate Bill 869, commercial financing is defined as an “accounts receivable purchase transaction, including factoring, asset-based lending transaction, commercial loan, or lease financing, intended by the recipient for use primarily for a purpose other than a personal, family, or household purpose.”
While the bill was technically introduced last year, its progress stalled. Now it’s not only back but it will also be the subject of back-to-back committee hearings on January 10 and January 11. To the extent these hearings are publicly accessible, deBanked will livestream them.
Lightspeed Capital: ‘we intend to grow our MCA business’
January 4, 2024After facing criticism from stock analysts for not doing enough merchant cash advances, Lightspeed CFO Asha Bakshani said that the POS company intends to grow its MCA business. The comment came during the company’s fiscal Q2 2024 earnings call, where it revealed that it had originated $10.1M in MCAs for the quarter.
Bakshani noted, however, that by doing these deals on balance sheet, it has to balance its origination goals with its available working capital. Revenue on its MCAs were up 120% YoY.
One interesting detail is that the company revealed that its gross margin on MCAs is 95%.
Lightspeed is publicly traded on the NYSE under LSPD.
