Articles by deBanked Staff

Amex to Continue Extending Credit to Small Businesses, Not in Same Position as Smaller Banks

April 20, 2023

American Express plans to continue extending credit to small businesses despite some of the challenges in the economy, according to the company’s latest quarterly earnings call. CEO Steve Squeri said that the company isn’t in the same position as a lot of the other smaller banks right now.

“…for those credit worthy small businesses we will continue to extend credit and it could be an opportunity for us actually, provided the credit is good,” Squeri said. Part of that opportunity, Squeri explained, was in being able to service businesses that historically had not considered them a “lender of first resort.”

Amex’s business loan division was formerly known as Kabbage. It rebranded to Business Blueprint in January.

Broadly, times are good for Amex. The company experienced a record-setting first quarter with $14.3B in revenue and a healthy profit of $1.8B.

Percentage of Merchants Seeking MCAs in 2022 Waned But Approval Rate Went Up

April 19, 2023

Article by: deBanked Staff

Only 7% of small businesses that applied for financing in 2022 applied for a merchant cash advance, according to the most recent report published by the Federal Reserve. Of those, 90% reported being approved for some amount of capital. That’s up from the 84% in 2020 and up from the 87% reported in 2019 prior to the pandemic. Approvals, it appears, were quite generous in 2022.

Overall, the percentage of merchants seeking MCAs has dipped, however. In 2019 for example, 9% of businesses said that they were seeking an MCA. In 2021 it was 8%. In 2022 it was 7% as mentioned above. The decrease could be explained by the pandemic which introduced an abundance of free and low interest government business aid. Also, the proliferation of low-cost online lenders created by the 0% interest rate environment may have weakened demand for alternatives like MCAs. Given that much has changed in the last 4 months, the Fed’s next report (scheduled for release in approximately March 2024) stands to be much more informative.

The most recent report can be downloaded here.

Goldman Sachs Cutting Loose its Marcus Loan Portfolio, Is Going Hard on Savings Accounts

April 18, 2023

Article by: deBanked Staff

Goldman Sachs followed the windup of its Marcus online lending business by taking a $470M loss on a partial sale of its loan portfolio and transfer of the rest of it to held for sale, the company revealed. Marcus still exists for the bank as an online savings account brand, which it has found very adept at acquiring deposits.

Goldman’s actions with Marcus were explained in January when CEO David Solomon said “…we tried to do too much too quickly.”

When Marcus first launched, Goldman Sachs was widely viewed as trying to compete with LendingClub in the online lending space. Both companies are now more famously known to consumers for another product, a high yield savings account. Marcus offers 3.9% APY on savings right now while LendingClub offers 4.25% APY. Despite LendingClub’s perceived edge here, Goldman Sachs announced yesterday that it was teaming up with Apple to offer an Apple Card savings account that pays 4.15% APY.

Only a Few Weeks Until Broker Fair 2023

April 13, 2023

Article by: deBanked Staff

The clock is ticking. Broker Fair 2023 at the New York Hilton Midtown is just around the corner on May 8th. Once again, professionals from the small business lending, commercial financing, revenue-based financing, leasing, equipment financing, factoring, and mca industries, will come together in the heart of New York.

This is the biggest annual small business finance conference in Manhattan and the sixth one to have taken place since 2018.

See last year’s sizzle reel:

Georgia’s Commercial Financing Disclosure Bill Now on the Governor’s Desk

April 10, 2023

Article by: deBanked Staff

Georgia is on track to become the latest state to pass a commercial financing disclosure law. This state’s bill passed through both the House and Senate and was delivered to Governor Brian P. Kemp on April 5th to await his signature. When that happens, Georgia will join a list of mandatory disclosure states that includes California, New York, Virginia, and Utah.

Other states that currently have disclosure bills up for debate in their respective legislatures include: Connecticut, Missouri, North Carolina, Florida, New Jersey, Kansas, and Illinois.

No, FedNow Payments are Not a Digital Currency

April 9, 2023

Article by: deBanked Staff

The Federal Reserve is launching a new instant payments service called FedNow in July 2023. However, there is apparently a common misconception that FedNow is a form of digital currency or a step towards eliminating cash. On April 7, the Fed felt it had to release a statement to say that a central bank digital currency (CBDC) was not currently in process.

“[FedNow] is like other Federal Reserve payments services, such as Fedwire and FedACH,” the Fed wrote. “FedNow will be available to depository institutions, such as banks and credit unions, in the United States and will enable individuals and businesses to send instant payments through their depository institution accounts. Instant payments allow individuals and businesses to send and receive payments within seconds at any time of the day, on any day of the year, so that the receiver of a payment can use the funds almost instantly.”

FedNow could offer a compelling usecase in the alternative lending industry but that will remain to be seen. In the meantime, as far as CBDCs go, the Fed says that it would need support from Congress and the executive branch “ideally in the form of a specific authorizing law” to consider issuing one. CBDCs have been a popular subject as of late given the total control they could give a governmental authority over its money. Among the potential capabilities would be the power to technologically deactivate or cancel anyone’s money if the government felt it was it being used for some unlawful purpose.

Intuit Originated $933M in Small Business Loans in FY 2022

April 5, 2023

Article by: deBanked Staff

Intuit, the software company often associated with Quickbooks, originated an astounding $933M in small business loans in its fiscal year 2022. That’s up substantially from the $232M it originated in FY 2021.

It’s important to note that the company’s fiscal year 2022 ended on July 31, 2022 which means more data exists beyond that time. From Aug 1, 2022 – October 31, 2022, the company originated $314M in business loans. In the quarter that followed (Nov 1, 2022 – Jan 31, 2023), Intuit renamed the easily identifiable line item from “originations and purchases of term loans to small businesses” to “originations and purchases of loans” which may bear some significance given that it indicates a steep increase to $701M for that quarter, a record for Intuit by far. If that was entirely business loans then it would place Intuit amongst the largest small business lenders in the country.

All Registered Sales-based Financing Providers in Virginia (As of 3-29-23)

April 2, 2023

Article by: deBanked Staff

Is the revenue-based financing provider you do business with registered to operate in Virginia? On July 1, 2022, Virginia’s commercial financing disclosure law went into effect and with that the necessity to register one’s business. As of March 29, 2023, 101 companies had registered. This is the official list of registered sales-based financing providers as of that date (yellow means it has been added since our last update):