Articles by deBanked Staff
New Challenge to MCA Legality in New York
February 10, 2023
It’s effectively well settled law, that proper purchases of future receivables are not considered loans in New York State. But a three year-old merchant cash advance case is poised to become center stage for a fresh review of that policy.
At issue is AH Wines Inc., et al. v C6 Capital Funding LLC which the New York Court of Appeals recently agreed to hear. The crux of the plaintiff’s arguments has been that defendant’s purchase of future receivables was actually a usurious loan. The plaintiff was unsuccessful at both the trial court level and appellate level with their case and so appealed to the highest possible court in New York, the Court of Appeals. On February 9, the motion for leave to appeal was granted.
A Quick Analysis of Bank Data? Kuboon!
February 8, 2023
Accessing a small business borrower’s bank statement data is nothing new but Kuboon, not to be confused with kaboom, gives the whole experience an upgrade. A lender can embed Kuboon’s technology into their existing CRM with a simple line of code and be up and running in no time.
According to Kuboon VP of Sales Brysen Partridge, the technology doesn’t necessarily compete with universal tools like Plaid and Finicity because Kuboon actually uses them too.
“So we compare differently because our engines are far more advanced,” said Partridge, “[The big aggregators] give you a small out of the box engine of just giving the transactions and then you have to come up with your dev team to try and filter out and fix and categorize all those transactions and make them into something useful. We do all that for you…”
Partridge said that’s far from everything. “It’s not just bank details,” he said. “We have payroll and ID data. We have other sources that are coming in soon that will provide a ‘complete integrated intelligence.'”
Recognizing that not everyone will embed it, Partridge said that Kuboon can also be used as its own standalone CRM, a feature they call Kuboon Lobby and that many clients choose to use it this way.
Lightspeed’s MCA Business is Growing
February 2, 2023Lightspeed Commerce, a global e-commerce platform for merchants, reported an increase in its merchant cash advance business in its latest earnings report. As of December 31, 2022, $15.8M of mcas were outstanding, up 25% from the previous quarter, the company announced.
Lightspeed is no small company. It reported $188.7M in total revenues for the most recent fiscal quarter, $74.5M of which was drawn from subscriptions and $107.2M from transactions.
“To further complement our core cloud solutions, we offer a merchant cash advance program called Lightspeed Capital,” the company said in its quarterly statements. “This program provides cash advances to eligible merchants and is designed to help them with overall business growth and cash management.”
New York Finalizes its Commercial Financing Disclosure Rules
February 1, 2023
That’s all folks. New York State’s Department of Financial Services has finalized its rules on commercial financing disclosures. The Fifty-three page rulebook dictates what covered parties will be required to do.
“The New York State Department of Financial Services received 21 comments on proposed revised rule 23 NYCRR 600,” a note accompanying the finalized rules said. “The Department has considered every comment received and has made several revisions…”
Those expecting years of possible back-and-forth commentary like what happened in California may be surprised to find that this is the final version. The effective date of the rule is the date the notice is published in the State Register, but compliance with the rules themselves is slated to take effect six months from that date (please consult with attorney to confirm).
“Clear and easy-to-compare disclosures are paramount as entrepreneurs and small businesses evaluate financing,” said DFS Superintendent Adrienne A. Harris in an official press release.
Kabbage Rebrands to Business Blueprint
January 31, 2023
Kabbage by American Express is now Business Blueprint. A lot of terminology on the former Kabbage website, which now forwards to an official page on the American Express website, have already been reworded. Kabbage Funding, for example, is now being referred to as American Express Business Line of Credit and the Kabbage mobile app is now the American Express Business Blueprint app.
On social media, American Express Group President of Global Commercial Services & Fraud Risk at American Express said, “today marks an important milestone for us, as we fully integrate Kabbage into American Express with the launch of Business Blueprint.” Marrs continued by saying that American Express will work towards becoming a digital one-stop-shop for small businesses’ financial needs.
Although it is not specifically stated, negative news headlines related to Kabbage’s former PPP business before the American Express acquisition probably contributed to the official rebrand.
Small Business Fears Are Actually Calming Down
January 31, 2023
Right now small business owners are less concerned about rising inflation, a possible recession, staffing issues, consumer demand, and public health than they were in July 2022. Those are among the findings of a recent small business survey conducted by IOU Financial. It appears the fear, uncertainty, and doubt of what the end of 2022 might bring has since subsided and even transformed into a sense of optimism!
Eighty-eight percent of respondents, for example, now project that their business will be somewhat better or much better by the end of the first half of 2023 than they are right now. Sixty-one percent say they even plan to invest in their business over the next 6 months.
The improvement in sentiment seemingly stands in stark contrast to news coming out of the large tech companies that were plagued by layoff announcements all last quarter. The small business sector is looking a little more resilient by comparison, although it still has fears of its own. Seventy-three percent of respondents are still concerned about rising inflation but that’s down from 84% in July and 44% are concerned about consumer demand but that’s down from 62% respectively.
While the circumstances of the economy aren’t exactly great and the impact of rapidly rising interest rates has yet to be determined, this survey at least suggests that small businesses are getting used to this reality.
White House Reiterates Support for Lifting the SBLC Moratorium
January 26, 2023
Now that the opportunity to comment on the SBA’s proposal to lift the moratorium on new SBLCs has passed, the Biden administration has reiterated its support for the initiative. It convened a roundtable with leaders across the small business space on Tuesday “to discuss its commitment to ensuring small businesses have the access to the capital, technical assistance, and support they need to thrive.”
The administration said that if the moratorium is lifted, the “SBA would plan to add three licenses in the initial extension” and that “it would open a path for the Community Advantage program to become permanent.”
The SBA received 169 official comments on the proposal, some in support and some against.
deBanked CONNECT MIAMI 2023 Photos
January 22, 2023Photos from deBanked CONNECT MIAMI 2023 are now online. Thank to you all the speakers, sponsors, and attendees that made the day possible.
