Articles by deBanked Staff
New York DFS Publishes New Proposal on Commercial Financing Disclosure Law
September 15, 2022
The New York regulator in charge of rolling out the commercial financing disclosure law, published a new draft of the rules in the State Register yesterday.
In it, the New York Department of Financial Services (DFS) also gave its own assessment of the comments received from potentially covered parties.
“Some commenters are opposed to the basic purpose of the Commercial Finance Disclosure Law (“CFDL”), Financial Services Law (“FSL”) sections 801-811, and accordingly are opposed to the regulation,” DFS said. “Most commenters acknowledge the need for the rule to implement the CFDL and made comments intended to improve the regulation from their perspective.”
Thus, with all of the feedback previously received, the new proposal is out. The public now has until October 31st to provide further feedback to it.
Funding Circle US Originates $168M in 1st Half of 2022
September 8, 2022
Funding Circle’s US arm originated $168M worth of small business loans in the first two quarters of 2022.
“In the US, we continued to offer our commercial loan product during the six months to June 2022 and we have expanded this offering to serve super-prime businesses,” the company said in its latest financial disclosures.
Notably, Funding Circle closed funding deals with four banks and credit unions during the period and anticipates adding new investors as the year continues.
Globally, Funding Circle says it has helped 130,000 small businesses access $19.4B in funding since inception.
“Lending investor returns through the platform remain robust and attractive,” the company said on LinkedIn. “We’re making early progress against our medium-term plan to transform the business into a multi-product platform, as we continue to help more small businesses get the funding they need to win.”
Who’s Growing in the Industry?
September 6, 2022Despite Covid, several small business finance companies successfully secured spots on the 2022 Inc 5000 list for their stellar 3-year revenue growth. Here’s a snapshot of who made it:
| Ranking | Company Name | 3 year growth % |
| 127 | Crestmont Capital | 3,548% |
| 271 | Fountainhead | 2,006% |
| 799 | Business Lending Blueprint | 793% |
| 835 | Clearco | 755% |
| 970 | Valiant Business Lending | 668% |
| 1,047 | Funding Forward | 618% |
| 1,240 | Lending Science DM | 524% |
| 1,587 | Lendio | 401% |
| 1,876 | Choice Merchant Solutions | 324% |
| 1,970 | Nav | 306% |
| 2,343 | Novae | 250% |
| 2,886 | Velocity Capital Group | 189% |
| 3,262 | Fundbox | 162% |
| 3,410 | SBG Funding | 154% |
| 4,284 | Flexibility Capital | 107% |
| 4,367 | Fund&Grow | 103% |
| 4,737 | ApplePie Capital | 89% |
| 4,959 | Fundomate | 82% |
The Inc 5000 list requires companies to apply and submit data. Companies that may have qualified to be ranked could have chosen not to apply.
First Criminal Charges in MJ Capital Funding Saga
September 6, 2022
Criminal charges have finally been introduced to the MJ Capital Funding ponzi scheme saga. Last week, 29-year-old Pavel Ramon Ruiz Hernandez was charged by federal prosecutors with Conspiracy to Commit Wire Fraud. According to the allegations, Hernandez helped manage the operations of MJ Capital and oversaw significant fundraising efforts for the company while knowing that the business was a ponzi scheme. All told, it’s alleged that he and his co-conspirators defrauded investors out of $42 million.
MJ Capital Funding pretended to be an MCA provider but did not actually operate an MCA business, nor was the company known within the MCA industry.
Much of the investigations have focused on Johanna M. Garcia, the CEO of the company, but to date she has not been criminally charged.
If Ruiz Hernandez is convicted, he faces a maximum penalty of 20 years in prison, the DOJ states. The MJ Capital ponzi scheme is reported to have affected over 9,000 investors.
NerdWallet Comments on Fundera’s Contribution to Its Business
August 30, 2022
When NerdWallet acquired Fundera two years ago, few people were shocked. That’s because the nation was months into the covid crisis and M&A was happening at a furious pace. The $29.2M paid at closing with a potential earn-out of up to $66M, however, suggested Fundera stood to play a significant role with the company, especially given that NerdWallet generated only $379.6M in revenue in 2021.
More recently in Q2 2022, the SMB side of NerdWallet’s business has been doing well. NerdWallet CEO Tim Chen said, “This past quarter, our SMB business continued its momentum with triple-digit year-over-year revenue growth.”
While Fundera’s SMB loan generating business contributed to that, Chen said that NerdWallet had been successful in “landing and expanding within new SMB areas such as payments, insurance and accounting services.”
“The progress we’ve made since the Fundera acquisition is not only great news for SMB, we also think it underscores opportunities enabled by vertical integration more broadly,” Chen said. “Given this success, we furthered our vertical integration efforts through our acquisition of On the Barrelhead, a loan matching platform that connects consumers and SMBs with products from its lending partners.”
“…We are increasingly encouraged by the success we’ve seen in SMB,” said NerdWallet CFO Lauren StClair Waugh, “and we have shown our ability to run our integration playbook and direct our strong organic traffic through Fundera’s efficient and reoccurring funnel.”
NerdWallet has been pleased with its acquisitions.
“We’re going to be very prudent about our M&A strategy, and price will remain an important consideration for us in evaluating all opportunities,” Chen stated. “At times, macroeconomic volatility will present opportunities to buy great businesses at reasonable prices. This was the case with both Fundera and On the Barrelhead. We will continue to take an opportunistic approach to M&A in the future to further accelerate and enhance our capabilities.”
NerdWallet generated $125.2M of revenue for the quarter and a net loss of $9.3M.
Arrangements for Nick Gregory of CDG: Rest in Peace
August 29, 2022Nick Gregory, a co-founder and partner of both Central Diligence Group and Capital Dude, passed away suddenly last Thursday. Gregory was a well-known and beloved 16-year veteran of the small business finance industry. If you’d like to pay your respects, please take note of the following arrangements:
Wake Location:
Roslyn Heights Funeral Home
75 Mineola Ave
Roslyn Heights, NY 11577
Tues August 30th: 3-5PM, 7-9PM
Wed August 31st: 3-5PM, 7-9PM
Mass:
Thurs September 1st, 10AM:
St. Mary’s Roman Catholic Church
110 Bryant Ave, Roslyn, NY 11576
-Funeral Procession to Cemetery-
Burial:
11:30-11:45AM:
Cemetery of the Holy Rood
111 Old Country Rd, Westbury, NY 11590
Only Two Months Until Broker Fair!
August 24, 2022Broker Fair is officially TWO MONTHS away! Taking place at the New York Marriott Marquis in Times Square, New York City, this event is shaping up to be the BIGGEST conference for the small business finance industry in all of 2022.
Don’t wait too late to register. These events sell out. Book your room and get your ticket now to secure your opportunity to network with and learn from who’s who in the small business finance universe!
Prosper Marketplace Originated $891.9M in Loans in Q2, Records $42.6M Profit
August 23, 2022
Despite some uncertainty in the lending markets, Prosper Marketplace had a fairly good quarter. The company originated $891.6M in loans in Q2, nearly double the volume over the same period last year. Profitability too was there, coming in at $42.6M, up from a loss of $5.8M in Q2 2021.
Notably, Prosper did acknowledge that the fair value of its loans were being affected by an increase in capital markets volatility and benchmark interest rates but neither were enough to hurt the company.
Prosper is a holdout of the peer-to-peer lending era in that it still has a “note channel” for investors. Ninety-one percent of all loans funded in the second quarter, however, were done through the Whole Loan Channel, up from 87% during the same period last year.
Prosper is in the business of originating consumer loans with 3-5 year terms and interest rates ranging from 5.31% to 31.82%.
