Articles by deBanked Staff
Merchant Indicted For Sending Fake Bank Statements to Online Lenders
December 7, 2020On December 17, 2018, the owner of a mexican restaurant in Springfield, Illinois, is alleged to have submitted altered bank statements to National Funding, Inc as part of a loan application to obtain $35,000. What he got in return was an indictment by a federal grand jury.
On Dec 2, 2020, the US District Court for the Central District of Illinois unveiled a seven-count indictment against Omar Hernandez-Lopez. Hernandez-Lopez is the owner of El Tapatio De Jalisco Inc DBA La Fiesta Grande.
Prosecutors say Hernandez-Lopez sent doctored PNC bank statements to two lenders, National Funding and Loan Depot in multiple instances. The actual charge is that the defendant knowingly made a false statement for the purpose of influencing the action of a lender in connection with a loan application.
Apparently, no falsehood is too small. For example, in one count the defendant is alleged to have changed a monthly ending bank statement balance of negative $72.91 to positive $131.90, a difference of $204.81. He is also said to have obscured the amount incurred in overdraft fees.
The penalty if found guilty on any one count? Up to 30 years in prison.
Prosecutors cite Title 18, United States Code,§ 1014.
Defendant is innocent until proven guilty. A copy of the indictment can be viewed here.
Enova Appoints James J. Lee to Chief Accounting Officer
November 30, 2020Enova International announced the appointment of James J Lee to the position of Chief Accounting Officer. The new role went into effect on November 23rd.
Lee was previously the Controller of Life & Health of Kemper Corporation.
Fintech IPOs Are Back
November 18, 2020Fintech IPOs are back. Affirm, a fintech company whose platform offers “a point-of-sale payment solution for consumers, merchant commerce solutions, and a consumer-focused app,” is the latest company to file for an IPO.
Affirm’s S-1 was filed earlier today, revealing that they intend to raise $100 million. The company generated $509M in net revenue during its fiscal year ending June 30 and a net loss of $112 million.
Fintech | Date Filed | Date Public | Amount Raised |
Affirm | 11/18/20 | ||
Upstart | 11/6/20 | ||
Lufax | 10/8/20 | 10/30/20 | $2.36B |
Ant Group | 8/25/20 | Delayed |
Unrelated to fintech, but still “tech” are pending IPOs for DoorDash and Airbnb.
In Loving Memory of Elliot J Dabah
November 17, 2020Elliot J Dabah, CEO of NYC-based Merchants Cash Partners, LLC, recently passed away. Known throughout the merchant financing industry, friends and colleagues began collecting kind words to reflect on his life to be able to share them here.
Elliot Ashkenazie, his business partner and best friend, said “Elliot Dabah would step up and help anyone in need whether that be his own employee, another ISO, or a complete stranger on the street. He didn’t keep any secrets so he would have an advantage over others, he simply paid it forward and helped the community as a whole benefit from it. Merchants Cash Partners will work tirelessly to carry on his legacy and his values.”
“Elliot Dabah was the heartbeat of the Financial District and he was an integrated part of my life, both professional and personal,” said Gigi Russo. “Not only did Elliot and I live three blocks from each other, but I first had the privilege and pleasure of meeting him while I was working for deBanked, at CONNECT San Diego. We quickly became close friends. He truly never took advantage of our tight knit friendship. His professional support was a reflection of his character— a respectable person that respected his family, friends and business associates. Elliot wanted everyone to succeed. He believed that friends and business colleagues should support one another to build a viable network.”
Tom Dool of Power Funding, said “Of all of the offices I’ve ever visited, I can honestly say that no other partner of mine compares to Merchants Cash Partners. From the moment I met both Elliots, they were inviting. I could tell right away that they had a special bond of shared enthusiasm, honesty, generosity, thoughtful, caring people.” He adds, “Elliot [Dabah] lived life with such a genuine love for people and getting to know people, discussing higher level ideas, sharing feelings. He was one of the best and I’ll never forget him.”
“Elliot was one of the most welcoming people I had the pleasure of knowing,” says Colt Kucker of Libertas Funding, “and always tried helping out whether it be a customer, myself, or anybody in need. He was a hard worker and will truly be missed by all he came across.”
Justin Friedman of Enova SMB, described Dabah, “Smart, strategic, urgent, generous and wise are a few words to describe Elliot. He was universally popular and a known professional in our industry, which isn’t common to come by. He cared about his customers and business relationships. Elliot’s presence in alternative lending was a positive one and he will be remembered for exactly that.”
Ben Lugassy of SOS Capital states that he was “Always smiling and enthusiastic, Elliot was the embodiment of joyful. A friend with tremendous respect and gratitude, he will always be remembered and in our prayers.”
Paul Boxer of Velocity Capital Group added, “Every-time I met Elliot he had the largest smile, always happy to talk shop and discuss the industry. He was very knowledgeable and had a wealth of information, he will surely be missed.”
Ken Peng of Elevate Funding recounts that Elliot, “was always great to work with. He was always very friendly and understanding when we did review any of his files. He will be missed.”
Gigi Russo, who was instrumental in putting this tribute together, further added that Elliot “treated everyone he came into contact with as a friend.” He has “a sincere, dignified, and affable reputation that will follow him after his passing. He will surely be remembered for supporting his colleagues, clients, business acquaintances, and network. The legacy Elliot has left behind is simple: Respect one another. Support one another. Honesty and hard work are necessities of success.”
Part of Elliot’s legacy is the company he built. Merchants Cash Partners, despite the pandemic, was so successful this year that it outgrew its office space.
“Elliot had a revolutionary style of making this industry a community,” says his partner Ashkenazie. “He referred clients and prospects alike to small firms and national firms, expecting nothing in return.”
Coincidence would have it that a photo of Elliot at a deBanked event was often used in event marketing promotions. As to how that picture came to be used so prominently, deBanked President Sean Murray said that “Elliot embodied the community we were trying to portray. A nice young business professional who radiated positive energy. Who is part of this industry? It’s guys like Elliot. That’s what we wanted everyone to know.
“Elliot totally noticed how often we were sharing his photo,” Murray said. “He told me that he thought that was pretty cool.”
PayPal Still Leads in Unsecured Small Business Lending
November 12, 2020PayPal recently disclosed the dollar amount of receivables it had “purchased” between its working capital and business loan program for the first 3 combined quarters of 2020. The figure was $1.5B, down by more than half from over the same period last year. That would seem to suggest that the actual origination figure is probably $1.3B, which is still larger than some of its closest competitors. Numbers from rivals like Kabbage (recently acquired by Amex) and Amazon were not readily available.
For a larger comparison chart, click here.
2020 YEAR TO DATE:
Company | Q1 2020 | Q2 | Q3 | YTD TOTAL |
PayPal | $1.3B | |||
OnDeck | $592M | $66M | $144M | $806M |
Square Capital | $548M | $0 | $155M | $703M |
Shopify Capital | $162.4M | $153M | $252.1M | $567.5M |
Square Capital Lends $155M to Small Businesses in Q3
November 6, 2020Square Capital loaned $155M in Q3, according to the company’s latest earnings report.
“We paused new flex loan offers until the end of July and, upon resuming offers, we were measured in ramping origination volumes in August and September,” the company said. The $155M originated was spread out across 35,000 loans.
The figure puts them slightly ahead of OnDeck ($148M) for the quarter but well below Shopify Capital ($252M)
2020 YEAR TO DATE:
Company | Q1 2020 | Q2 | Q3 | YTD TOTAL |
PayPal | $1.3B | |||
OnDeck | $592M | $66M | $144M | $806M |
Square Capital | $548M | $0 | $155M | $703M |
Shopify Capital | $162.4M | $153M | $252.1M | $567.5M |
LendingClub’s Delinquency Rates Are Lower Now Than They Were Pre-Covid
November 5, 2020“Delinquency rates for the personal loan portfolio continue to outperform pre-Covid levels, even as most hardship plans have come to an end,” LendingClub announced in its Q3 earnings report. “Strong performance continues despite unemployment benefits largely coming to an end in July.”
The company ramped loan originations back up to $584M last quarter after hitting a low of $326M in Q2. Prior to Covid, the company was lending $2.5B to $3.5B a quarter.
LendingClub reported a Q3 net loss of $34.3M, bring the ytd net loss total to $160M.
Neuberger Berman Acquires Significant Stake in IOU Financial
November 4, 2020Neuberger Berman, an investment manager with $374B under management, is acquiring a 15% stake in IOU Financial, a small business lender. As part of the deal, one of the firm’s funds has agreed to purchase up to $150M a year of IOU’s loans over the next two years.
“This investment by a Neuberger Berman managed fund represents a strong vote of confidence in the fundamental, long-term value of our business, and is a testament to IOU’s loan origination and servicing capabilities in addition to its capital markets capabilities” said Phil Marleau, CEO of IOU, in a public statement.
Additionally, Neil Wolfson, a former board member to rival OnDeck, is joining IOU’s board of directors.