Articles by deBanked Staff
OnDeck Update 6/23
June 24, 2020On June 23rd, OnDeck filed the following statement with the SEC:
On June 23, 2020, we obtained a limited consent (“Consent”) for our corporate debt facility (“Corporate Facility”). Under the Consent, the lenders consented to delay the effectiveness of the increased monthly principal repayments until July 14, 2020 (or such later date as may be agreed by the Administrative Agent), which were triggered by an Asset Performance Payout Event (Level 2) (“APPE”) that occurred on June 17, 2020. In consideration for the Consent, the Company agreed to make a $5 million principal repayment (“Repayment”) substantially concurrent with the execution of the Consent. Under the Consent, the lenders also agreed that, at the Company’s option, the Repayment will either (i) reduce the amount of the monthly principal repayment due on July 17, 2020 by the amount of the Repayment or (ii) if the parties enter into an amendment on or prior to July 17, 2020, be credited towards any principal repayment required under that amendment. The Company entered into the Consent in contemplation of entering into a broader amendment to the Corporate Facility to address impacts stemming from the COVID-19 pandemic. If such an amendment is not entered into, the APPE triggers $21 million monthly principal repayments which, if not cured, would commence on July 17, 2020 and continue until the Corporate Facility is repaid in full. The Company made a payment of approximately $13 million on June 17, 2020 as a result of the previously disclosed Asset Performance Payout Event (Level 1), bringing the total balance outstanding as of that date to approximately $92 million. The Revolving Commitment Termination Date occurred as a result of such Level 1 event. Certain capitalized terms not defined in this section of the report are used with the meanings ascribed to them in the Corporate Facility as amended by prior amendments thereto and the Consent.
Shares of OnDeck closed at 86 cents yesterday. The company was previously warned that long-term pricing below $1/share would result in delisting from the New York Stock Exchange.
IOU Financial Affected By COVID-19
June 23, 2020IOU Financial approved the re-appointment of all of its current directors and auditors yesterday. The company, however, is currently experiencing challenges similar to other online lenders.
In late May, the company filed its Q1 financials and revealed that the COVID-19 pandemic had put them in an “over-advance position with its financing credit facilities.” At the time, the issue remained “uncured” and “the company received default notices subsequent to quarter end.”
“The Company and the financing credit facilities are working together to remedy the situation,” IOU reported. “Nevertheless, there is no assurance that these initiatives will be successful.”
IOU had furloughed 40% of its full-time employees and implemented a temporary 20% reduction in salary for all remaining employees commencing on April 1, 2020.
The company’s market cap has plummeted to CAD$7 million, down from $18 million in February. The company had previously been on a fairly positive trajectory until Q1 when they cranked up their provision for loan losses in anticipation of the fallout caused by the pandemic.
PayPal Appoints New Chief Accounting Officer
June 17, 2020PayPal promoted Jeffrey Karbowski from Global Controller to Chief Accounting Officer. Karbowski is also the company’s vice-president. His new position takes effect on July 31, 2020.
Karbowski has been with the company since 2013.
Most Brokers Plan to Minimize Use of a Central Office Post-COVID, Survey Suggests
May 26, 2020
A survey conducted by Overland Park, KS-based Strategic Capital revealed that only 36.8% of respondents plan to completely return to the office full-time after cities fully open back up. The vast majority of respondents were small business finance brokers.
44.7% selected that they would minimize office space or only use office space to house core team members while 18.4% planned to terminate their office lease altogether and adopt a work from home model permanently.
Deloitte Sued Over Audits of Failed DLI Fund
May 7, 2020Those affected by the failure of Direct Lending Investments (DLI) have added a new target to blame, Deloitte & Touche LLP and related entities.
A lawsuit filed last week in the Superior Court of California says that Deloitte was engaged by DLI to audit the Funds’ financial statements and accompanying footnotes in accordance with GAAP for the years ending 2016 – 2018 and issued clean unqualified audit reports that “negligently ratified and confirmed the false valuations contained in the financial statements and footnotes disseminated to the Plaintiffs.”
Enova On Their Small Business Lending Exposure
April 30, 2020Enova’s exposure to the small business lending crisis is limited, the company said during its earnings call yesterday. The Business Backer and Headway Capital are two of the international consumer lending company’s small business lending divisions.
In terms of their overall loan book, small business loans only make up a percentage worth in the teens. “It’s very much manageable for us,” CEO David Fisher said. Fisher also said that they did not have large exposures to entertainment, hospitality and restaurants in their small business loan portfolio and were well diversified.
“Defaults […] have not increased anywhere near as much as we would have expected. Lots of payment deferrals and modifications, but with the PPP checks coming in and states opening back up, we are somewhat encouraged that we haven’t seen very high levels of default yet.”
Enova reported a consolidated Q1 net income of $5.7M.
Fundry Donates $25,000 to Community FoodBank of New Jersey
April 29, 2020Jersey-City based Fundry made a $25,000 donation the Community FoodBank of New Jersey this week. CFBNJ is an organization that “fights hunger and poverty in New Jersey by assisting those in need and seeking long-term solutions.” In addition to the over 40 million Americans who struggle with hunger every day, an estimated 17.1 million more people will experience food insecurity during this crisis, the organization says on its website.
Thank you, @FundryC, for such a generous donation! Support like this is essential as we continue to meet the growing need. https://t.co/kLhDxn5orJ
— Comm. FoodBank of NJ (@CFBNJ) April 28, 2020
Lending Club Sheds 460 Employees
April 21, 2020In response to changing economic conditions, Lending Club announced that it has put a plan in place that will reduce its workforce by 460 employees.
That comes in addition to temporary reduced salaries for the company’s top executives including CEO Scott Sanborn who agreed to a 30% cut in his base compensation.
The company’s stock closed $7.39 on Tuesday, up from its April 3rd all-time low of $6.85.
