Articles by deBanked Staff
New York Supreme Court Grinds to a Halt
March 24, 2020Amid the Coronavirus pandemic, the New York Unified Court System has modified its protocols. Among the limitations, the Supreme Court will only be handling “essential applications as the court may allow.” Examples offered were Mental Hygiene Law Applications, civil commitments, and guardianships. All other matters and conferences are being adjourned to future dates.
These temporary rules went into effect on March 17th and will continue until further notice.
Knight Capital’s Intangibles As Reported Through Ready Capital’s Year-End Earnings
March 21, 2020Last year, Ready Capital Corporation (NYSE: RC) acquired small business funding provider Knight Capital.
RC’s year-end earnings provided some additional insight into the state of Knight Capital at the time it was acquired. This included balance sheet figures that recorded $48.4M in assets ($39.5M of which were purchased future receivables) and $31.8M in liabilities.
Among Knight’s intangible assets were a valuation of $880,000 assigned to the Knight Capital trade name, $1.2M assigned to the value of Knight’s broker network, and $3.8M assigned to the company’s internally developed software.
Goodwill of $11.2 million was recognized as the consideration paid exceeded the fair value of the net assets acquired.
View the full year-end financial statements by Ready Capital Corporation here
Online Lenders Ask Congress For Capital For Help and To Help
March 20, 2020
Members of Financial Innovation Now (FIN) have called on senior members of Congress to play a role in supporting small businesses with capital support and by loan distribution. Among their suggestions are:
- To direct Treasury to provide conditional capital to alternative lenders
- Permit these non-bank lenders to disburse loans, including via partnership with financial institutions
- Allocate a portion of funds for distribution via these lenders
FIN’s members include Amazon, Apple, Google, Intuit, PayPal, Square, and Stripe.
The organization also said:
An emergency Treasury facility will get funding to small businesses in a timely manner. FIN welcomes Congressional efforts to dramatically streamline Small Business Administration loans and include alternative lenders in this process as well.
Marketplace Lending Association Members Take Steps To Help Borrowers During The Coronavirus Crisis
March 17, 2020
Members of the Marketplace Lending Association are taking steps to alleviate financial pressure facing borrowers during the recent crisis.
“This includes providing impacted borrowers with forbearance, loan extensions, and other repayment flexibility that is typically provided to borrowers impacted by natural disasters. During the time of payment forbearance, marketplace lenders are also electing not to report borrowers as ‘late on payment’ to the credit bureaus,” a letter to senior members of Congress signed by Exec Director Nathaniel Hoopes states. “Members are also waiving any late fees for borrowers in forbearance due to the COVID-19 pandemic, posting helplines on company homepages, and communicating options via company servicing portals.”
Members of the MLA include:
- Affirm
- Avant
- Funding Circle
- LendingClub
- Marlette Funding
- Prosper
- SoFi
- Upstart
- College Ave Student Loans
- Commonbond
- LendingPoint
- PeerStreet
- Yieldstreet
- Arcadia Funds, LLC
- Citadel SPV
- Colchis Capital
- Community Investment Management
- cross river
- dv01
- eOriginal
- Equifax
- experian
- Fintech Credit Innovations Inc.
- FutureFuel
- Laurel road
- LendIt
- pwc
- Scratch
- SouthEast bank
- TransUnion
- tuition.io
- VantageScore
- Victory Park Capital
- WebBank
OnDeck’s Chief Accounting Officer is Leaving The Company
March 16, 2020On March 9th, OnDeck filed a disclosure with the SEC that their Chief Accounting Officer, Nicholas Sinigaglia, would be leaving the company on May 1st. Sinigaglia was with the company for more than 5 years.
OnDeck said it was doing this as part of changes it had made to streamline its finance organization.
Shares of OnDeck have dropped by more than 50% since that time, likely wrought by the sudden economic disruption.
OnDeck Shares Lose More Than 30% Of Their Value in a Week
March 11, 2020Shares of OnDeck have suffered in the last week as the market has seen a dramatic pullback. Shares have traded as low as $2.17 on Wednesday, down 12% from the previous day. The company’s market capitalization is at $128.2M million, down from its 2014 IPO value of $1.32 billion.
OnDeck, Lending Club Shares Battered By Market Turbulence
March 9, 2020The collateral damage of market panic led to all-time low share prices for online lending companies OnDeck and LendingClub on Monday. By noon, OnDeck was down 7.5% on the day at $2.55 (the low was $2.47) and LendingClub was down 5% at $9.62 (the low was $9.26).
Online lender Elevate also hit a new all-time low of $2.50.
Maryland Legislative Committee to Meet On Merchant Cash Advance Prohibition (Rescheduled to Wednesday)
March 2, 2020Legislators in the Maryland State House will meet today on Wednesday at 1pm EST to discuss HB-1478, a bill to make merchant cash advances illegal in the state. A similar meeting is taking place tomorrow in the State Senate. The House meeting was originally scheduled for Monday but was postponed.
All four of the House bill’s sponsors are republicans. Today’s committee is expected to discuss the potential small business effect of prohibition. A legislative note that circulated before hand cautions that:
Any small businesses that utilize merchant cash advances, as defined by the bill, may be impacted, as the bill no longer allows such transactions. The Office of Commissioner of Financial Regulation advises that small businesses are likely to engage in merchant cash advance transactions, as they accept credit card payments and those receivables are their greatest source of liquidity. As such, prohibiting the use of such transactions may remove a source of financing that has traditionally been available to small businesses in the State. Additionally, prohibiting the use of merchant cash advance transactions may also affect small business lenders in the State that engage in these types of activities.
The bill, as written, would outlaw credit and debit card split transactions if it passed.
This bill prohibits a buyer from arranging, facilitating, or consummating a “merchant cash
advance transaction” with a seller in the State. The bill defines “merchant cash advance
transaction” as an arrangement between a buyer and a seller in which the buyer agrees to
purchase an agreed-on percentage of future credit or debit card revenues that are due to a
seller for a predetermined purchase price.
