Articles by deBanked Staff
Shopify Continues to Grow its Merchant Funding Business
May 8, 2025“We continue to grow our capital business and have recently introduced several product innovations that give merchants more choice for how they manage their loans, and how they choose among various loan options,” said Jeff Hoffmeister, CFO of Shopify during the Q1 earnings call.
The company had ~$1.4B in business loan & merchant cash advance receivables on its balance sheet as of March 31, 2025. It purchased & originated $805M worth of business loans in Q1, putting it on pace to surpass the $3B total for all of 2024.
“Shopify Capital is a financing program that offers merchant cash advances and loans to eligible businesses based on the store’s location, history, use and interaction with the Shopify platform,” the company states. It is offered in the US, Australia, Canada, and the UK.
OppFi: Bitty performed well in Q1 2025
May 7, 2025“Our investment in Bitty continued to perform well in the first quarter of 2025,” said OppFi CEO Todd Schwartz during the earnings call. “The business continued to drive accretive profitability and cash flow to OppFi. We continue to see significant imbalance between supply and demand for working capital among small businesses. We are excited to be part of Bitty’s growth ahead.”
OppFi owns a 35% stake in Bitty.
During the Q&A, Schwartz reiterated that Bitty was well-positioned despite the uncertainty surrounding tariffs in the current environment.
NerdWallet Q1: Small Business Loan Originations Down, AI Agents Are Referring Them Business
May 7, 2025Small business loan originations were down for NerdWallet in Q1 “as underwriting remained tight and trade policy uncertainty dampened demand.” This is not a new development at the company as it has been publicizing a similar sentiment for some time.
The biggest takeaways from NerdWallet’s regular reports, however, are how the company, long reliant on organic Google search listings for much of its online traffic, is weathering the transition from the online search-ranking era to the AI answer-agent era. Analysts have been asking NerdWallet CEO Tim Chen to weigh in on what they’re seeing and how it’s going. Now, in this latest quarter, Chen says that AI actually appears to be referring them business so far.
“I think as we think ahead to channels beyond Google search, for example, I’d say top of mind for us is the factors that have historically driven success in areas like Google Search seem to be carrying over to other AI driven search engines. So it’s early days here, but compared to our competitive set, NerdWallet receives a really high share of referral traffic from AI sources. So I think big picture, the way I think about it is AI, at its best, helps you find a great answer quickly without a bunch of effort or spam. And areas with simple answers, AI is gonna meet that user need really well.”
– Tim Chen, CEO, NerdWallet
deBanked independently prompted both Grok-3 and ChatGPT-4o to make recommendations to shop for a small business loan and both recommended Fundera among its top answers. Fundera was acquired by NerdWallet in 2020. ChatGPT-4o put Fundera in its top 2 and Grok-3 put them in its top 3. AI-agents are becoming more memory-based and personalized so this experiment may produce different results for others.
On search rankings specifically, NerdWallet’s Chen said that it had taken a bit of a haircut for them over the past year, in part because even search engines are also now delivering AI-based answers at the top of the results.
AI is permeating so much that the transcript of the earnings call that deBanked relied upon for this writeup was also prepared and published by AI.
Merchant Confidential
May 2, 2025Carl Brabander, EVP of Strategy for IOU Financial, will be speaking at Broker Fair on May 19 in New York City. Brabander will be sharing data and tips on how to build trust and win deals in the small business finance industry.
This is a can’t-miss session for brokers. Registration for the full-day conference ends soon. You can sign up here.
Square Originated $1.59B in Business Loans in Q1
May 2, 2025Square Loans, a subsidiary of Block, originated $1.59B in business loans in Q1, according to the company’s latest earnings report. Despite being the largest online small business lender that deBanked tracks, the company spent most of the quarterly call talking about its new consumer lending product, Cash App Borrow.
Square’s Q1 business loan figures puts them on pace to exceed their total volume in 2024, when they hit $5.7B. The subject of tariffs did not arise on the earnings call at all and Block had an overall positive quarter with $190M in net income.
Enova: SMB Loan Demand and Performance Remains Normal
April 29, 2025Enova originated $1.2B in small business loans in Q1, a 27% increase year-over-year.
Despite noise in the media about economic disruptions, Enova CEO David Fisher said during the earnings call that “We are monitoring both demand and portfolio performance even more closely than normal and continue to see the level of demand we would expect while payment performance remains in line or better than our expectations.”
When asked if the company saw a spike in applications in relation to businesses possibly stocking up on inventory ahead of the new tariff policy, Fisher said they hadn’t seen any spike and that demand has mainly tracked typical seasonal patterns.
The company emphasized more than once that if anything were to change, the quick duration of its small business loans would allow it to react and make adjustments very quickly. As always, Enova reiterated that it does not have much competition in the market, hadn’t seen any new competitive threats in the first quarter, and doesn’t expect to see any changes on the competitive side for the rest of the year.
PayPal’s Business Loan Biz: ‘Looks Pretty Steady Right Now’
April 29, 2025During the Q1 earnings call, PayPal was asked about the state of its business loan and working capital business given the potential disruptions with tariffs and the economy.
“…when you look at just general consumer health, coming into what could be a more uncertain time, is looking pretty healthy and pretty good,” said PayPal CFO Jamie Miller. “And then with respect to SMB, good continued consistent performance there too. And on the merchant lending side, as we monitor that, honestly pretty consistent with what I’d say about consumer charge offs also improving. And obviously we’re monitoring the whole thing very, very carefully, but it looks, looks pretty steady right now.”
Later, an analyst asked the management team: “I’m just wondering if you’ve made any changes to underwriting, or how you would think about changes to underwriting in the face of merchants facing kind of cash flow strains on the back of sort of supply chain dynamics, tariffs specifically, and if you guys have any way of sort of dimensionalizing like what sort of cash flow strains your merchants may experience if tariffs do go into effect in terms of things like importing, importing inventory and things of that nature?”
That yielded this reply from Miller:
“I think it’s difficult to answer the latter part of your question, but if we go back to the merchant lending part of it, this is a portfolio that is actively managed, and it’s something that a year ago when [——] came in and really reconstituted the team, they’re very focused on how we can help our small businesses really navigate growth. And so the portfolio has a couple of different things in it. One is just really helping small businesses with working capital and inventory buy and we monitor that and underwrite it, you know, with an eye towards credit, towards cash flow. And when you look at this, these are things where we’ve got cash sweeps with sales as sales come in. It’s just a very well constructed portfolio from both an underwriting and from a risk management perspective. And the other side of it is PayPal Business Loans, which are cash flow based, they’re typically personally guaranteed. And again, these are things that we monitor, all the different indicators of the portfolio, and we adjust as we go. I mean we did make some adjustments in March to tweak and fine tune and make our underwriting slightly more conservative, but it’s something the team is all over. And I think we can react very quickly in a changing environment.”
Small Business Finance Leads at Broker Fair
April 23, 2025We’ll be talking about small business finance leads on May 19th in NYC at Broker Fair 2025. Come attend this session and many more on top of great networking, food & beverages, etc. This is the industry’s largest annual conference in NYC.
