Articles by deBanked Staff
OnDeck Proving to be Extremely Valuable Acquisition for Enova
April 30, 2021
When Enova acquired OnDeck, it thought that the company’s legacy portfolio would have very little value. Now that the dust has settled, it’s become a gold mine. “We now expect to receive over $200 million of total cash from the acquired portfolio, net of securitization repayments,” said Enova CEO David Fisher in the company’s quarterly earnings call.
Enova reported that small business lending was now more than 50% of their portfolio and that they recorded originations of $322 million in small business funding in Q1.
“From an operational perspective, the integration of OnDeck is largely complete,” Fisher added. “Our three SMB products are working together as a single business, and we are on track to deliver more than the forecasted $50 million of annual cost synergies, primarily from eliminated duplicative resources as well as $15 million in run rate net revenue synergies.”
OnDeck’s lending business has also allowed the company to price a $300 million securitization debt facility, backed by OnDeck term loans and lines of credit.
“We’re pleased to report a record first quarter of profitability, driven by solid credit performance, improving originations, and disciplined expense management,” said Fisher. “We are encouraged by the recent signs of a recovery in demand and believe that our diverse product offerings, nimble machine-learning-powered credit risk management capabilities, and solid balance sheet position us well to profitably accelerate growth as the economy continues to recover.”
BFS Capital is Now Nuula
April 29, 2021
“The reimagined future of BFS starts now, and today I’m proud to announce that BFS Capital has become Nuula,” wrote BFS Capital CEO Mark Ruddock on LinkedIn. In a lengthy post, he explained that the company has shifted its “philosophy from solely selling loans acquired primarily from brokers, to providing a more holistic, customer-centric mobile app that entrepreneurs would find useful each and every day.”
“Nuula is a mobile application that gives small business owners instant access to critical business metrics anytime, anywhere.
It allows real-time monitoring of cash flow, personal and business credit activity, and social ratings and reviews. Small business owners know immediately if there’s an issue with their cash, credit, or reputation that requires action.
But this is just the beginning.”
“With regards to our legacy business, our team will continue to support our existing customers and partners as we transition all our services to Nuula,” he added. “Our existing customers will be the first to be offered a chance to experience Nuula. And over the next few weeks, our existing working capital customers will be able to unlock additional capital from the first of our Nuula ecosystem partners, with exciting incentives and in a way that is as seamless as possible. We expect to make that announcement soon.”
You can read the full post here.
American Express Has Begun Rolling Out the Kabbage Platform
April 28, 2021Kabbage was hardly featured in American Express’s Q1 earnings report but the recently acquired company was raised in the official call.
Kabbage is an example of how American Express plans to deepen their relationships with current customers and attract new ones by offering a range of solutions beyond the card, said company CEO Steve Squeri. “And in Q1, we began the rollout of the Kabbage platform, which includes a business checking account and working capital solutions to our small-business customers.”
Squeri also said that Kabbage will play a specific role in their post-pandemic plans.
“And you know, as we’ve talked about travel coming back, it comes back in layers. It comes back with consumer, then it’s SMB, and then it’s lodging, corporate. So it is a very different business, which is why we went and acquired Kabbage to have a digital front for these SMEs where they can not only get their card spending done but also get working capital loans, have a transaction bank account, have a merchant financing loan, have short-term loans, and things like that.”
Senators Marco Rubio, Sherrod Brown Renew Campaign to Ban COJs Nationwide
April 15, 2021
The Small Business Lending Fairness Act is back. Senators Marco Rubio and Sherrod Brown reintroduced a bill this week that failed to advance the two previous times it was introduced.
One of cornerstone objectives is to outlaw confessions of judgment from being used in business loan transactions nationwide.
“With this bill, we are taking another step toward protecting America’s small businesses—the foundation of our economy—by preserving the right of a business to be heard in a court of law before a potential credit default,” Rubio said. “I remain committed to protecting our small businesses from predatory, out-of-state lenders, and I urge my colleagues to join me in this effort.”
“When we let financial predators harm hardworking Americans through scams like confessions of judgment, we undermine the dignity of work,” Brown said. “This bipartisan bill would protect consumers and small business owners from predatory lenders that use legal tricks to strip away their hard earned money.”
This is not the first swipe at COJs. In 2019, New York passed a law that made it illegal to file a confession of judgment against a non-New York debtor in the New York state court system. However, this does not prevent a party from using another state’s COJ and filing the COJ in that respective state.
The federal bill was previously introduced in 2018 and 2019 and failed to advance both times. The text of the bill can be found here.
IOU Financial Funded $12.1M in March
April 8, 2021
IOU Financial originated $12.1M in funding to small businesses last month, the company revealed. It was IOU’s biggest loan volume month since the beginning of the pandemic.
The figure was included in an announcement regarding the company’s intention to repurchase up to $2M of Convertible Debentures.
“The move to repurchase corporate debt comes after a year of strategic initiatives as part of IOU’s Pandemic Resilience Plan that focused on reducing corporate expenses while reaffirming commitments from its diverse portfolio of funding sources and capitalizing on new opportunities to continue to support small businesses in 2020,” IOU said.
“IOU’s response to the COVID-19 pandemic in 2020 (‘Pandemic Resilience Plan’) put the Company in a position of strength to consolidate its stake in developing the opportunities ahead,” said Phil Marleau, CEO. “We are proud to be able to stand with our network of brokers and small business owners as we prepare for the economic recovery with great optimism.”
Before the pandemic, IOU originated $154M in funding for all of 2019.
Implementation of New York’s Commercial Financing Disclosure Law Delayed
April 6, 2021The implementation of New York’s commercial financing disclosure law has been pushed back. Originally scheduled to go into effect in June of 2021, an amending bill changed the date to January 1, 2022.
The only other material change of note is that the exemption from the law for transactions greater than $500,000 has been increased to $2.5 million.
Tune in Today Live: debanked.com/tv
March 31, 2021Update: The recording is here
deBanked will be streaming live today at approximately 12:15 with special guest Jennie Villano of NewCo Capital Group. She will be joined by host Sean Murray in the studio. This is not a Zoom or virtual discussion. There is no need to register. Anyone can tune in free at debanked.com/tv or debanked.tv
Merchant Cash Advance Facebook Group Hits 1,000 Members
March 26, 2021
The Merchant Cash Advance facebook group, a community created and administered by deBanked, has reached 1,000 members. The social media group is a popular place for those in the non-bank business finance community to engage with each other online.
“We’re seeing an uptick in collaborative business development, especially among smaller brokerage organizations and those who work independently on their own,” deBanked President Sean Murray said. “A lot of ideas, motivation, referrals, and deal-making is being conducted online, more-so than before because of the 2020 lockdowns where in-person collaboration slowed to a crawl.”
Separately, deBanked shares common ownership with DailyFunder, the largest b2b finance community on the web.
“We actually witnessed a very insightful trend on DailyFunder,” Murray said. “Approximately 7.5% of the active membership that existed on March of 2020, had left their jobs or closed their business by March of 2021. It sounds troublesome on its face except that we added more members than we lost in that timeframe. More people came in than left, a net increase. I think the data is pointing to the future being very strong!”
