Articles by deBanked Staff
Where Fintech Ranks on the Inc 5000 List for 2020
August 12, 2020Here’s where fintech and online lending rank on the Inc 5000 list for 2020:
| Ranking | Company Name | Growth |
| 30 | Ocrolus | 7,919% |
| 46 | Yieldstreet | 6,103% |
| 351 | Direct Funding Now | 1,297% |
| 402 | GROUNDFLOOR | 1,141% |
| 486 | LoanPaymentPro | 946% |
| 534 | LendingPoint | 862% |
| 539 | OppLoans | 860% |
| 566 | dv01 | 830% |
| 647 | Fund That Flip | 724% |
| 1031 | Fundera | 449% |
| 1035 | Nav | 447% |
| 1053 | Fundrise | 442% |
| 1103 | Bitcoin Depot | 409% |
| 1229 | Smart Business Funding | 365% |
| 1282 | Global Lending Services | 349% |
| 1360 | CommonBond | 327% |
| 1392 | Forward Financing | 319% |
| 1398 | Fundation Group | 318% |
| 1502 | Fountainhead Commercial Capital | 293% |
| 1736 | Seek Capital | 246% |
| 1746 | PIRS Capital | 244% |
| 1776 | Braviant Holdings | 240% |
| 1933 | Choice Merchant Solutions | 218% |
| 2001 | Fundomate | 212% |
| 2257 | Lighter Capital | 185% |
| 2466 | Bankers Healthcare Group | 167% |
| 2501 | Fund&Grow | 165% |
| 2537 | Central Diligence Group | 162% |
| 2761 | Lendtek | 145% |
| 3062 | Shore Funding Solutions | 127% |
| 3400 | Biz2Credit | 110% |
| 3575 | National Funding | 103% |
| 4344 | Yalber & Got Capital | 76% |
| 4509 | Expansion Capital Group | 70% |
LendingClub’s Loan Originations Dropped By 90% in Q2
August 4, 2020LendingClub’s Q2 financials revealed that the company loaned $325.8M for the quarter, down 90% year-over-year. The company also recorded a net loss of $78.5M.
“In the current challenging environment, we have remained focused on the things we can control and are successfully executing against our strategic priorities,” CEO Scott Sanborn commented. “We are pleased with our ability to maintain strong levels of liquidity, are encouraged by the payment behavior of our members and the resilience of the loan portfolio and remain focused on the acquisition of Radius Bank.”
The company had $338M in the bank at quarter-end, up from the $244M in the bank at year-end 2019.
Square Capital Resumes Business Lending
August 4, 2020
Square Capital, the small business lending division of Square, resumed offers for its “core flex loans” in late July, the company announced. However, there will be “stricter eligibility criteria.”
Square Capital made no core flex loans in Q2, having paused in mid-March on news of the impending crisis.
The company pivoted to PPP lending in Q2 in the interim and through this program managed to fund over 80,000 small businesses for a grand total of $873 million. The average came out to approximately $11,000 per loan.
Square says that in PPP they “expanded awareness of Square Capital as 60% of [their] PPP borrowers had never before received a loan through Square.”
Loss rates during Q2 were about 2.5x prev-COVID levels, a range they accurately predicted might happen at the end of Q1.
Par Funding Files Strong Response to SEC’s TRO After “Lockout”
August 4, 2020
Par Funding’s attorneys at Fox Rothschild filed a strong response with the Court over the apparent actions taken by the Receiver to lock out its employees and suspend ACH debits, the docket shows.
“On the afternoon of July 28, the SEC advised that Mr. Stumphauzer (the appointed receiver) would cause the immediate dismissal of all the employees of the businesses and that no employees of the business would be permitted to enter the premises – leading to over 100 employees being barred from the business premises for the last week despite the fact that thousands of merchants around the country rely on ongoing communication with CBSG to ensure the ongoing viability of their business operations.”
It continues…
“To date, not a dollar has been taken in by the Receiver to pay investors, and they have not been paid. The Receiver’s and SEC’s actions are ruining a business with excellent fundamentals and a strong financial base and essentially putting it into an ineffective liquidation causing huge financial losses. In taking this course of action against a fully operational business, the key fact that has been lost by the SEC, is that their actions are going to unilaterally lead to massive investor defaults.”
You can view the entire argument here.
Par’s attorneys are expected to file a more comprehensive opposition by the end of the week.
deBanked did not reach out to any party for comment given the unlikelihood that any would be shared on pending litigation.
Did Sealed Case Get Leaked on Bloomberg News Site?
August 4, 2020
A series of Bloomberg News stories in 2018 appear to have put a handful of companies in the cross-hairs of regulators, recent legal filings indicate, and Bloomberg is enjoying unusual status in the saga.
One example is the copy of a federal lawsuit brought by the SEC that appeared on Bloomberglaw.com on Monday, July 27th. A summary of the lawsuit and the full 58-page complaint were broadcast through the Bloomberg-branded website in Google News and were quickly picked up by industry observers who pointed out that the complaint referenced an ongoing undercover investigation by law enforcement agencies.
It was an unusual reveal.
Except when deBanked tried to authenticate the documents by attempting to retrieve an original copy through the court system, we were unsuccessful because the entire case was sealed.
The case and an identical copy of the complaint, which Bloomberg had been circulating all week, were finally unsealed on Friday, July 31st. The case number was the only thing different.
The odd sequence of events suggests that Bloomberg Law may have inadvertently blown the lid on a case almost a week before anyone was supposed to know about it, including the defendants. Over the weekend, one defendant was upset that he had not been able to access the docket until the evening of July 31st. That was 4 days after the world had already gotten a glimpse of it.
FTC Commissioner Rohit Chopra on Merchant Cash Advances
August 3, 2020
Following recent lawsuits filed by the FTC, Commissioner Rohit Chopra made the following statements earlier today in an announcement about merchant cash advances:
As the Commission proceeds into litigation in these matters and further studies this market, I hope that we will uncover additional information about business practices in this opaque industry. In particular, we should closely scrutinize the marketing claim that these payday-style products are “flexible,” with payments contingent on the credit card receivables of a small business. In reality, this structure may be a sham, since many of these products require fixed daily payments, and lenders can file “confessions of judgment” upon any slowdown in payments, with no notice or due process for borrowers.
This raises serious questions as to whether these “merchant cash advance” products are actually closed-end installment loans, subject to federal and state protections including anti-discrimination laws, such as the Equal Credit Opportunity Act, and usury caps. The stakes are high for millions of small businesses.
Rapid Finance Resumes Funding
July 29, 2020Rapid Finance is funding again, according to posts made by the company on social media.
“Now that most states are in the process of beginning to function normally, many small businesses are back in operation and we’re excited to announce that we have resumed accepting NEW financing applications!”
Shopify Originates $153M in MCAs and Loans in Q2
July 29, 2020
Shopify had a monster 2nd quarter. The e-commerce giant generated $36M in profit on $714.3M in revenue. As part of that the company originated $153 million worth of loans and merchant cash advances, only slightly down from the $162.4M in Q1. Still that figure was up by 65% year-over-year (and was more than 2x the volume originated by OnDeck).
The company has offered capital to its US merchants since 2016 and recently begun doing the same with its UK and Canadian merchants starting this past March and April respectively, the company revealed.
Shopify CFO Amy Shapero said that company had maintained loss ratios “in line with historical periods,” despite COVID. “Access to capital is even tougher in times like these, which makes it even more important to continue lowering this barrier by making it quick and easy so merchants can focus on growing their business,” Shapero stated.
