Articles by deBanked Staff
The MCA of the Major Leagues
February 20, 2021
It’s been said a million times. It’s not a loan. The seller receives an upfront payment in exchange for an agreed upon percentage of future earnings. If there’s no earnings, then nothing is owed.
No, it’s not a merchant cash advance, it’s a big league advance, a deal offered by a company named just that, Big League Advance (BLA) to baseball players.
“Players receive an upfront investment from Big League Advance in exchange for an agreed upon percentage of their future Major League earnings,” the BLA website says. “If the player never makes it to the Major Leagues, the player will never owe or pay any money back to Big League Advance.”
The company was founded in 2016 and recently made the news because of its success with Padres player Fernando Tatís Jr. Tatís recently signed a 14 year contract with the team worth $340 million, the third highest in history. And now BLA stands to get their cut, potentially as much as $30 million, according to the WSJ.
The BLA website explains it as such:
Players choose what percentage of their future career earnings they want to give Big League Advance. For example, Big League Advance may offer a player $50,000 for every 1% of his future professional earnings. If a player wanted to sign a deal for 5%, he would receive $250,000, or if he wanted to sign a deal for 10%, he would receive $500,000. While our offer amounts are non-negotiable, the percentage the player would like to give up is up to the player.
The average deal is for 8% and the underwriting performed is a combination of the players’ background, scouting, and statistics.
Michael Schwimer, a former Major League pitcher, is the founder and CEO. The WSJ says that the company has made advances to 350 players for a combined $150 million.
BlueVine’s CEO on Latest Round of PPP
February 10, 2021BlueVine CEO Eyal Lifshitz took to twitter last night to update customers on the status of this PPP round. Word from around the industry has suggested that approvals have been slower and that in certain situations, additional documentation is being asked for because of the SBA’s heightened scrutiny.
Below is Lifshitz’s consolidated twitter thread.
As a third-generation entrepreneur, my decision to build BlueVine was personal—I believe in and have dedicated myself to small businesses. To the customers reaching out for Paycheck Protection Program support, know that I’ve read your messages and want to update you directly.
When the latest Paycheck Protection Program was announced, we knew we had to step up again and help small businesses. Though the cause was close to our mission, we had to refocus our business completely. If you feel this program has been slower, it has. But for good reasons.
Waiting is frustrating, especially if these funds will make or break your business. There are explanations for the longer wait times, which can actually mean GOOD news for your business. Let me break this down.
The SBA’s program changes were significant, adding Second Draws and other improvements. Every change requires an additional product build and support team training, ensuring we’re compliant and provide the most efficient and effective application process.
The program’s adjustments include serving the hardest-hit businesses (and not large well-known companies). This extra due-diligence means additional documentation and information for us to review. It also means that smaller businesses may have a greater share of the funds.
The previous PPP round was impacted by some fraudulent actors. To prevent funds from getting in the wrong hands, the SBA added more robust requirements. While this added protection is more work and slows things down, it ensures funding remains for those that need it most.
We know the process of reviewing and approving PPP loans was slow at first, but we wanted to ensure we got it right before automating. Since we started, our throughput has more than tripled. If you’re in review, be patient. We haven’t forgotten about you!
I want to emphasize that BlueVine, and me personally, are committed to serving small businesses. We’ve more than doubled our customer support team to better assist you during what I can only imagine has been a brutal year. We see you and are doing everything we can to help.
StreetShares Discontinues Veteran Business Bonds
February 3, 2021StreetShares, the former online lender that pivoted to Lending-as-a-Service in October, is no long offering its veteran business bond program as a result.
A note on its website says:
“Thank you Veteran Business Bond investors! We have achieved our Bond funding needs. As a result, we have discontinued our offering of Veteran Business Bonds. New Bonds are no longer available for purchase or investment. Your current Bonds continue to earn 5% annual interest. Investors are able to log in to access their accounts.“
An Amazon Capital Lending Loan
February 2, 2021Amazon’s small business lending business is no small operation. deBanked recently viewed a loan agreement between Amazon Lending and an Amazon seller in which the seller received a loan of $300,000 at an annual interest rate of 15.99%.
In 2019, we estimated that the company had originated $1.5B in small business loans, placing them in the #5 slot on our list, but the company is possibly on track to be #1.
Outgoing President Trump Extends Clemency to Jonathan Braun
January 20, 2021
President Trump issued an executive grant of clemency to Jonathan Braun on Tuesday, commuting his sentence to time served. Braun checked into FCI Otisville last year to continue serving a sentence for a marijuana-related conviction in 2011.
The executive order requests that he be released as fast as possible.
A statement from the White House said that “upon his release, Mr. Braun will seek employment to support his wife and children.”
Transcript and Recording of Major FTC Case Before the US Supreme Court
January 14, 2021Oral arguments took place yesterday in AMG Capital Management, LLC et al. v Federal Trade Commission before the United States Supreme Court. At issue is the debate over whether or not the FTC has the authority to force defendants to disgorge with “illegally obtained” funds when a lawsuit is brought under Section 13(b) of the FTC Act.
Transcript here
MP3 Recording Here
FTC Commissioner Rohit Chopra had reportedly told NBC News last April that he was looking for a systemic solution that would “wipe out” predatory lenders. If the Supreme Court rules against the FTC in this case, that plan could be stymied.
Additional OnDeck Employees Set Their Sights Elsewhere
January 4, 2021On New Year’s Day, OnDeck Head of Business Development Kevin Chin announced he was parting ways with the company and joining Avant. “As we wrap up 2020,” Chin posted on LinkedIn, “I wanted to take a moment to thank all of my colleague at OnDeck as well as Noah Breslow and Cory Campfer for building such an outstanding company with great people and culture.”
Similarly, Matt Cluney, who was VP of Brand and Product Marketing at OnDeck, announced that he was leaving to become Chief Marketing Officer for Yardline Capital. On LinkedIn, he wrote: “New year, new adventures… excited to join Ari Horowitz, Tomo Matsuo, Seth Broman and the rest of the team at Yardline Capital at a time when ecommerce is booming and the opportunity to provide a differentiated growth capital solution for ecommerce sellers is big!” Cluney will be in good company at Yardline with another OnDeck veteran Dennis Chin.
SRS Capital Enters Chapter 7 Bankruptcy
January 4, 2021SRS Capital, a merchant cash advance company based in Long Island, NY, has entered Chapter 7 bankruptcy, according to court documents obtained by deBanked. In September, several of the company’s creditors petitioned for involuntary bankruptcy. Although it was contested by SRS, the Court granted relief under the Code and appointed a trustee.
The primary entity is listed as SRS Capital Funds, Inc.
The company had revenues of $1.5 million in 2020.
The proceedings are ongoing. SRS Capital’s website is presently offline.
