Articles by deBanked Staff
Independent Community Bankers Express Doubt PPP Can Be Rolled Out As Is
April 2, 2020Update: The interest rate has increased to 1%.
The nation’s voice for community banks, the Independent Community Bankers of America, penned a letter to Treasury Secretary Mnuchin and SBA Administrator Carranza yesterday to urge them to make immediate changes to the planned PPP program slated to be rolled out tomorrow.
“We strongly recommend that you make changes to the guidelines before the Program goes live so that it will work as intended by Congress,” the letter states.
It goes on to explain that the proposed .5% interest rate is below the break-even cost for a bank and should be raised to 4% to allow them to break even. Further, that the loan terms of 2 years should be extended to 10 years to alleviate the hardship the short duration will create for small businesses, and that the restrictions on the use of the loan proceeds be amended.
The ICBA also expressed frustration with the lack of detail afforded to documentation required as well as to the uncertainty of how and when the SBA will reimburse them for losses.
Lists of States Where Non-Essential Businesses Have Been Ordered to Close
March 24, 2020Make sure you know about individual state orders that could affect a small business’s ability to operate. Below is a list of states and regions that have ordered some or all non-essential businesses to close. This list may be incomplete and the details of each state’s orders could change and may have changed since this was posted. Do you own due diligence:
- Alabama – Jefferson County
- California
- Colorado – Must reduce workforce by 50%
- Connecticut
- Delaware
- Florida – multiple counties
- Georgia – bars and restaurants
- Hawaii – Maui and Honolulu
- Idaho – Blaine County
- Illinois
- Indiana
- Kansas – multiple counties
- Kentucky
- Louisiana
- Maine – Bars and restaurants
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi – Certain cities
- Missouri – Certain areas in and around Kansas City
- Montana
- Nevada
- New Jersey
- New Mexico
- New York
- North Carolina
- Ohio
- Oregon
- Pennsylvania
- Rhode Island
- Tennessee – Multiple cities and counties
- Texas – Multiple cities and counties
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming – Multiple counties
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.
