Articles by deBanked Staff
New Jersey Tries Again With a Small Business Finance Disclosure Bill
January 26, 2020
For the third year in a row, New Jersey has a small business finance disclosure bill on the table. S233 is the latest iteration of S2262 from prior years.
Introduced by State Senator Troy Singleton, the proposed law would impose disclosures on loans, factoring, and merchant cash advances on transactions less than $500,000.
In addition to APR requirements, brokers who arrange such financing would be required to disclose their fee to prospective applicants separately from the financing contract and prior to the consummation of the transaction.
Singleton is a Democrat. The Democrats in New Jersey control the Senate, Assembly, and Governor’s office.
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Declined For Funding? Lack of Time in Business Beats Out Lack of Credit Worthiness
January 20, 2020
A study conducted by Square Capital and the Stevens Center for Innovation in Finance at the Wharton School at the University of Pennsylvania, pulled back the curtain on small businesses and the financing process.
Notably, the #1 reason that businesses said they had been declined for funding (regardless of the source) wasn’t credit, it was that they hadn’t been in business long enough.
#2 was (ironically) a lack of cash in the bank.
#3 was insufficient collateral.
Personal credit worthiness and business credit worthiness ranked #4 and #6 respectively.
These findings were one of many in the report published by Square last week. Among other key details were that healthcare & fitness businesses were the most likely to receive all the funding they sought whereas leisure & entertainment businesses were the least likely to receive all the funding they sought.
Black/African American business owners were more likely to apply for financing in the last 12 months than any other ethnic/racial group. A chart in the report shows that they were more than twice as likely to apply to an online lender or credit union than white business owners.
Former 1 Global Capital CFO Alan Heide Sentenced to 5 Years in Prison
January 17, 2020Alan Heide, the former CFO of defunct Hallandale Beach-based 1 Global Capital, was sentenced to 5 years in prison earlier this week for his role in the company’s securities fraud. He is one of three individuals that have pled guilty so far and the first to be sentenced.
The other individuals, attorney Jan Douglas Atlas and former 1 Global COO Steven Allen Schwartz are awaiting their sentencing.
Additional individuals are still expected to be charged.
Nav Co-founders Step Down From C-Level Positions
January 14, 2020
Levi King, a co-founder of Nav Inc., resigned as the company’s CEO on Tuesday. In a two-part explanation on LinkedIn, King wrote. “To be clear, I’m not burned out on Nav. I’m not aspiring to do something elsewhere, and I’m not leaving the company. I’m still dedicated and passionate about helping Nav succeed. And, I will – just in a different capacity moving forward.”
King will do that by serving as the executive chairman of the board of directors. President & COO Greg Ott will take over as CEO.
On LinkedIn, King further wrote that the company needs “a more qualified leader” to take Nav to the next level after he and co-founder Caton Hanson have successfully grown the company to the right point.
Hanson, who served as the company’s Chief Legal & Compliance Officer, also stepped down and updated his job role with Nav to that of being “Of Counsel” on a part-time basis. Unlike King’s message on LinkedIn, Hanson’s reads as a farewell.
“Thank you for believing in me and our dream,” he wrote. “Thank you for your part in helping Nav achieve what some have called ‘impossible’. I am grateful to know you, have had the opportunity to work alongside you and to call you friends (and for many of you — co-owners). I look forward to Nav’s next chapter – and mine.”
Greg Ott, the new leader of the company, is said in a Nav press announcement to have served as a strategic and organizational leader in both startups and Fortune 1000 corporations. Prior to joining Nav, Ott served as Vice President of Marketing for Intuit QuickBooks.
“Nav’s founders created a company that is truly unique in its ability to revolutionize how small business owners navigate and access capital to grow their business,” Ott commented. “I look forward to building upon Nav’s successes and furthering the company’s vision of aligning financing qualifications, predicting needs, and facilitating transactions between data providers, lenders, partners and small businesses.”
New Jersey Firms Up Its Confession of Judgment Bill
January 13, 2020The New Jersey State legislature strengthened its Confession of Judgment (COJ) bill last week by adding language that grants the Attorney General power to enforce monetary penalties against violators.
S3581 would prohibit any provider of business financing from extending financing with a COJ. Business financing is defined as a loan, line of credit, cash advance, factoring, or asset-based transaction for a business purpose.
The bill still needs to pass the Senate and Assembly and be signed off by the Governor in order to become law. The bill’s sponsor, Senator Troy Singleton, is a Democrat, increasing the likelihood that the Democrat-controlled legislature and Democrat Governor Phil Murphy will move it forward.
SEC, US Attorney Charge Steven A. Schwartz in 1 Global Capital Case
January 6, 2020
New criminal and civil charges have been filed against an individual in the 1 Global Capital case. This time it’s Steven A. Schwartz, who served as 1 Global’s Director and Chief Operating Officer.
The SEC alleges that Schwartz aided and abetted former CEO Carl Ruderman in carrying out a securities fraud.
The US Attorney for the Southern District of Florida separately alleged that Schwartz engaged in a conspiracy to commit wire fraud and securities fraud.
Schwartz is the third person to be charged criminally in connection with 1 Global Capital’s scheme. Alan Heide and Jan Atlas already pled guilty to their roles in the fraud.
The SEC said of its case against Schwartz:
The complaint further alleges that Schwartz became trustee of a Ruderman family trust in June 2014, and that shortly afterwards, Ruderman had Schwartz execute an agreement conveying ownership of 1 Global to the trust. As alleged, until 1 Global declared bankruptcy in July 2018, Schwartz allowed Ruderman to use the trust to misappropriate several million dollars in investor funds to pay for Ruderman’s luxury lifestyle.
United Capital Source Placed $199M In Deals In 2019
January 5, 2020
United Capital Source, a commercial finance brokerage based in New York, placed 3,883 deals in 2019 for a grand funding total of $199.3 million. Company CEO Jared Weitz said on LinkedIn of the milestone, “Our employees all saw growth (again) this year both professionally and personally. As we come into 2020 we are going into our 10th year of business!!!!! I cannot wait to see what these next year(s) hold for us. I’m so thankful for our Funding Partners and most of all our wonderful staff.”
Weitz is scheduled to speak at deBanked CONNECT MIAMI on January 16th at the Loews Hotel on a panel discussion about how to make money in 2020.
