Articles by deBanked Staff

Online Small Business Borrowing Decisions Not Driven By Costs or Disclosures, Fed Study Finds

December 23, 2019

A new study on transparency conducted by the Federal Reserve on non-bank small business finance providers indicates that borrowers are not driven by costs or disclosures. The #1 reason for a business to apply with an online lender was the speed of the process, the study showed. #2 was the likelihood of being funded. Cost ranked near the bottom of the list.

While a focus group pointed out many areas that are ripe for improvement, the Fed was left to conclude that “clearer information—in the form of standardized disclosures—will not necessarily alter the decisions of some small business borrowers about whether and where to obtain financing.”

The Fed further commented that some loan applicants revealed that they had already “committed the expected loan proceeds” before a lender could even present rates and terms. Others borrowers wished they could know their approved rate and terms before even providing a lender with any data. These findings seem to undermine the potential value of enhanced uniformity in disclosures.

The report, which attempts to paint a bleak picture of online lending in spite of the data, seems to validate what online lenders have been saying all along, that speed is supreme. Even where transparency is lacking, it cannot be overstated that big banks scored lower on transparency than online lenders did.

Uncertain Terms: What Small Business Borrowers Find When Browsing Online Lender Websites evaluated BFS Capital, CAN Capital, Credibly, Fundation, Funding Circle, Kabbage, Lending Club, National Funding, OnDeck, Rapid Finance, PayPal Working Capital, and Square Capital.

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December 19, 2019

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Sentencings in 1 Global Capital Criminal Cases Delayed

December 18, 2019

Article by: deBanked Staff

The sentencing dates for the two individuals that pled guilty for their part in the the 1 Global Capital mess, have been delayed. Jan Douglas Atlas’s sentencing has been pushed back until March 2020 with a date to be determined, while Alan Heide’s has been rescheduled to Jan 14, 2020.

New Jersey is Propelling its Own Confession of Judgment Bill

December 12, 2019

Article by: deBanked Staff

The New Jersey legislature has climbed aboard the Confession of Judgment restriction train. On Thursday, the state’s Senate Commerce Committee advanced S3581, a bill that would prohibit the use of COJs in a “business financing” contract with a New Jersey debtor. The bill was introduced in March but had not experienced movement until today.

New Jersey’s COJ bill is similar to the bill advancing through the House of Representatives at the federal level. Meanwhile, New York’s legislature had also proposed a near-identical bill but it did not pass. Instead, New York passed a law that prohibits entering a judgment by confession in New York’s courts against a non-New York debtor.

The New Jersey bill passed through the committee without any debate. The Committee chair said on the record, however, that the New Jersey Credit Union League, an advocacy group for credit unions, was in favor of the bill.

Investors Receive Recovery Checks in 1 Global Capital Case

December 9, 2019

Article by: deBanked Staff

For all the noise surrounding the collapse of 1 Global Capital, investors recently recovered nearly $112 million, equating to about 40 cents on the dollar so far.

“We continue to pursue collections where we can and legal actions where we can, and we’re working to see what else we can garner for the estate,” 1 Global’s trustee told the SunSentinel.

The sizable recovery thus far could probably be attributed to the large outstanding A/R the company had on its books. Although prosecutors have characterized 1 Global as a ponzi scheme, the company did legitimately engage in the business it claimed to and it had amassed a massive portfolio of receivables. 1 Global also still had a significant amount of cash on hand when it declared bankruptcy last year, a move it undertook mainly because parallel investigations from the SEC and US Attorney’s office had become paralyzing.

Approximately 3,750 investors have been paid out.

Michael Bloomberg Says Democrats Off Limits From Investigations

December 7, 2019

Article by: deBanked Staff

Suspect Bloomberg News might have a bias or an agenda? On Friday, Michael Bloomberg, whose company owns Bloomberg News, told CBS news that his reporters were restricted from investigating Democratic candidates while he runs for President.

“We just have to learn to live with some things. [The reporters] get a paycheck. But with your paycheck comes some restrictions and responsibilities.”

CNN reported that inside the company reporters are frustrated by how difficult this will make their jobs.

Bloomberg is an influential player in politics.

As previously reported by deBanked last year, Bloomberg Senior Editor Robert Friedman thanked a state senator from New York on twitter for proposing legislation in response to a story he oversaw in 2018. When deBanked pointed it out, Friedman quickly deleted the tweet. The democrat-led legislature then went on to pass a law that relied almost entirely on the Bloomberg news story. That law was the restriction of entering Confessions of Judgment in New York against out-of-state debtors.

National Funding CEO David Gilbert Caddied For Tiger Woods For a Day

December 6, 2019

Article by: deBanked Staff

David Gilbert, the CEO of National Funding, had the honor of caddying for Tiger Woods on Wednesday at the Hero World Challenge pro-am in the Bahamas. Gilbert earned the opportunity by being a very generous participant in a Woods charity event held earlier this year. The proceeds went to the TGR Foundation. Gilbert told deBanked that National Funding has been supporting the organization for years.

You can watch the video highlights of the two of them below:

Ever dreamed of caddying for @TigerWoods? One man got that chance earlier this week. pic.twitter.com/lFWomIqN7q

— GOLFTV (@GOLFTV) December 5, 2019

Hedge Fund Billionaire With Fintech Focus is Buying The New York Mets

December 4, 2019

Article by: deBanked Staff

Steve Cohen, the hedge fund billionaire behind Point72 Asset Management, is reportedly buying a majority stake in the New York Mets.

After a long infamous run at the helm of S.A.C. Capital Advisors, Cohen founded Point72 and with it, an early-stage venture capital fund that focuses on areas like fintech and artificial intelligence. Among the many investments the fund has already made have been in Nav and Acorns.

Nav, you may already know, has made a big name for themselves in the small business lending industry.

Point72 invested in Nav alongside Goldman Sachs in a $38M Series B round in 2017. At the time, Nav CEO Levi King told deBanked that “[Point72 is] a smart advisor for us from a data perspective – a quant hedge fund that’s best in class on data. We get free advice along the way. That’s part of the deal.”

Nav went on to raise even more money earlier this year from Point72 in a Series C round that was joined by Experian Ventures, Aries, and CreditEase Fintech Investment Fund.

Meanwhile, Acorns, another major Point72 investment, is the only micro-investing account that allows consumers to “invest” their spare change into ETFs. The company has signed up more than 4.5 million users to-date.

More recently, however, Point72 jumped into the small business lending market in Mexico via a collaborative $42M Series B investment with Goldman Sachs into Credijusto. Credijusto has already originated $90 million in loans and equipment leases to small businesses. The loans range in size from $20,000 to $500,000.

All of which to say is that even if the Mets do not improve anytime soon, they at least could very well find themselves at the forefont of financial technology in Major League Baseball.