Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.
Articles by Sean Murray
‘Like Family’: How Critical Financing Became One of the Fastest Growing ISOs
October 17, 2025When Farmingdale, Long Island-based Critical Financing (CFI) showed up as the 2,671st fastest growing company on the Inc. 5000 list this year, it was a testament to the company’s many years of hard work. Founded in 2017 by its CEO Brandon Garcia, CFI connects small businesses with a variety of unsecured working capital products.
“[Getting that recognition] was great,” said Garcia. “And I think it’s also a testament to the group that we have. It excites the people that work here too. This is a very stressful job, it’s not easy.”
In CFI’s day-to-day, the sales team finds itself competing against multiple companies on almost every deal that comes across their desks. Small businesses regularly put the pressure on them to get the best rate, the fastest funding, or a combination of both. They say this only increases their drive.
“It has definitely helped us in a way,” Garcia said of it. “I mean who doesn’t want a deal that doesn’t have competition, you can kind of take your time with it, right? But I think when there’s urgency, our guys perform better.”
In the very beginning it was just Garcia himself who had worked in the industry since 2012. He was soon after joined by a former colleague, Robert Menzel, and the two set off to really build up a company. That’s easier said than done, especially in a business where trust is paramount. So they looked within their own circle of friends and family to create a solid foundation.
“I felt it was best that we take care of our own,” Garcia said. “Let’s take care of people that we know that are looking for a new opportunity, and we train them the way that we want them to be trained. We want to give that experience and push it over to them.”
Among those they’ve brought on board to their current headcount of sixteen has been Garcia’s own mother, who works as the company’s head processor. And while they are still actively looking to bring on more people, Garcia said that the number of employees isn’t the ultimate metric of success, but rather the abilities of the ones you do have and the relationships they have with everyone else is the key. On this point, CFI is on pace to surpass $100 million in funding this year. It’s because of their continuous progress and results that they finally got the confidence to apply into the Inc. 5000 and were successful in making it.
“To be able to put that Inc. 5000 sticker in your signature, on the website, it just has a different swag to it,” said Garcia’s partner Menzel, “where it just carries a lot of weight, and even the merchants see that.”
When asked if the end goal was to become a lender themselves, both Menzel and Garcia say they’re happy with what they already do now, which is connect the merchants to the most appropriate source.
“While many competitors chase the close, we lead with transparency and real strategy,” Garcia said. “We act as consultants first. Even if a client doesn’t move forward with us, we want them to walk away smarter and more prepared than when they came in.”
“When you are a lender, you don’t really have that close relationship with other lenders because you’re your own lender,” Menzel said. “You’re not talking to them about deals, how to get deals done, ‘what are they doing? What did they change this month compared to what they’ve been doing, what’s working, what’s not.’ I think having those relationships with the lenders and the lenders’ reps, it’s huge and it makes the job fun, because they’re really all great people that we deal with.”
That closeness is what it’s all about for them.
“We are a group of people who genuinely care about each other,” Garcia said. “We’ve celebrated marriages and welcomed new babies. We hang out on weekends, show up for one another, and create a work environment that doesn’t feel transactional.”
The outcome of that are months where the company is exceeding $10 million a month in funding, and they’re now even more fired up after the Inc. 5000 placement.
“You don’t need this massive shop to be successful in this industry,” Garcia reiterated. “It’s really that simple. You just need the right people. You need to be loyal and just really be truthful with everyone. And good things happen. That’s a big thing for us.”
That Fintech Business Loan Performance Should Help You: How Hansa is Giving Both Borrowers and Lenders a Powerful Tool
October 15, 2025“Business owners want to be reported on,” said Henry Magun, founder and CEO of Hansa. “When we do a lot of surveys around this and when we survey small business owners en masse, would they rather borrow from a provider that does report to the business credit bureaus or does not, 85% of business owners say that they would rather borrow from a provider that does report to the business credit bureaus.”
It’s a familiar story: small business borrows from a fintech lender, repays it perfectly, and later on down the road applies for financing elsewhere believing that their previous payment history will support an approval or more favorable terms, only to find out there’s no public record of it at all.
“We hear that all too often,” said Magun. “It’s a very common experience, and that is one of the reasons why we are extremely focused on not only building the back-end pipes to do the furnishment to the bureaus for the lenders and make that process effortless, but also creating a front-end product that makes it a transparent process for the SMBs.”
Hansa, headquartered in New York City, enables lenders to report payment history to the credit bureaus and access existing reports on their customers. The key here is that it’s business credit reporting, not personal. Although most people are familiar with Dun & Bradstreet, Experian and Equifax also have business bureaus specifically for business credit. There’s also consortium-based organizations such as the Small Business Finance Exchange, for example, that take in commercial credit data.
While term loans and cards for SMBs, two rapidly growing products in the fintech space, are their main focus, the Hansa platform can make reporting possible for just about anything.
“We realize that there is such a diversity of product-type in the SMB financing space,” Magun said. “Is it a term loan? Is it a card? Is it an MCA product? You know, are there daily payments, weekly payments, monthly payments? All across the board, we do it all.”
The benefits of reporting business credit are obvious. Lenders can claim that good performance will legitimately build business credit, borrowers benefit from actually building business credit, and lenders can rely on this highly relevant data to drive more informed decisions.
“It’s really about getting the fintech ecosystem towards the future in which companies are focused on supporting financial wellness, and we really view credit furnishment in the SMB space as core to that, ultimately being able to reliably build credit is extremely important for financial mobility, economic mobility because it enables people to [graduate] to bank products and things like that, and being able to take your history with you in order to progress. That’s really important for economic mobility.”
On the flipside, for lenders that have spent years fine-tuning algorithms to predict payment performance outside of traditional credit reports, one area that continues to remain cloaked in obscurity is payment performance with other fintech lenders. Alternative methods, at least within the fintech community, are commonly used to make a best-guess effort, such as employing automated tools to scan an applicant’s bank account deposits with a known list of lender names and then matching them to corresponding bank debits to predict the performance and status of those accounts. But even if one can assess with a high degree of confidence about how those credit lines are performing, it’s not exactly an official affirmation from the lender, and the transaction history might not go far back enough. Besides, these risk assessment methods are entirely personalized to the lender, and don’t necessarily give the business an asset (a universally recognized credit report), that it can furnish elsewhere and benefit from. A business could use a credit report for a trade line or a bank loan or in some other transaction where it could hold weight for them, for example.
“It really is a ‘rising tide raises all ships’ scenario in the sense that in a more mature ecosystem where there’s higher ubiquity of reporting, everyone benefits,” Magun said. “It helps all the funders and creditors on their underwriting processes, and it helps the business owners, the applicants, because it increases the portability of your credit history.”
The usefulness speaks for itself. Hansa, for example, has increased the number of reports that they’re furnishing data on by more than 400x since the beginning of this year. And the lenders can show off to their borrowers what they’re reporting and where it’s being reported to in any manner they wish.
“We’ve started to see really great traction amongst these various players, and we’re really excited to be working with them and it works,” said Magun.
Already they are seeing improved payment rates and increased engagement rates between the borrowers and lenders.
“It’s really powerful,” Magun said, “and SMBs really do care about being able to build their credit.”
How Kaaj is Accelerating Small Business Lending
October 8, 2025Utsav Shah first met Kristen Castell at deBanked CONNECT MIAMI this past February. At the time, Shah and his partner Shivi Sharma were freshly promoting a new AI technology to simplify small business lending. It’s called Kaaj, described as a core intelligence layer that bolts into a lender or broker’s CRM and handles all of the early-stage application intake and underwriting work. Shah had been familiar with the fintech accelerator Castell directs, the Center for Advancing Financial Equity (CAFE), which she was speaking about at the conference, but he had never actually met her in person until then.
“That’s really when we learned deeply about what CAFE’s mission is and how it works with a lot of startups, a very unique mission and very unique approach to work with startups and bring the ecosystem together,” said Sharma. “So we loved it and decided to apply this Fall.”
They applied into the exclusive accelerator program and were one of six companies to be selected, an honor considering hundreds of companies apply for entry on a bi-annual basis. As previously noted on deBanked, it’s an eight-week program, some of which takes place on location at the Fintech Innovation Hub on the University of Delaware campus. The rest is virtual but there are in-person field trips like a recent one to Washington DC, for example. deBanked has sponsored the last three accelerator cohorts which in the most recent cohort includes headline names like JPMorgan, PNC, Discover, Barclays, Capital One, M&T Bank, WSFS BANK, BNY Mellon, Prudential, Fulton Bank, County Bank, Best Egg, United Way, NeighborGood Partners, and the Delaware Bankers Association.
Kaaj, based in San Francisco, was already getting noticed beforehand. The company won the Fintech Meetup Startup Pitch Competition in March and secured a $50,000 prize, for example. Their technology is especially suited for equipment financing companies, MCA providers, small business lenders, SBA lenders, factors, and more.
“So imagine that you’re a lender, and you get hundreds of applications in a day, and you don’t really know where you want to focus your time on,” Shah said to deBanked. “‘What do these 100 deals mean for me, for my business? Are they even qualifying against my criteria, etc.’ So what Kaaj does, it provides very quick intelligence, within the first three minutes.”
Shah explained that as soon as someone submits a package with documents, they get analyzed from top to bottom, like KYC/KYB, the bank statements, and more. This helps lenders (and brokers) decide how to prioritize their time. Utsav’s background in technology has played a major role in building this out as he comes with a decade of AI experience and was building autonomous cars before building Kaaj.
“Time wins deals or time kills deals,” said Shah. “Either way that you want to look at it, if we can give that time back to them, if we can reduce that turnaround time on each individual deal and focus on those higher profitability deals for these companies or these lenders, then they can start really feeding the top line and the bottom line, because they’re not having to hire a bunch of folks.”
Sharma said that equipment finance is slightly more complex than MCA, for example, but that as a $1.4 trillion industry, it’s a market that’s ripe for innovation. Sharma used to work in commercial lending herself and has seen firsthand how manual processes and outdated technology slow things down and hurt not only the lenders but the borrowers in the process.
“I have worked on small business lending, commercial lending, payments fraud, onboarding fraud, a lot of that,” Sharma said. “I spotted a lot of challenges in that space and a clear lack of good technological solutions that really help these lenders scale efficiently.”
Shah, meanwhile, said that ultimately it’s about helping the end-user, the business borrower.
“We are very focused on solving for small businesses, because the final mission of the company is to get better access to capital for small businesses,” he said.
The Great Concession, How the MCA Product Effectively Proved It Was Right All Along
September 26, 2025
There was no greater irony than the State of Texas banning ACH debits from sales-based financing providers at the same time that the State of Washington was celebrating the coming age of sales-based financing. In Texas, for example, the motivation for curbing sales-based financing was built on the premise that “this type of financing has raised significant concerns about predatory lending and that state attorneys general as well as the Federal Trade Commission have obtained high-profile judgments against such financing for predatory practices.” Meanwhile, in Washington, the motivation for the state holding the opposite opinion was that sales-based financing “increases access to capital for small businesses in Washington state, particularly those that have been historically underserved or underbanked.”
How did these states reach the opposite conclusion?
There’s no caveat to how the Washington State program works. The State’s Department of Commerce partnered with Grow America and the operation is backed by a federal grant (SSBCI-21031-0048) to roll out and administer a revenue-based financing program as part of Washington’s State Small Business Credit Initiative. It’s sales-based financing or in this case revenue-based financing (which is the more common phrase these days). Grow America’s revenue-based financing program utters a very familiar phrase in its marketing.
“The months you generate more revenue, you pay a higher amount, when business is slower you pay less,” the company advertises.
This was at one time the signature calling card of a merchant cash advance, but now such features have been repackaged and rebranded into something similar but different, and everybody is doing them.
The Grow America program applies a 20% holdback on adjusted monthly revenue and requires a minimum monthly payment of $1,000 if the 20% holdback does not generate at least $1,000 for the month. Merchants can get approved for anywhere from $50,000 to $1 million. The product is marketed as having a 1.24 factor rate and an estimated 14.27% APR with a 3-year term. As industry participants are aware, increasing sales would translate into increasing payments, which means a rapidly paid off loan could potentially result in a final outcome APR in the triple digits, far and away from the “estimate.”
The irony is that the notable benefits of a similar product, merchant cash advances, which have no minimum monthly payments, no fixed term, and are not absolutely repayable, are eliminated when restructured in this way and presented as “revenue-based financing loans.” Revenue-based financing loans take the underlying structure of MCAs (payments tied to sales) and then strip away the benefits. However, when structured as loans, the argument often goes that they are likely to be cheaper, which may be true on average, but is not always true.
Indeed, Grow America leads specifically with price as for why its product, similar to its privately owned competitors, are the better option:
“There are a lot of online lenders offering revenue-based loans that promise instant approvals, but their terms are intentionally confusing, and the fees are high,” Grow America advertises. “Our lenders aren’t like that. They’re mission driven.”
In Texas, the author of the bill that banned debits from such financing providers “informed the [legislative] committee that commercial sales-based financing has become a popular financing option for small businesses desperate for credit and that, unlike traditional loans, this type of financing is repaid as a percentage of future sales or revenue.”
Indeed, it is very popular. The largest providers or brokers of such financing today whether structured as a purchase or loan, are household names like Amazon, Walmart, Shopify, Intuit, Stripe, DoorDash, PayPal, Square, GoDaddy, Wix, Squarespace and more. Some structure them as a purchase and call it a merchant cash advance and some structure it as a loan and call it revenue-based financing. In either case, payments are tied to the percentage of future sales or revenue.
In egregious cases of wrongdoing one way or another, such incidents have historically been a result of deceptive marketing or payments from a merchant exceeding the contracted amount. In New York, when transactions are structured as a purchase, courts generally look to make sure that the agreements have a reconciliation provision in the agreement, whether the agreement has a finite term, and whether there is any recourse should the merchant declare bankruptcy. Legally speaking, the products have become pretty well defined and understood in the court system.
Like Washington State, GoDaddy, which recently announced its new merchant cash advance program, markets its product in an almost identical fashion.
“If your sales go up, the MCA will be paid sooner; if the sales are slow, it’ll take longer,” GoDaddy says.
Same message.
Washington State requires merchants to make a minimum payment every month and a balloon payment if not fully repaid within 3 years. GoDaddy, by contrast, advertises no minimum payment amount, no set payment schedule, no penalties, and no late fees. One’s a loan, one’s a purchase.
While the best course of action is best left to the merchants, there appears to be a near-universal concession that the underlying nature of how merchant cash advance agreements were contemplated, payments tied to sales, made strong logical business sense all along. Washington State emphasizes this fact.
“We know that your business has its own needs and loans with fixed payment amounts may not be the best option for you,” they advertise. “The revenue-based financing fund offers loans with flexible payback terms so you can grow your business immediately and pay back your loan based on your varying revenue.”
Recent studies also now highlight the benefits of cash-flow-based underwriting.
In Sharpening the Focus: Using Cash-Flow Data to Underwrite Financially Constrained Businesses, “The paper finds that adding cash-flow information substantially increases the predictive signal of models that rely primarily on the business owners’ personal credit scores and firm characteristics.”
There’s also Square, the largest revenue-based financing provider in the US, that has explained why this system just works better. Square says that they can fund more businesses and have higher payment success rates than if they were to follow more conventional methods of underwriting and repayment.
“Square Loans addresses [the credit] gap by using near real-time business data to assess creditworthiness, evaluating metrics such as transaction volume and revenue patterns to offer short-term loans — with repayment on average in 8 months,” Square wrote in a White Paper. “This allows for a more accurate and timely understanding of a business’s capacity to borrow and repay. And loan repayments are higher during periods when business is stronger and reduced when sales are lower.”
What’s the sentiment these days on payments tied to sales revenue? The market has spoken.
Why Lexington Capital Holdings is Expanding Into the Real Estate Business
September 24, 2025Lexington Capital Holdings is expanding beyond small business lending and into real estate, the company recently revealed. Lexington, a Long Island-based financial marketplace and brokerage led by CEO Frankie DiAntonio, is launching Lexington Estates to buy, sell, rehab, and hold properties long term.
According to DiAntonio, deals involving real estate have already been a part of their regular broker product mix for a long time, but when deciding whether or not they wanted to lend against real estate on their own or become the actual buyers and builders, they felt the latter would be more impactful. A syndication fund for these real estate deals, for example, will be open to employees of the firm to participate in. Lexington’s existing operation already has about 50 sales reps. Two from that group will move over to the real estate side to join a number of new hires they’re bringing on board to carry this plan out.
“Business is a team sport and I wouldn’t have been able to do any of this without the amazing Lexington team behind me,” DiAntonio said of the company’s success to-date.
Lexington Estates is already closing on its first property on Long Island. While they will make their focus local right out of the gate, they plan to work on deals both residential and commercial throughout the United States within 12 months. DiAntonio cut his teeth on real estate deals by participating in them personally outside of his business and now he’s making it a corporate endeavor. Whether it’s residential, retail, office space, industrial space, or anything else, they plan to evaluate it on the merits of the potential profits.
“I’m looking for deals,” DiAntonio said. “I’m looking for what’s the best bang for our buck.”
DiAntonio views this ambitious plan as one of absolute necessity given the challenges that the younger generation faces with the cost of living going up.
“I strive so hard to put my people in a position where they can make more money than the average American because you can’t even live the average American life and be average anymore,” DiAntonio said. “You actually have to be great just to live an average American life.”
Lexington Estates plans to officially launch on October 12th.
Is Jack Dorsey Satoshi Nakamoto? I Say Yes
September 20, 2025I’m the originator of the theory that Jack Dorsey is Satoshi Nakamoto, the creator of Bitcoin, which I first considered in February 2024. After extensive research, the theory has now been firmed up with incredible circumstantial evidence. I was the first person to discover that Dorsey was registered on the cypherpunk mailing list under two different email addresses, the first to recover Dorsey’s personal webpage dedicated to cryptography in 1997 (and his home page here), and basically connect all the dots that I compiled in my tweet below:
THE NEWEST WHY JACK DORSEY IS SATOSHI NAKAMOTO
C++ for Bitcoin source code
Now confirmed Jack coded in C++ as far back as mid-90sC in the White Paper
Now confirmed Jack coded in C as far back as mid-90s.Satoshi pseudonym
"Satoshi" was the first tweet Jack's best friend…— Seán Murray (@financeguy74) August 2, 2025
Catching Up With Kalamata
September 18, 2025
Kalamata Capital Group is continuing to fund in Texas through one of its affiliated entities, the company confirms. Kalamata, which recently upsized its 2024 securitization by 25% with notes expandable up to $500 million, offers a variety of funding products to small businesses around the United States. A new law that recently went into effect in Texas has prompted Kalamata and companies like theirs to get the word out to their partners about any applicable adjustments.
More front and center for the company, however, is the introduction and evolution of Kalamata Cash, its in-house proprietary software.
“We went live with everything, including our syndicator profiles and access to the outside world as well, and that’s been a really exciting development for the company,” said Brandon Laks, co-president at Kalamata, “because instead of licensing software, which the software we were on was great before, it gives us the ability to roadmap exactly what we want to do.”
Kalamata, for example, is 100% broker-driven, and they can custom-tailor the process to best suit their relationships.
“Our brokers can come in and see live calculators,” Laks said, “so when they submit a deal and we send an offer, they can get a live view of what steps are outstanding, they can play around with the sliders and choose their offers.”
And there’s a lot more on the horizon that they’re integrating with and adding on.
Guggenheim Securities served as sole structuring advisor and the sole initial purchaser of the notes in the Kalamata securitization deal. At the time of the announcement, Laks said, “The access to additional capital will allow Kalamata to continue supporting Small Businesses and invest more capital in proprietary technology to stay at the forefront of the small business financing industry.”
The Merchant’s Paying, The Bank Statements Were Fraudulent: Talking With MoneyThumb
September 16, 2025Small funders trying to tackle fraudulent submissions with no tools stand almost no chance in today’s environment. A recent survey conducted by both MoneyThumb and deBanked, for example, found that small funders experience fraud in 11.8% of applications on average, more than double the rate of larger funders. In the past, detecting altered documents such as bank statements, was best managed by experienced underwriters, but now with technology and AI in the palm of everyone’s hands, today’s fraud is often imperceptible to the naked eye.
“If you go back to 2020 when we created this [Thumbprint technology], I would say about 80 to 85% of bank statements that were fraudulent we would look at and say, ‘there’s the fraud,'” said Ryan Campbell, CEO of MoneyThumb. “Now it’s sub-5% that I can identify just with the human eye, and so technology has just absolutely created an environment where people can create fraud in a way that they never could.”
Thumbprint is MoneyThumb’s patented fraud detection tool. It can bolt into any industry CRM. Historically, an immediate default was the first clue that a fraudulent app had slipped through the cracks, but even accounts in good standing may not be what they seem.
“[What] we’ve seen is people take a smaller loan, then a slightly larger loan, and then the big one, the third loan—default,” said Campbell.
Bank statements that are otherwise in perfect order may have had their transaction descriptions edited so that loan deposits from third parties look like revenue or round-trip payments with the owner’s personal account are reclassified to look like daily sales. For fraud like this, the numbers are real, the statements are real, but what’s revenue and not revenue is obfuscated. And when the deal is approved based on the misleading metrics the scammers can actually stick around to pay for a while to convince the underwriters that they’re worthy of more.
“We’ve run quite a few portfolio analyses for our funders, and so we’ll review all of the statements that they have, all of the funded deals that they’ve done, and many are surprised to find out that they actually have fraudulent paying accounts on their books,” Campbell said.
Since the rate of fraudulent applications is so material, catching the fraud as early as possible is paramount. This saves cost on underwriting, reduces time spent on deals that won’t move forward, and spares referral partners the pain of a deal getting killed at the finish line for an uncurable problem.
“As soon as it comes in, rather than wasting time on ‘are we collecting this? Are we extending offers?’ because think, it’s not just the fraud,” said Campbell. “Even if you can catch the fraud at the very end, somehow it’s not the catching part, it’s the fact that your staff is working a fraudulent deal for some matter of days. And Thumbprint just says, ‘get it out. It’s gone, done,’ and right at the beginning of the process.”
