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
New York’s COJ Restrictions Have Been Signed Into Law
August 30, 2019
Governor Cuomo has signed S6395, the law that outlaws entering a Confession of Judgment in New York against a non-New York debtor.
Rich Azzopardi, a senior advisor to the governor, said on social media that the law has “closed a loophole that allowed unscrupulous creditors to use NY courts to penalize out-of-state consumers with no ties to the state.” He congratulated Senators Brad Hoylman and Assembly Member Jeffrey Dinowitz for their work on the bill.
Senator Hoylman tweeted in response that “the entire business model of lenders who exploited New York’s court system and laws to prey on out-of-state small businesses through confessions of judgment was immoral.”
The Confession of Judgment ban is very specific, it prohibits the entering of a COJ in New York against a non-New York party. It does not prevent parties from filing lawsuits in New York. It does not prohibit COJs from being filed in other states. This law is significant because approximately 99% of COJs being utilized in the small business finance industry were being filed in New York regardless of where the debtor resided. That is because the New York Court system is the fastest and most efficient when it comes to entering COJs and securing a judgment.
The bill was drafted in response to a controversial story series published by Bloomberg reporters Zeke Faux and Zachary Mider that alleged abuses were taking place in the New York courts via COJs.
New York’s COJ Bill Has Been Delivered To The Governor
August 28, 2019
New York’s infamous Confession of Judgment bill has finally been delivered to the governor for his signature. Although the legislative process offers flexibility to depart from the statutory timelines (as we have witnessed), the governor now presumably has 10 days or less to sign it. Stay tuned.
The Confession of Judgment ban is very specific, it prohibits the entering of a COJ in New York against a non-New York resident. It does not prevent parties from filing lawsuits in New York. It does not prohibit COJs from being filed in other states. This law is significant because approximately 99% of COJs being utilized in the small business finance industry were being filed in New York regardless of where the debtor resided. That is because the New York Court system is the fastest and most efficient when it comes to entering COJs and securing a judgment.
The 2019 Top Small Business Funders By Revenue
August 14, 2019The below chart ranks several companies in the non-bank small business financing space by revenue over the last 5 years. The data is primarily drawn from reports submitted to the Inc. 5000 list, public earnings statements, or published media reports. It is not comprehensive. Companies for which no data is publicly available are excluded. Want to add your figures? Email Sean@debanked.com
| Company | 2018 | 2017 | 2016 | 2015 | 2014 |
| Square | $3,298,177,000 | $2,214,253,000 | $1,708,721,000 | $1,267,118,000 | $850,192,000 |
| OnDeck | $398,376,000 | $350,950,000 | $291,300,000 | $254,700,000 | $158,100,000 |
| Kabbage | $200,000,000+* | $171,784,000 | $97,461,712 | $40,193,000 | |
| Global Lending Services | $232,200,000 | $125,700,000 | |||
| Bankers Healthcare Group | $220,300,000 | $160,300,000 | $93,825,129 | ||
| National Funding | $121,300,000 | $94,500,000 | $75,693,096 | $59,075,878 | $39,048,959 |
| Forward Financing | $75,500,000 | $42,100,000 | $28,305,078 | ||
| ApplePie Capital | $69,700,000 | ||||
| Fora Financial | $68,600,000 | $50,800,000 | $41,590,720 | $33,974,000 | $26,932,581 |
| Reliant Funding | $64,800,000 | $55,400,000 | $51,946,000 | $11,294,044 | $9,723,924 |
| Envision Capital Group | $32,700,000 | ||||
| Expansion Capital Group | $31,300,300 | $23,400,000 | |||
| SmartBiz Loans | $23,600,000 | ||||
| 1 Global Capital | bankruptcy | $22,600,000 | |||
| IOU Financial | $19,200,000 | $17,415,096 | $17,400,527 | $11,971,148 | $6,160,017 |
| Quicksilver Capital | $16,500,000 | ||||
| Channel Partners Capital | $23,000,000 | $14,500,000 | $2,207,927 | $4,013,608 | |
| Lendr | $16,500,000 | $11,800,000 | |||
| Lighter Capital | $16,000,000 | $11,900,000 | $6,364,417 | $4,364,907 | |
| United Capital Source | $9,735,350 | $8,465,260 | $3,917,193 | ||
| Fundera | $15,600,000 | $8,800,000 | |||
| US Business Funding | $14,800,000 | $9,100,000 | $5,794,936 | ||
| Wellen Capital | $12,200,000 | $13,200,000 | $15,984,688 | ||
| PIRS Capital | $11,900,000 | ||||
| Nav | $10,300,000 | $5,900,000 | $2,663,344 | ||
| P2Binvestor | $10,000,000 | ||||
| Seek Business Capital | $8,800,000 | ||||
| Fund&Grow | $7,500,000 | $5,700,000 | $4,082,130 | ||
| Funding Merchant Source | $7,500,000 | ||||
| Shore Funding Solutions | $5,000,000 | $4,300,000 | |||
| StreetShares | $4,967,426 | $3,701,210 | $647,119 | $239,593 | |
| FitSmallBusiness.com | $3,000,000 | ||||
| Eagle Business Credit | $3,600,000 | $2,600,000 | |||
| Everlasting Capital | $2,500,000 | $2,100,000 | |||
| Swift Capital | acquired by PayPal | $88,600,000 | $51,400,000 | $27,540,900 | |
| Blue Bridge Financial | $6,569,714 | $5,470,564 | |||
| Fast Capital 360 | $6,264,924 | ||||
| Cashbloom | $5,404,123 | $4,804,112 | $3,941,819 | ||
| Priority Funding Solutions | $2,599,931 |
Chase Ends Partnership With OnDeck, OnDeck Stock Tanks On Bucket of Mixed News
July 29, 2019
The market didn’t take too kindly to OnDeck’s Q2 earnings announcement on Monday. The stock price set a new all time intraday low of $3.01, down 24% from Friday’s close.
First, JPM Chase ended their partnership with OnDeck, the company said, bringing a 3-year relationship to a close. “We can’t speak for Chase and their change in priorities,” OnDeck CEO Noah Breslow said during the Q&A with analysts. “I don’t think it was specific to us.”
It was subsequently revealed that the relationship was never a significant moneymaker for their business to begin with. “On a standalone basis, it was a positive contributor,” the company said, but that it was “not a contributor to the bottom line profit.”
Breslow called the Chase deal a one-off that had some costs involved with it, but that they were optimistic about other deals with banks through their subsidiary ODX. “We do believe the drivers of this are not some fundamental readout on the ODX model,” he explained. “Again, we had a product that performs very well from an underwriting perspective. Customers loved it. We can’t speculate on why Chase made this particular decision. We just know it was specific to them.”
OnDeck also announced plans to pursue a bank charter and believed that the timing was right. Although they were “far along in [their] thinking,” they had not actually applied for a charter and they left the door open to possibly acquiring a chartered bank to achieve that goal. “I think the next logical milestone would be to look for some kind of either application for such a charter, but we’re not prepared to talk about a timeframe over which that would occur,” the company said.
Originations shrank to $592M, down from $636M in the previous quarter. “We do expect a return to sequential originations growth in the third quarter,” Breslow said.
The company also plans to buy back up to $50 million worth of stock to boost the share price.
Early Bird Ticket Pricing To deBanked CONNECT San Diego Ends Soon!
July 26, 2019deBanked CONNECT Toronto was a hit and photos and coverage of the event will be available soon. But in the meantime there’s only SIX DAYS LEFT of early bird pricing to deBanked CONNECT San Diego! This event is taking place at the Hard Rock Hotel in October 24th. Brokers get in with a discounted price.
deBanked CONNECT Toronto Kicks Off Today
July 25, 2019Welcome to The Omni King Edward Hotel |
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Don’t be late! Registration and networking starts at 1:30pm at The Omni King Edward Hotel in Toronto.
Schedule of events:
Be sure to introduce yourselves to each of our sponsors and listen to our great speakers. |
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Breakout Capital is BACK
July 17, 2019
SecurCapital Corp has acquired the lending business of Breakout Capital Finance.
Breakout was founded in 2015 by Carl Fairbank, a former investment banker, and quickly made a splash in the burgeoning small business lending industry. The company has raised significant capital and is a principal member of Innovative Lending Platform Association (ILPA), a trade group that among other things, created SMART Box, a uniform loan disclosure meant to enhance transparency across the industry.
Earlier this year, however, the company suspended originations.
But that’s poised to change. The deal with SecurCapital, a supply chain and financial service provider headquartered in California, means that Breakout is on track to resume originations as early as next week, according to the company. And there’s other changes afoot.
Tim Buzby, who previously served as the company’s CFO is now the President & CEO. Buzby is well primed for the job. He’s a former CEO of Farmer Mac, a company he spent 17 years with.
Carl Fairbank, who previously served as CEO of the lending business, will provide strategic guidance during the transition, the company reports. He will no longer have a day-to-day role.
“After four years as Founder and CEO of Breakout Capital Finance, this transaction begins the next chapter of Breakout Capital’s lending business,” Fairbank is quoted as saying in a company announcement. “SecurCapital is also committed to the proliferation of best practices to drive change in the broader market. I believe Breakout Capital, in partnership with SecurCapital, is now well positioned for substantial growth, especially with its commitment to FactorAdvantage.”
Fairbank is reportedly shifting his focus toward driving innovation in artificial intelligence, machine learning, and blockchain.
Breakout Capital has also hired McLean Wilson, former CEO of Charleston Capital (fka Drift Capital Partners), an asset manager in the SME space, and former CEO of inFactor, a factoring company, as Chief Credit Officer.
In an interview with Breakout’s new CEO Tim Buzby and VP Jay Bhatt (who has been with the company since the very beginning), they said that the company’s risk criteria and credit box will remain the same as it was previously, with potential to even expand it down the road. The company pressing the originations pause button from approximately February to July, therefore, shouldn’t be interpreted as a weakness of the company’s business model. Rather the acquisition and changes should suggest the opposite.
Steve Russell, CEO of SecurCapital, commented, “We’re delighted to have found a highly respected team and innovative business model in the small business finance space. I share the founder’s vision of the massive potential of the FactorAdvantage lending solution and believe we now have the platform and capital to rapidly grow this industry-changing product. We couldn’t have found a better business to complement SecurCapital’s strategic vision for empowering small businesses.”
Two SecurCapital executives have also been placed on Breakout’s board of directors.
Buzby confirmed that operations will resume as normal. The business address and business name will remain the same with one notable difference; That being that the name has been shortened from Breakout Capital Finance to Breakout Capital. It’s also now being operated by a subsidiary of SecurCapital.
