Business Lending
IOU Financial Breaks All-Time Internal Loan Originations Record
August 26, 2021
IOU Financial originated $34.4M worth of small business loans in Q2, the company reported, a 272% increase over the same quarter last year. July was IOU’s best month ever, coming in at $18.5M in originations.
The achievements follow a slew of announced changes, including new hires and a cash-back loan product.
“We are delivering on our Post-Pandemic Growth Plan and these growth figures are the result,” said Robert Gloer, President and CEO, in the quarterly earnings announcement. “We are committed to continue delivering on our plans and maximizing the growth potential of the marketplace strategy.”
The company hopes to originate between $165M to $200M of business loans for the year, which would be their best year ever, according to the deBanked Small Business Funder Rankings.
A Lawsuit Against Marcus Lemonis & Others is Alleging That “The Profit” Is Scamming Small Businesses
August 22, 2021
Marcus Lemonis, the star of CNBC’s show The Profit, is no stranger to litigation, but a proposed amended complaint recently filed against him in a year-old dispute really lets loose. The 165-page grievance reads like its own reality show, in which plaintiffs assert that Lemonis is nothing more than a fraud.
“While he pretends to be savior on TV to save businesses, Lemonis actually and purposefully sets out to acquire them for himself and ruin them financially,” plaintiffs contend.
Forbes turned the allegations in the proposed amended complaint into an exposè about Lemonis and his TV show, leading with a photo of him that is captioned, “The Profit or Profiteer?” It racked up more than 33,000 views in the first 24 hours at last count by deBanked.
But the lawsuit filed by Nicolas Goureau, Stephanie Menkin, and ML Fashion, who were first filmed for the show in 2014, is a bit overshadowed by the fact that this is their 2nd amended complaint and that a motion to dismiss their previous one was already pending.
The latest one highlighted by Forbes is communicated to the public as being the culmination of an “eight-month investigation” carried out with the help of a “former district attorney and a top law school professor, and a world renown psychiatrist that was spurred by the coming forward of no less than seventy (70) family businesses that have been destroyed…”
The identities of the people who carried out the “investigation” are not shared and the 70 “destroyed businesses” are not co-plaintiffs. At times, it is hard to take the complaint seriously when it casually asserts sensational facts, like one that says a participant on the show killed themselves but it doesn’t say who they were, where they worked, or any other details about the death.
Plaintiffs are seeking at least $12 million in damages and they have just added NBC Universal Media, LLC as a defendant.
Lemonis contends that the plaintiffs earned $3 million for their labor and that they charged $1.3 million in personal expenses on the company credit card.
Overall, it’s probably unwelcome press for the show given that the eighth season just debuted. Many people in the small business finance community are fans of the show. In 2017, Lemonis personally criticized Kabbage, saying that they weren’t a friend of small business.
Lemonis is currently hosting a contest on twitter where small businesses are competing to win $10,000 by submitting their pitch.
Win $10,000 for your business …. Make your best pitch … must use #TheProfit to submit your pitch pic.twitter.com/8CuZAN5SJ0
— Marcus Lemonis (@marcuslemonis) August 21, 2021
What The “Capital Dude” Said About Experience, Success, and the Future
August 18, 2021
Coming in at rank #1,044 on the 2021 Inc 5000 list was a small business finance provider with a whimsical name, Capital Dude. Having some common ownership overlap with another Inc ranked company, Central Diligence Group (#2,893), the Dude told deBanked that they didn’t shut down or pause funding throughout 2020. In fact, they continued to grow.
“We really have to attribute the company’s growth to our hardworking and efficient team that made sure we didn’t miss a beat while having to work remote,” said company partner Andrew Hernandez.
The name, Capital Dude, was chosen to convey an easy process to their partners and clients, the company says, while at the same time being compatible with a mascot they had in mind. The Capital Dude himself is a superhero in a green suit with the letters “CD” emblazoned on his chest. He’s also got a red cape and a flashy smile.
Behind the optics, however, is a seasoned team.
“We got started in the industry during the ’08 – ’09 recession,” Hernandez said, “so when you experience getting started during a downturn, you quickly realize that the only way to keep going is to stick to your principles while continuously taking inventory of the ongoing situation and making any necessary changes quickly in order to protect the portfolio. While both downturns were very different in how they played out, applying that previous experience to the past 18 months has been interesting as we have seen a lot of similarities that are very measurable.”
Central Diligence Group, meanwhile, has gotten repeat recognition on the Inc 5000 list.
“CDG offers consulting and underwriting services to other alternative financing companies in the industry,” Hernandez explained. The “short term plan is to scale out this portion of the business in 2022 via licensing of our platform to funders, funds, accredited investors, etc.”
The companies are currently in the process of moving to a new office and they expressed that they are “very bullish on the future” and plan to increase their headcount and continue to grow.
Small Business Finance on the 2021 Inc 5000 List
August 17, 2021Here’s where alternative small business finance ranks on the Inc 5000 list for 2021:
| Ranking | Company Name | Growth |
| 44 | Crestmont Capital | 7,404% |
| 1044 | Capital Dude | 463% |
| 1221 | Fountainhead | 394% |
| 2298 | Bankers Healthcare Group | 186% |
| 2427 | Fund&Grow | 173% |
| 2628 | Channel Partners Capital | 155% |
| 2803 | PIRS Capital | 142% |
| 2893 | Central Diligence Group | 135% |
| 3005 | ApplePie Capital | 127% |
| 3027 | Nav | 126% |
| 3365 | Onset Financial | 105% |
| 3394 | OTR Capital | 104% |
| 3547 | Forward Financing | 96% |
Did we forget you? Let us know at info@debanked.com
LoanMe Now Officially Part of NextPoint
August 11, 2021
The Canadian SPAC deal to merge LoanMe with Liberty Tax was finally completed last month after being announced in February.
The combined entity, NextPoint Financial, trades on the Toronto Stock Exchange under the ticker NPF.
“In just over a year from establishing this SPAC, we have closed two acquisitions that immediately create a financial services company with scale and opportunities for synergistic growth,” said Andy Neuberger, Chairman of NextPoint Financial. “With a management team and board comprised of proven executives and operators across the financial services, digital and retail sectors, we have very quickly created an organization that is set to impact how financial services are delivered to North America consumers and small businesses.”
The deal is especially significant in the small business finance space since it will place LoanMe’s small business loan and merchant cash advance products into 2,700 Liberty Tax storefronts throughout North America.
New York’s New Governor
August 10, 2021Now that Governor Cuomo is leaving office early, the Lieutenant Governor, Kathleen Hochul, will become his replacement. This detail is relevant given that New York’s landmark legislation (SB 5470) for the small business finance industry is slated to go into effect on January 1st.
Hochul served as Erie County Clerk and as a member of Congress. She’s also long been an advocate of small business.
While running on Cuomo’s ticket in 2018 for Lieutenant Governor, she criticized her opponent in a controversial campaign ad by saying that he couldn’t be trusted to manage the state budget because he had defaulted on a small business loan.
SB 5470 is expected to be so restrictive, that at least one small business finance provider has already fled the state.
AMEX: Kabbage to be the “Landing Point” for Small Businesses
August 5, 2021
Now that American Express has put “Kabbage to work” with a business checking account offering, the company shared what’s next during the Q2 earnings call.
“..what you’ll see ultimately is the Kabbage platform being the landing point for small businesses,” AMEX Chairman and CEO Steve Squeri said. “And the way you want to think about this is fintech with scale. And so when you think about Kabbage, which is a pure-play fintech in the small business space and you think about American Express and the small businesses, and you combine that together, you have a fintech at scale. Not a fintech growing at scale, a fintech growing from scale with a balance sheet. And so that has always been the vision of Kabbage. As you bring Kabbage into the bank holding company structure, you have to do some other things to future proof it, if you will, and that’s what we’ve been doing. But that’s what you will see.”
IOU Introduces the “Cash Back” Concept to the Small Business Loan Market
August 4, 2021
Immediately following news of a management shakeup, small business lending company IOU Financial introduced a first-of-its kind offering to eligible customers, cash back.
“Available only to qualified new clients,” as the announcement says, the IOU Cash Back Loan enables borrowers to benefit from perfect payment history by receiving 3% of the original loan back in the form of a cash rebate.
According to Carl Brabander, the new EVP of Strategy, this is not a gimmick where the rebate can only be applied to a future loan or loaded up onto a gift card.
“The merchant would receive the cash back amount by ACH directly to their bank account,” he writes, “provided they (a) have a perfect repayment history and (b) apply for the rebate within 30 days of repaying the loan, using the cash back certificate we would have sent them when the loan closed.”
Translated into dollars, this reward could be sizable given that IOU’s average loan size hovers around $100,000 and can go much higher.
“The IOU Cash Back Loan gives us the opportunity to give something back to new clients that put their faith in us to fund their growth plans,” said IOU CEO Robert Gloer in a public statement.
The cash-back loan concept was developed scientifically through focus group testing, the company claims.
The sudden flurry of activity emanating from IOU can probably be attributed to a deal struck last year when Neuberger Berman, an investment manager with $374B under management, acquired a 15% stake in the firm.
Brabander says that IOU is very bullish on the rest of the year and 2022.
“We see small business coming back strong now that the 2nd round of PPP has finished working its way through the system,” he says. “That’s why we’re investing heavily in products (ex. Cash Back), technology (our IOU360 platform) and distribution right now…”
