Industry News

IOU Originated Whopping $74.2M in Q3

November 21, 2022
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iou homepageIOU Financial experienced a strong third quarter, reporting total loan originations of $74.2M, a 25.8% increase over Q2. The year-to-date total now stands at $192.7M.

“IOU Financial continues to grow revenues and invest in scalability while reducing its adjusted operating expense ratio,” said Robert Gloer, President and CEO, in an official announcement. “We remain laser focused on scalability and growth while maintaining consistent underwriting standards, and we expect to build on this trend in the months and quarters to come.”

IOU attributes the growth to “healthy demand from borrowers” and “continued demand from investors seeking high quality loans.”

Notably, the company said that collections had been in line with expectations and it had “not seen significant increases in delinquencies, defaults or loan modifications.”

Cover Genius Raises $70M in Series D Funding Led by Dawn Capital

November 8, 2022
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Cover GeniusThe insurtech company, Cover Genius raised $70 M in Series D funding led by Dawn Capital. Participants also included investors from New York-based Atlas Merchant Capital and existing investors including GSquared and King River Capital. The funding will be used to continue growth expansion for new global insurance distribution platform, XCover.

“XCover is our award-winning global distribution platform for any line of insurance or warranty, with an API for instant claims payments that holds an industry-leading Net Promoter Score (NPS) of +65,” said Angus McDonald CEO and Co-Founder of Cover Genius. “We work with our partners to co-create solutions that embed protection that’s licensed or authorized in over 60 countries and all 50 US states.”

This platform makes it simple for digital companies to offer tailored insurance policies directly to their customers and is trusted by some of the world’s largest companies including Booking Holdings (owner of Priceline, Kayak and, Intuit, Hopper, Skyscanner, Ryanair, Turkish Airlines, Descartes ShipRush, Zip and SeatGeek. It’s also available at Amazon, Flipkart, eBay, Wayfair, and SE Asia’s largest company, Shopee.

At the moment, Cover Genius is entirely focused on growth and expansion.

“We are a fast-growing, global market leader and this latest funding round will help us as we enter our next growth phase,” said McDonald.

Shopify Funds $507.6M in Q3, Expands MCAs and Loans to Australia

October 27, 2022
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Shopify Capital originated $507.6M in merchant cash advances and loans in Q3, up from $416.4M in Q2. The increase was assisted in part by the company’s expansion into Australia, bringing the total countries that Shopify funds in to four (US, UK, Canada, AUS).

Shopify is the largest e-commerce platform after Amazon but the two companies are in the same ballpark when it comes to lending originations, and Shopify is potentially doing more.

Shopify generated total revenue of $1.4B in Q3.

“In Q3, we delivered another solid quarter of GMV, revenue, and gross profit dollar growth against the high inflationary environment,” said Amy Shapero, Shopify’s CFO. “From an operational perspective, we recalibrated our organizational structure, successfully rolled out a new compensation framework, and began integrating Deliverr into Shopify. Looking ahead, the flexibility of our platform, breadth of solutions, pace of innovation, and disciplined investment approach position Shopify well to realize the enormous opportunity ahead.”

Arrangements for Nick Gregory of CDG: Rest in Peace

August 29, 2022
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Nick Gregory, a co-founder and partner of both Central Diligence Group and Capital Dude, passed away suddenly last Thursday. Gregory was a well-known and beloved 16-year veteran of the small business finance industry. If you’d like to pay your respects, please take note of the following arrangements:

Wake Location:
Roslyn Heights Funeral Home
75 Mineola Ave
Roslyn Heights, NY 11577
Tues August 30th: 3-5PM, 7-9PM
Wed August 31st: 3-5PM, 7-9PM

Thurs September 1st, 10AM:
St. Mary’s Roman Catholic Church
110 Bryant Ave, Roslyn, NY 11576
-Funeral Procession to Cemetery-

Cemetery of the Holy Rood
111 Old Country Rd, Westbury, NY 11590

LoanMe Has Stopped Originating Business Loans

June 15, 2022
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stocks downAt least two public-facing employees of LoanMe have stated that the company has stopped originating business loans. Both believe that this is permanent.

The news may seem rather abrupt given that NextPoint Financial, a new publicly traded SPAC, just completed its acquisition of LoanMe less than a year ago. NextPoint apparently had second thoughts because in March it announced that it may have overpaid for LoanMe after reviewing its financial calculations. It stated that it would commence a review of the matter and report back. No determination to that end, if one were made, was subsequently announced.

NextPoint has since delayed filings of its year-end 2021 and Q1 2022 statements on the basis that it had not yet been able to finalize the books for LoanMe and another newly acquired subsidiary named Community Tax LLC. In doing so, it did not suggest that anything was awry.

Separately, however, LoanMe sued a loan servicing company in Delaware Superior Court on May 9th under seal for allegedly breaching a contract. The case was unsealed on June 10th. Three days later, two LoanMe employees say that they received notice that the company was shuttering.

The Senior National Accounts Manager wrote on social media, “yes, LoanMe is permanently closing. The powers that be at our parent holding company, NextPoint Financial, decided it was time to pull the plug.”

Credibly is Making Moves

June 14, 2022
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crediblyMichigan-headquartered Credibly has confirmed it acquired ProApprove, a specialty finance company offering home improvement financing solutions. The deal, which it said actually took place in 2021, is now front-and-center because of an agreement Credibly has secured with Castlelake, a global alternative investment firm, for the purchase of up to $350M in home installment contract receivables originated by ProApprove.

“Through conversations with contractors who obtain financing from Credibly, we identified a significant market opportunity in the home improvement space,” said Ryan Rosett, co-founder and co-CEO of Credibly.

“We are pleased to support the expansion of ProApprove’s home improvement financing program at a time when there is increased demand for financing solutions from homeowners across the U.S.,” said, Matt Little, Partner, Global Specialty Finance and Business Development & Capital Markets at Castlelake. “We believe that ProApprove’s parent Credibly has established itself as an experienced commercial lending platform with a keen focus on risk. We believe this transaction provides an opportunity to support a new product for Credibly in a historically underserved consumer market.”

The news follows the announcement that Credibly had secured a $50M credit facility for its core small business lending business. At the time, Credibly CFO Michael Seneski said of it, “The cost savings resulting from the refinance, coupled with the new financing facility, further solidifies our position as a leader in providing capital to SMBs and will be used to accelerate our aggressive growth trajectory.”

Credibly was founded in 2010.

The Company That Acquired Alchemy Technologies is a Small Business Lender

June 9, 2022
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Business WarriorThe sale of Alchemy Technologies to Business Warrior was announced on Thursday. The sale price of $8.75M ($2.25M in cash), is more than 3x Alchemy’s 2021 revenue of $2.8M.

While Business Warrior describes itself as “the source for small businesses in America to get more customers,” its homepage leads with a pitch for a working capital loan. “Our goal is to give you access to funding before you need it so you can grow without the restraints set on you by your bank,” the website says.

Business Warrior provides loans from $5,000 to $100,000 with interest rates as low as 7.97% and with terms between 12-36 months. It also offers marketing, software, and scaling solutions.

“After working with Alchemy, we quickly realized the massive potential of adding this international group of industry leaders to the Business Warrior team,” said Jonathan Brooks, Business Warrior President, in a press release. “With our Business Warrior platform, premium marketing, and now a global lending technology presence, we are building solutions that propel the success of small businesses.”

“We are so excited about joining the Business Warrior family!” said Timothy Li, CEO of Alchemy. “This move provides Alchemy with the additional resources, tools and capital necessary to enhance our service to customers. Both companies believe small business owners are the lifeline of local communities. By bringing Alchemy and Business Warrior together, the positive impact on these communities is going to be worldwide.”

Business Warrior is publicly traded under the ticker (OTC: BZWR).

Grand Opening of Latin Financial’s New Office Joined by Public Officials, Family, and Friends

June 4, 2022
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Connecticut Farm Bureau BuildingJust a few miles outside of Hartford, cars exited the highway and advanced towards a quieter part of Connecticut. The aptly named “Beaver Road” is home to Wethersfield’s US Postal Service building on one side and the Connecticut Farm Bureau building on the other. Drivers veered towards the latter and pulled into a parking lot situated behind a literal babbling brook. There are other tenants besides the Farm Bureau in the expansive brown-bricked commercial-use building as indicated by a sign outside, but the business that people had come to celebrate hadn’t even been added to it yet.

Nevertheless, the blue and white balloons waving in the wind outside the back entrance were a clue that this was the right place. Inside, on the first floor, a line of people found the large plated logo of Latin Financial, a small business that helps other small businesses obtain working capital.

Already personally acquainted with the firm led by Sonia Alvelo, she led myself and others on a tour of the company’s new space. Latin Financial employees were easily identifiable by their blue company shirts, but others wore green to signal that they were part of a sister company named Sharpe Capital. Sharpe is spearheaded by Brendan P. Lynch.

Both brands previously operated in nearby Newington but outgrew what they had. When the ceremony officially kicked off with some impromptu speeches, the prominence of those assembled became evident. It included, among others, the Better Business Bureau, the local Chamber of Commerce, and the Connecticut Children’s Hospital.

Wethersfield’s mayor, Michael Rell, was also there. Rell welcomed Latin Financial to the neighborhood, echoing the note sang by other government officials.

Connecticut State Senator Matthew Lesser shared his appreciation for Alvelo and her company’s mission to provide capital to underserved small businesses both in the state and across the nation. Lesser explained that the state legislature had recently decided to delay a proposed commercial financing bill (Senate Bill 272) so that it could further assess the input from companies like Latin Financial and the potential impact it would have before moving forward. A version of the bill will be reintroduced next year.

Meanwhile, Joseph Rodriguez, Deputy State Director for US Senator Richard Blumenthal’s office, said that he was impressed by the company’s accomplishiments and contributions to the community. He presented Alvelo with a Certificate of Special Recognition signed by Blumenthal in honor of her new office and for her service to Connecticut Small Businesses.

Latin Financial Grand Opening

Werner Oyanadel, Latino and Puerto Rican Policy Director at the Connecticut General Assembly’s Commission on Women, Children, Seniors, Equity & Opportunity, said that Alvelo had “been a good partner of [their] work at the Capitol” and that “Latin Financial is filling a big void assisting new businesses and Latino entrepreneurs’ access to needed reources.”

Employees of both Latin Financial and Sharpe appeared excited by all the fanfare while friends and family members were proud to share in the moment. Alvelo ceremoniously cut a blue ribbon for the cameras and in conversations that followed it became known that they were hiring.

Alvelo has previously spoken at Broker Fair in New York and deBanked CONNECT Miami. She has been a primary source of information for deBanked since 2016 on matters regarding small business financing in Puerto Rico.