Industry News
Merchant Cash Advance Industry Pioneer David Goldin Launches Lender Capital Partners To Provide Financing To Merchant Cash Advance / Alternative Business Loan Providers
November 5, 2019
White Plains, NY – November 5, 2019 – David Goldin, one of the merchant cash advance industry pioneers who founded one of the first US merchant cash advance providers in 2002, Capify (formerly known as AmeriMerchant), that later expanded to the UK and Australia has partnered with a subsidiary of Basepoint Capital, a seasoned specialty finance group, to form Lender Capital Partners (http://www.lendercapitalpartners.com). Basepoint has provided over $300 million in committed financings / forward flow purchases in the merchant cash advance / alternative business loan industry.
Lender Capital Partners (LCP) provides MCA and alternative business lending platforms with strategic capital including:
- Forward flow programs – LCP funds 100% of the amounts disbursed by the platform in connection with their funding of advances / business loans including sales commissions to their customers to free up cash and avoid the burden of equity requirements or “hair cut” money associated with traditional asset-based credit lines.
- Participations / Syndication – by having LCP purchase a participation in larger deals, the platform is able to offer larger size approvals to their customers and brokers / referral partners without taking on concentration risk. LCP can participate up to $1 million in each deal and provide strategic capital by offering our many years of industry experience underwriting larger size deals.
- Credit facilities – LCP provide credit facilities for MCA and alternative business loan providers that begin at a minimum of $20 million and can go up to $100 million+. Our credit facilities typically offer a higher advance rate than a bank and less stringent concentration limits.
- Broker Graduation Program – LCP will allow brokers to take the next step of becoming a direct lender by providing the capital and know-how needed to fund deals on their own. Designed for brokers that can originate a minimum of $500k/month, LCP can provide the capital needed and set up brokers with one of our partners to provide a back office if needed for underwriting / servicing without having to make the investment on their own.
- Point of Sales / Credit Card Processor Merchant Cash Advance / Merchant Financing Program – LCP can provide a turnkey solution for POS / Credit Card Processing companies to offer a merchant financing program to their merchants to compete with some of the larger POS providers / credit card processors that are now offering these programs in-house and have had great success. LCP can provide the capital needed for a merchant financing / merchant cash advance program as well as introduce one of our underwriting/servicing partners if needed.
“After exiting the US MCA business in 2017, I have decided the time is right to offer my 17+ years of global MCA / business lending experience to the industry by partnering with Basepoint to supply capital to the MCA / business loan industry. I believe the various programs we offer at Lender Capital Partners are tailored for just about any company in the industry – for both current lenders as well as larger brokers/ISOs that are looking to graduate to the next step of becoming a lender as well as to POS providers / merchant acquirers looking to offer an in-house program to their merchants. And my 17+ years industry experience is a great value-added benefit that very few lenders, if any can bring to the table”, says David Goldin, a principal of Lender Capital Partners.”
About LENDER CAPITAL PARTNERS
Lender Capital Partners provides capital to commercial lenders, particularly in the merchant cash advance / alternative business loan industry. One of the founders of Lender Capital Partners is David Goldin. David is the Founder of Capify, one of the first merchant cash advance providers in the US founded in 2002. David scaled Capify to 225 employees operating in 4 countries and sold the US business to a competitor in 2017 and secured a $95 million credit facility with Goldman Sachs to fund Capify UK and Capify Australia which has over 125 employees total today operating in each of those markets. David has over 17 years experience in the merchant cash advance / alternative business finance industry and is considered a pioneer in the industry. David’s extensive expertise allows Lender Capital Partners to bring strategic value to our relationships, not just capital. For more information on Lender Capital Partners, visit http://www.lendercapitalpartners.com
Janene Machado Appointed Director of Programs for PCMA’s New York Chapter
November 4, 2019
DeBanked’s Director of Events, Janene Machado, has been appointed the Director of Programs for Professional Convention Management Association’s (PCMA) New York Chapter. Machado will oversee the Program Committee for a three-year term (January 2020 – December 2022). The Committee is responsible for deciding on the topics, programming, logistics, and speaker invitations for the New York Chapter events.
PCMA, a volunteer driven organization, is the world’s largest, most respected and most recognized network of business events strategists with more than 7,000 members and activities in 30 countries.
Machado has overseen and directed deBanked’s exceptional events including CONNECT and Broker Fair since joining the company in July 2018. The volunteer position with PCMA will be in addition to her continuing to work for deBanked.
Knight Capital Has Been Acquired
November 1, 2019
Publicly-traded Ready Capital Corporation has acquired 100% of Knight Capital LLC. The total sales price was undisclosed but it consisted of cash and 658,771 common shares of Ready Capital stock. A share currently trades at $15.83, valuing the stock portion in excess of $10 million.
More details may emerge when Ready Capital publishes quarterly earnings next week.
“The acquisition of Knight Capital expands Ready Capital’s product offering to small businesses and does so on a platform that has achieved scale,” said Tom Capasse, Ready Capital’s Chairman and Chief Executive Officer, in a public statement. “Furthermore, the addition of Knight Capital will allow us to leverage its proprietary technology to further increase the efficiency of Ready Capital’s lending platform, enhance our borrowers’ experience and expand existing customer acquisition channels.”
Ready Capital, a multi-strategy real estate finance company, is better known by its management company, Waterfall Asset Management, LLC. Waterfall has previously provided credit facilities to companies like OnDeck, Fundation, and UK-based Lendable.
Ready Capital is headquartered in New York City and employs 400 lending professionals nationwide.
Become Closes Series A with $12.5 Million
October 29, 2019
Become, formerly known as Lending Express, has finished its Series A funding round with $10 million having been raised from Benson Oak Ventures and Magenta Venture Partners, among others, as well as an additional $2.5 million in venture debt from Viola Credit.
“We strongly believe it is time to disrupt conventional and ‘alternative’ lending practices,” said Become’s CEO and Co-founder Eden Amirav in a press release. “Become’s technology provides SMBs with the transparency and insights they need to improve their unique financial profiles to attract legitimate funders. This creates a new market for alternative lenders and opens opportunities for formerly ‘unfundable’ SMBs to be bigger, better and [sic] more successful. This funding will allow us to expand our global reach and change the industry for the better, as we ensure that every business that deserves funding has the tools to make it happen.”
The technologies being referred to here are Become’s LendingScoreTM, an analytics program that uses a host of variables to determine businesses’ chances of funding; and their new online marketplace that was launched last month.
Marketed as “Expedia for loans,” the marketplace allows all players in the alternative funding ecosystem, be they funders, brokers, or small business owners, to carry out their functions in one place. The draw being that all processes, such as the looking around for funders, the application for funds, and the approval, can be done through the marketplace. Beyond this, Amirav told deBanked that Become’s systems monitors the performance of those businesses who have signed up to the marketplace and makes recommendations of when to apply for funds, as well as how much to apply for, based on the data they accrue.
“There’s nothing like this in small business. The idea is to give small businesses the power, instead of sending them to lenders, where they’re applying for funding and each application hurts their credit score,” asserted Amirav. “Until today the only ways businesses would get money would be to go out and beg lenders. But now we’re giving the businesses the power.”
OnDeck Repurchased 3.2M Shares, Reports $8.7M Q3 Profit
October 24, 2019
OnDeck announced this morning that it has repurchased 3.2M of its own shares for $11M since making its buyback announcement on July 29th. The company intends to repurchase another $39M worth.
OnDeck was profitable in Q3, reporting a net income of $8.7M on originations of $629M. Although that was an increase over the previous quarter, the year-over-year decline was said to be a reflection of “tightening underwriting criteria and market dynamics.”
The average term loan was for $56,000 with an average maturity of 13 months. The company’s line of credit program is growing and now accounts for 21% of the company’s total loans and finance receivables at quarter-end, up 15% from last year.
“OnDeck expects the current operating environment to extend into 2020 with increased profitability,” their quarterly report said.
Avi Wernick and Boris Kalendarev Move to RDM Capital Funding
September 23, 2019
Avi Wernick and Boris Kalendarev are joining RDM Capital Funding as the new Director of Partnerships and Strategy and CFO/COO, respectively.
The move comes after a fruitful year for the company, with it securing a $7.5 million credit facility from Charleston Capital, an amount that it has since extended; upping its funding originations from $300-500,000 per month at the beginning of 2018 to over $2.5 million currently; and witnessing 300% growth over the previous 12 months.
Wernick is moving from BlueVine, where he was a Business Development Manager. Seeking to develop and create new opportunities for RDM, as well as ensure the stability of these prospects, Wernick says that he’s bringing with him the skills and lessons learned at the New Jersey-based funding company, believing that how he will operate in RDM will serve as a “nod to his time and the guys at BlueVine.”
Prior to this, Wernick had done consulting work for Morgan Stanley in the early 2010s. Saying that he “wasn’t enthralled by” the world of institutional finance, he moved to RDM during its launch year, 2015, before starting at BlueVine in February 2018. Speaking of his homecoming to RDM, Wernick notes that he is excited to return to the “blend of ideas” that he says is integral to RDM’s approach towards operations and culture.
Kalendarev echoes this, saying that himself, Wernick, and Reuven Mirlis, RDM’s CEO, have been friends outside of business for years and that he enjoys the overlap of his personal and professional connections. “It’s something we arrived at gradually, it wasn’t like, ‘hey, we’re all working in finance, let’s pool our efforts.’”
Coming from Santander, where he was a Vice President, Kalendarev will be focusing on the operations of RDM. Having been a Financial Advisor for Wachovia Securities during the early years of college, as well as beginning his time at Santander during the days of his senior year, Kalendarev has been in finance for over ten years. On his departure from the Spanish bank he said that it “was a very hard role to leave,” but that he savored the risk which came with building a less established financial entity, saying that “you’re more aligned with it, you’ve got skin in the game.”
On the pair joining, Mirlis had to say, “We’re very, very excited for both Avi and Boris. They have an immense amount of value and they’re going to be an integral part of our group going forward. We’re extremely excited to have them on board and to see what’s to come going forward.”
When asked about what exactly may come in the future for RDM, Mirlis noted he plans to reach 300% growth for a second year in a row.
On the topic of the recent COJ bill, the new hires were optimistic, with Kalendarev remarking that RDM stopped using the contracts over eight months ago and that he thinks “it’s good for the space.” “It’ll be a challenge for these companies who tried to get rich quick and take short cuts and not build a sustainable operation,” said Wernick. “You know regulation is a scary thing.”
Stripe Ventures Into Merchant Cash Advance Financing
September 6, 2019
Stripe, a payments firm lauded as the world’s most valuable private fintech company (at $22.5B), has officially launched a merchant cash advance product.
Dozens of news outlets have announced that the company is providing loans, but that’s not all, deBanked has learned. Both loans and merchant cash advances are available.
The company’s FAQ page originally explained the “Capital” product as a merchant cash advance but it’s since been updated to reflect that they offer access to both merchant cash advances and loans. An official Stripe spokesperson also clarified that an offer could be an MCA or a loan. The updated FAQ says that funding terms would be available in the customer dashboard, in the funding contract, and that which one a customer qualifies for depends on the specifics of their business.
Stripe merchant account customers can find out if they’re eligible for funding in their dashboard. If they’re not, they can still send Stripe a note through the dashboard to signal that they’re interested, say how much they’re looking for, and select what they plan to do with the funds. Stripe says they will not review your credit report and that all offers are based solely on Stripe transaction history.
The new product will not disrupt the separate integration with Funding Circle, according to a statement provided to Digital Transactions. Stripe customers can still apply to Funding Circle by connecting their Stripe account. Funding Circle offers term loans that range from six months to five years.
Stripe’s MCA product is currently only available in the US, but the company’s founders, Patrick and John Collison, brothers, hail from an unlikely place, rural Ireland. The company handles tens of billions of dollars in payments a year across 34 countries.
Like other recent entrants into the small business funding space, Stripe’s advantage is its ability to tap into its existing customer base. Other payments companies such as PayPal and Square, for example, were among the top four largest originators (for which public data is available) of alternative small business funding in 2018.
Note: This article has been updated to reflect the changes made on Stripe’s website as well as an additional clarification from the company.
IOU Financial Originates $38.5M in Q2
August 26, 2019IOU Financial originated $38.5M in loans in Q2, up from $32.8M the quarter before. The company said that the figure was actually a 31.8% increase over Q2 2018.
In a press release, IOU CEO Phil Marleau said, “IOU delivered strong loan origination and revenue growth in the second quarter of 2019 and continued to post positive earnings. We remain committed to our strategy of profitable growth which continues to deliver consistent and favorable results since its implementation.”
IOU is traded on the Toronto Stock Exchange and has a market cap of $19.3M.
