Industry News
SBFA Braved Snow Storm for Spring Fly-In
March 23, 2018
The Small Business Finance Association (SBFA) had their Washington DC Spring fly-in earlier this week. SBFA members met with Karen Kerrigan, the President and CEO of the Small Business & Entrepreneurship Council, on Tuesday afternoon, and Congressman Josh Gottheimer (D-NJ) in the evening.
Despite the blizzard, a handful of members continued to meet with members of Congress on the Hill on Wednesday.
Founded ten years ago, The SBFA is a non-profit advocacy organization dedicated to ensuring Main Street small businesses have access to the capital they need to grow and strengthen the economy.
Merchant Advance Capital Closes $30 Million Debt Facility
March 15, 2018
Canadian Merchant Advance Capital closed a $30 million debt facility from Comvest Credit Partners today.
“This is giving us significant runway,” Merchant Advance Capital CEO David Gens told deBanked. “For the next 12 months in particular, we’ve got great visibility as far as where our incremental capital is going to come from. This will allow us to focus less on fundraising and more on just building the business.”
Founded in 2010, Merchant Advance Capital offers several small business financing products including fixed term loans and business lines of credit. It also provides something called “The Good Cents Loan,” which Gens said he would like see more applicants for.
These loans are designed for businesses “that will positively impact the community or environment around them,” according to the company website. They require a more thorough application and the entrepreneur needs to convey to Merchant Advance Capital how the funds will help further their more socially or environmentally responsible cause. The company has only made a few of these loans which Gens said do not make money because the rates are so low.
This is the largest facility Merchant Advance Capital has gotten to date. However, Gens said that the business is primarily equity funded so that even as the business uses this new debt facility, it will still have more equity than debt.
Merchant Advance Capital generates most of its business through ISOs and partners and has two offices, one in Vancouver and the other in Toronto. Of about 50 employees, two-thirds work at the company headquarters in Vancouver.
2017 Small Business Financing Leaderboard
March 14, 2018Thanks to several companies filing their annual earnings statements and Funding Circle disclosing their USA origination figures for 2017, we’ve been able to put together a leaderboard in the small business financing space. This list is not comprehensive and omits key players like PayPal Working Capital and Amazon Lending.
| Company Name | 2017 Originations | 2016 | 2015 | 2014 |
| OnDeck | $2,114,663,000 | $2,400,000,000 | $1,900,000,000 | $1,200,000,000 |
| Kabbage | $1,500,000,000 | $1,220,000,000 | $900,000,000 | $350,000,000 |
| Square Capital | $1,177,000,000 | $798,000,000 | $400,000,000 | $100,000,000 |
| Yellowstone Capital | $553,000,000 | $460,000,000 | $422,000,000 | $290,000,000 |
| Funding Circle (USA only) | $500,000,000 | |||
| BlueVine | $500,000,000* | $200,000,000* | ||
| National Funding | $427,000,000 | $350,000,000 | $293,000,000 | |
| Strategic Funding | $393,000,000 | $375,000,000 | $375,000,000 | $280,000,000 |
| BFS Capital | $300,000,000 | $300,000,000 | ||
| RapidAdvance | $260,000,000 | $280,000,000 | $195,000,000 | |
| Credibly | $180,000,000 | $150,000,000 | $95,000,000 | $55,000,000 |
| Shopify | $140,000,000 | |||
| Forward Financing | $125,000,000 | |||
| IOU Financial | $91,300,000 | $107,600,000 | $146,400,000 | $100,000,000 |
*Asterisks signify that the figure is the editor’s estimate
OnDeck CFO Moves On After 10 Years
March 13, 2018OnDeck announced yesterday that its CFO, Howard Katzenberg, would be leaving on March 26th and is being replaced by Kenneth A. Brause. An OnDeck spokesperson told deBanked that Katzenberg’s departure is completely amicable.
“[Katzenberg] is still a young man and he’s looking to make the next mark in his career,” the spokesperson said.
Katzenberg started with OnDeck in 2008 as one of its first employees. He will stay on as an advisor through the middle of April to guarantee a smooth transition. Brause, his replacement, has more than 30 years of experience in the financial services industry and currently works as Executive Vice President & Treasurer at CIT Group.
Thinking Capital Acquired by Canadian Finance Firm Purpose Financial
March 12, 2018
Thinking Capital, a leader in the fintech lending industry in Canada, was acquired last week by Canadian finance company, Purpose Financial, based in Toronto.
“Under the Purpose Financial umbrella, our time to market on product innovation and funding capacity will be greatly amplified,” said Jeff Mitelman, CEO and co-founder of Thinking Capital.
Mitelman, who co-founded Thinking Capital in 2006, has long been an advocate for improving the way small business credit is evaluated and communicated in Canada.
“The challenge in Canada is that our lending institutions historically either don’t lend to small business or don’t lend to enough of our small businesses,” Mitelman told deBanked. “And that’s driven by the fact that so many of the measures of small business credit worthiness simply don’t exist. Our credit bureaus don’t report on it, there aren’t metrics or scores unique to small business, and most significantly, small business credit has never been attached to retail or institutional conduits for funding.”
This is where Purpose Financial comes in. Mitelman believes that Purpose Financial’s investment arm and its relationship with Omers, a large Canadian pension fund, will provide small businesses with “access to conduits that historically small businesses have never been able to access.”
Thinking Capital provides an MCA product, which it calls Flexible, as well as a term product, which it calls Fixed. It also helps power loans provided by large companies like Staples.
Purpose Financial has three verticals: Investment Management (retail and institutional), Digital Technology, and Capital / Funding.
“Thinking Capital is a clear leader in the small to medium-sized business lending space…” said Som Seif, CEO of Purpose Financial. “[And] this acquisition brings together leading origination, asset management, and technology platforms as a unified entity, and enables us to bolster our product capabilities and optimize the technology, distribution, and funding model of our combined business.”
CIT Group Appoints Factoring Veteran for Southeastern Region
March 2, 2018CIT Group Inc. announced today the appointment of Jerry Younts, a factoring veteran, to its Commercial Services team.
According to Textile World, Younts will serve as Senior Business Development Officer. He will be responsible for offering factoring and asset-based financing services to furniture, textile, and floor covering manufacturers, among others, mostly in the Southeastern United States.
“CIT is continuing to build a best-in-class team to provide factoring and other financing options to Southeastern manufacturers and importers,” said Mike Hudgens, Southeast regional manager for CIT’s Commercial Services group. “We are pleased to welcome Jerry to our lineup of experts.”
The New York City-based public company also has a corporate office in Livingston, NJ and provides an array of financing alternatives including SBA loans and Syndicated loans.
Prior to CIT, Younts worked most recently as Senior Vice president at BB&T Commercial Finance in its factoring group. Before that, he was Senior Vice President at AdvanedAR, a Charlotte, NC-based AR company.
Yellowstone Capital Funded $51 Million in February
February 28, 2018A company email circulated by Yellowstone Capital on Wednesday said that they originated $51 million in funded deals for the month of February. That brings their 2018 YTD total to $111 million.
Yellowstone Capital is based in Jersey City, NJ.
Coral Capital Solutions Expands in the Midwest
February 26, 2018Coral Capital Solutions, which provides AR financing, among other financing solutions to small and mid-sized businesses, announced today that it is expanding its business in the Midwest. In this effort, the New York-based company has hired Bob Hinson as Regional Sales Manager, VP. Hinson will be based in Chicago and will be tasked with building Coral Capital’s relationship with community and regional banks, as well as lenders, workout groups, accountants, attorneys, financial advisors and other referral sources, the company indicated.
“Bob has a long and distinguished career within the factoring community,” said Jim Bertie, Chief Operating Officer of Coral Capital Solutions. “His expansive knowledge and management background will add considerable bench strength to our expanding Midwest client base, helping to educate and support businesses about the tremendous benefits in alternative funding,” he said.
Bertie told deBanked that the company doesn’t have a very large presence in the Midwest and that hiring Hinson is an effort to build business in that part of the country.
Prior to joining Coral Capita Solutions, which was founded in 2008, Hinson held senior level positions at factoring and asset based lending companies. Most recently, he worked as Vice President and Regional Sales Manager at Bay View Funding, a Chicago-based factoring company.
