Industry News
LendingTree 4Q & Full Year 2017 Earnings Released
February 24, 2018LendingTree reported its fourth quarter and full year 2017 results on Thursday. The company’s fourth quarter revenue of $161 million is an increase of 60 percent year-over-year. However, the fourth quarter adjusted net income per share was six cents shy of analysts’ expectations, which caused the company’s stock value to drop by eight percent after the report was released, according to CNBC.
Meanwhile, LendingTree’s GAAP Net Loss from Continuing Operations was $6.5 million. CEO and Chairman Doug Lebda said that this loss reflects a $9.1 million revaluation of the company’s deferred tax assets resulting from recent changes in the tax law that lower its overall tax rate. This, along with a one-time $10 million commitment to establish a charitable foundation.
“Given our recent success,” Lebda said, “we are pleased to be in a position to give back to the community through this foundation, and we look forward to sharing more details with our stakeholders as the foundation develops.”
Revenue for the full year 2017 was $617.7 million, an increase of $233.3 million, or a 61 percent increase over 2016 full year revenue.
“In addition to growing full-year revenue…” Lebda said, “ 2017 was transformational in several ways. We more than tripled our size in the strategically important and highly competitive credit card business [and] our mortgage business grew 25 percent year-over-year in a category where originations were down 17 percent according to industry estimates.”
BFS Capital Secures $175M Revolving Line
February 20, 2018
BFS Capital has secured a new $175 million revolving credit facility from funds managed by Ares Management, L.P. (NYSE:ARES), according to a company announcement. Stephens Inc. acted as financial advisor to the transaction.
ARES is one of the largest global alternative asset managers with $106.4 billion under management. They previously announced a $100 million line for LendingPoint, an online consumer lender.
BFS Capital also recently announced that 2017 was their biggest year yet. They generated more than $300 million in originations for the year.
BFS Capital plans to use the new facility to accelerate the growth of its lending business.
“The market continues to appreciate our small business customer focus,” said BFS Capital CEO Michael Marrache in a prepared statement. “Our strategic partners, such as ISOs, also commend us for our data and underwriting expertise—based on 15 years of financings across multiple economic cycles—which enables us to better anticipate the future performance of our financings.”
Abe Zeines, Jennie Villano ‘Cook Up’ Buzz
February 13, 2018Abe Zeines, of former MCA infamy, is cooking up something new, according to a video that was posted on LinkedIn earlier today. The 2-and-a-half minute clip was produced by Jennie Villano, a top social media marketer who serves as the VP of Business Development at Kalamata Advisors.
Villano was spotlighted for her notable online marketing acumen in a deBanked story last December.
In this for-fun video, Zeines appears to put spaghetti noodles into an empty pot.
Did he win the cooking challenge?
Behalf Secures $150 Million in Debt Capital
February 8, 2018
Behalf, the New York City-based alternative business loan company, obtained $150 million in debt financing this week from a private investment fund managed by Soros Fund Management LLC. Viola Credit also participated in the debt financing.
“This is a significant step forward for Behalf. This funding allows us to expand our fast-growing e-commerce B2B financing platform and enhance our ability to provide the best business terms to customers, in a fraction of the time of a traditional business lender,” said founder and CEO of Behalf, Benjy Feinberg.
The company, founded in 2012, initially started doing MCA only and is now transitioning to offer loans, according to Feinberg.
Behalf’s business model works in the same way as a credit card. The small business customer doesn’t receive money from Behalf. Instead, Behalf pays the vendor of its small business customer directly, and then the customer pays Behalf. Customers pay different rates depending on their risk profile.
As an analogy for the business model, Feinberg told deBanked: “If you give a kid $50,000, he could go to Vegas. If you give the college $50,000, the kid goes and gets an education.”
With Behalf’s transition into loans, the company partnered with FinWise Bank, a Utah-chartered bank, in August of last year. Behalf, which also has an office in Tel Aviv, has a virtual MasterCard feature that allows its customers to use their Behalf credit line to fund purchases across the MasterCard network.
The company has a total headcount of about 90 between its two offices, according to Feinberg.
Responding to Demand, BlueVine Increases Factoring and Business Credit Lines
February 6, 2018Invoice factoring and small business loan company, BlueVine, recently doubled its credit line size for its invoice factoring product up to $5 million. Simultaneously, it has also increased its business line of credit maximum to $200,000, from $150,000.
“The number one [reason for the expansion] has been an increase in demand from our existing customers,” said BlueVine Chief Revenue Officer Eric Sager.
He said they had granted higher lines of credit to some customers who asked for it, and when BlueVine saw success, it decided to make the higher credit available to all customers.
The Redwood City, CA-based company was founded by Eyal Lifshitz in 2013 as a factoring company, but it has since offered small business loans, which Sager told deBanked now accounts for about half of the company’s revenue.
Last year, BlueVine introduced a 12-month line of credit based on monthly payments. Previously, they had only offered a 6-month business line of credit, called Flex Credit, based on weekly payments. Sager that said that many BlueVine customers use the company’s factoring services as well as its credit line offering.
“The reason why [this increase in credit] is so important is because it allows customers to use our line of credit facility not just for working capital…but now for capital expenditures as well,” Sager said.
Many alternative lending companies boast of using sophisticated technology to almost instantly issue loans or credit lines. While Sager said that BlueVine does use sophisticated technology, he said they also use reliable industry standard technologies and that they have a dedicated account management team that customers can reach out to, particularly large ones.
One of Sager’s favorite slogans that he applies to BlueVine is: “Always available, never needed.”
6th Avenue Capital Builds Business Development Team with Veteran Hires
February 6, 20186th Avenue Capital has hired three seasoned employees to its business development team: Mitch Levy, Gary Lockwood and Marc Seidel.
Chief Operating Officer
“We’re putting together a team that I wanted to put together,” said Chief Operating Officer Darren Schulman. “They didn’t come knocking on my door, I knocked on theirs.”
This is part of an expansion of the New York-based company, which launched formally in 2016 and was reorganized in April 2017 with the hiring of Schulman.
Strategy Officer
Mitch Levy, who used to work with Schulman at AmeriMerchant (now known as Capify), will oversee the company’s business origination strategy. Levy joins the company with more than three decades of alternative financing experience across multiple disciplines including origination, underwriting, investing, operations and legal.
“6th Avenue Capital has quickly established itself as a major force in the Merchant Cash Advance business,” Levy said. “In this role, I have a great opportunity to work closely with the leadership team and our strategic partners to help small businesses across the country gain fast and efficient access to capital in times of immediate need.”
Business Development Manager
Gary Lockwood, who also worked with Schulman at Capify, joins 6th Avenue Capital as Business Development Manager. He built and led a successful consulting business where he opened several business financing sales offices. Lockwood was a Senior Vice President of Partnerships at Fundation and worked at Capify as Director of Business Development with responsibility for onboarding, managing and training broker and partner groups.
VP Business Development
Schulman has never worked with Marc Seidel, but told deBanked that he knew of him and came highly recommended by Levy. Seidel will be 6th Avenue Capital’s Vice President of Business Development. Previously, Seidel spent more than 10 years working at Bizfi, where he started his career in the alternative financing industry as a Risk Analyst. He then worked his way up to a Senior Underwriter position and landed a business development role where he was responsible for managing relationships with brokers and driving deal demand.
Chief Executive Officer
“Adding these industry veterans in business development will undoubtedly advance our mission to expand our existing network of ISOs and other strategic partners to ensure small businesses have access to capital in hours,” said 6th Avenue Capital CEO Christine Chang.
Schulman takes pride in assembling a veteran team that does the right thing by clients, he said.
“We don’t want to give merchants more money than they can afford,” he said.
He said the the company now employs 20 and is growing.
“We’re looking to form long-term relationships with brokers and merchants and we’ve been successful at getting merchants to refer us to other merchants.”
LendingPoint Hires Citibank Veteran as New CFO
February 1, 2018
LendingPoint, the Atlanta-based online balance sheet lender, announced today that Citibank veteran Tony Martino would be joining the company as CFO. This comes less than one month after the company’s acquisition of LoanHero, a fully integrated, one-stop-shop loan origination and payments platform. LoanHero helps merchants provide access to consumer finance, increase revenue and eliminate friction at point of sale.
Martino, who worked at Citibank for 18 years in multiple roles including CFO for the bank in Israel and Turkey, said he thinks that LendingPoint’s acquisition of LoanHero “triples the size of the markets available to us.”
LendingPoint focuses on making loans to what it calls “near prime” consumers. The company defines “near prime” to include personal-loan applicants with FICO scores from 600 to 700, according to an earlier discussion with deBanked. LendingPoint has even trademarked “NEARPRIME” as a single word in all capital letters.
The company’s CEO, Tom Burnside, told deBanked in the fall that it received $2.5 billion worth of loan applications in September alone.
“We are delighted to add Tony Martino to our team at LendingPoint,” Burnside said. “His deep experience with multi-product balance sheet lenders as well as his experience in rapidly growing markets match perfectly with where we are in our journey at LendingPoint.”
LendingPoint is not yet four years old and this will be Martino’s first time working at a startup. He told deBanked that he’s very excited about this challenge, but acknowledged that his work overseas in emerging markets, like Poland and Turkey, was a lot like working at a startup.
“Although [LendingPoint] is new,” Martino said, “the employees have a depth of experience here.”
In Wake of Fraudulent DocuSign Emails, How to Recognize The Real Thing
February 1, 2018
Fraudulent emails with DocuSign attachments have permeated the MCA business in recent weeks. Independent MCA broker and Small Business Banker Paul Kelly told deBanked that he received up to 15 emails over the last few weeks from both Edwin Torres and John Edwards at the MCA company RET Capital. The emails had an attachment that encouraged the reader to “View Document.”
Staff at deBanked also received similar emails from Edwin Torres on January 16 and from John Edwards on January 23. Suspicious of the email, Kelly didn’t open the attachment, which was wise. According to DocuSign’s Trust Center page, people should “not click on attachments within an email requesting your signature. DocuSign emails only contain PDF attachments of completed documents after all parties have signed the document.”
The page lists other signs that may indicate a fraudulent DocuSign email, such as misspellings or conveying extreme urgency.
When we asked Torres if he had intended to send these emails, he said he not. Instead, he said he was the victim of a virus from DocuSign, which was likely hacked, he said.
“This has ruined my life for the past few weeks,” Torres said.
He also urged people not to open the attachment, as he had, which allowed the virus to send emails from his email account. Torres said that other companies in the industry had also been affected by the virus. But he said that his company’s computers had been cleaned for the virus last week and, so far, he hasn’t received any complaints this week.
