Industry News
Trial in Murder of Universal Merchant Funding Execs to Begin Feb 5th
January 7, 2018Nearly one year ago, Michael Genovese, the owner of Universal Merchant Funding, and Carl Clark, an employee, were found dead inside the businesses’s office in Staten Island. Former employee Ricky Dennis was arrested soon after for the double-murder. His trial is slated to begin on February 5th, according to SI Live.
Dennis had previously served time in prison for using a gun during a violent crime.
Genovese was a known operator in the small business finance community. Clark was a regular on the Daily Funder forum, and for a time was one of its most active users.
Yellowstone Capital’s Donations Help Volunteer Ambulance Corp Upgrade Equipment
December 15, 2017Hatzalah of Union County, a volunteer ambulance company in New Jersey, was able to secure a new digital communications system, thanks to a fundraiser held by Yellowstone Capital this week. Throughout the past six years, Yellowstone Capital has been by far the largest donor to Hatzalah with total donations exceeding $300,000, according to a press release.
Hatzalah Chief Yudi Abraham said, “There is no doubt that Yellowstone Capital is partners in our lifesaving mission. With their support, we are able to continue providing the utmost in care for our patients. Both our community and our entire squad are forever grateful for their constant support.”
Yellowstone Capital Funds $100 Million Over Last 60 Days
December 1, 2017An email circulated by Jersey City-based Yellowstone Capital yesterday, confirmed that the company had originated $50 million in deals for the month of November. The figured tied the record set in the previous month, bringing the 60-day total to $100 million.
Two sales representatives ended up in a tie for top performer of the month, each originating $4.65 million. Juan Monegro, whom deBanked interviewed almost two years ago, was right behind them at $4.55 million.
Update: PayPal Acquired Swift Capital for $183M
October 30, 2017According to a filing with the SEC, PayPal acquired Swift Capital for $183 million.
We completed the acquisition of Swift Financial Corporation (“Swift Financial”) in September 2017 by acquiring all of the outstanding shares for a total purchase price of approximately $183 million. We acquired Swift Financial to enable us to enhance our underwriting capabilities and strengthen our business financing offerings, helping us to deepen relationships with our existing merchants and expand services to new merchants. The allocation of purchase consideration resulted in approximately $44 million of technology and customer-related intangible assets with an estimated useful life of 1 to 3 years, $173 million of merchant receivables, net liabilities of approximately $139 million and initial goodwill of approximately $105 million, which is attributable to the workforce of Swift Financial and the synergies expected to arise from the acquisition. We do not expect goodwill to be deductible for income tax purposes. The gross contractual merchant receivables acquired are approximately $213 million. Management estimates that the cash collected will approximate the contractual amounts of merchant receivables. The allocation of the purchase price for this acquisition has been prepared on a preliminary basis and changes to the allocation to certain assets, liabilities and tax estimates may occur as additional information becomes available.
Source: http://files.shareholder.com/downloads/AMDA-4BS3R8/5480917220x0xS1633917-17-171/1633917/filing.pdf
Catching Up With Online Lending – A Timeline
October 21, 20177/17
- Online lender Upgrade, launched by former Lending Club CEO Renaud Laplanche, revealed it had already hired about 100 people
- Credit risk startup James closed $2.7M funding found led by Gaël de Boissard
7/18 – Former Bizfi COO Tomo Matsuo joined iPayment as an SVP to oversee its new merchant cash advance division
7/21 – SoFi Chief Revenue Officer Michael Tannenbaum departed the company
7/27
- Lending surpassed $500M in lifetime originations
- RealtyShares acquired marketplace platform Acquire Real Estate
7/28
- Former MB Financial Bank SVP Stan Scott became VP at Gibraltar Business Capital
- Prosper Marketplace shut down its Prosper Daily (formerly BillGuard) app
7/31 – First Associates Loan Servicing announced the opening of their new 1000-seat capacity operations center in Baja California, Mexico
8/1
- Ron Suber joined Credible.com as executive vice-chairman and a member of the board of directors
- PeerStreet integrated with Personal Capital
8/2
- Lending Loop raised $2M, launched automated investment platform
- PeerIQ secured $12M in Series A round
- OnDeck partnered with Payment Source in Canada
- Bread raised $126M in equity and debt
8/3 – Kabbage secured $250M in Series F round from SoftBank Group, was valued at more than $1.25B
8/9
- Former Capital One VP Heather Tuason became Chief Product Officer at StreetShares
- PayPal acquired Swift Capital
8/10 – Coinbase raised $100M at $1.6B valuation
8/11 – Former SoFi employee raised Brandon Charles filed a lawsuit against the company alleging among other things that he witnessed sexual harassment in the workplace
8/14
- Prosper closed $500M securitization, announced $775M in Q2 loan originations, $41.4M net loss
- Bitcoin surged past $4,000
8/15 – iPayment announced the formation of its new merchant cash advance division, iPayment Capital
8/16 – Fifth Third Bank made another equity investment in ApplePie Capital, agreed to purchase loans through the company’s marketplace
8/19 – Former CFO of Credibly became president of Western Funding
8/22 – Former SoFi employees filed a lawsuit against the company over wage issues
8/23 – Ellevest raised $32.5M
8/24 – AutoFi raised $10M in Series A
8/25 – Rep. Maxine Waters called for a congressional hearing on SoFi’s bank charter application and ILC charters in general
8/29 – Snap Finance secured $100M credit facility
8/30
- IOU Financial announced Q2 originations of $26.2M (US) and a net loss of $2.08M (CAD)
- ShopKeep launched ShopKeep Capital, a merchant cash advance service
8/31 – Bizfi wound down operations, sold servicing rights to its $250M portfolio to Credibly
9/2 – Bitcoin surpassed $5,000
9/5 – Former Chief Sales Officer of OnDEck, Paul Rosen, joined CoverWallet as COO
9/6 – Square revealed that they would apply for an ILC charter, following in the footsteps of SoFi
9/7
- Former Director of External Sales at OnDeck, Jared Kogan, joined Pearl Capital as Chief Revenue Officer
- First Internet Bank announces strategic partnership with Lendeavor, Inc.
9/11
- SoFi CEO Mike Cagney announced he had resigned as board chairman and would be resigning as CEO later in the year
- Lenda raised $5.25M Series A
9/12
- Groundfloor announced $100M loan purchase agreement with Direct Access Capital
- Orchard unveiled its Deals platform
- JPMorgan CEO Jamie Dimon called Bitcoin a fraud for stupid people
9/13 – dv01 closed $5.5M Series A
9/14 – SmartBiz surpassed $500M in lifetime SBA loan originations
9/15
- Amid more negative press, SoFi CEO Mike Cagney announced he was resigning as CEO immediately
- Enova announced $25M share repurchase program
9/20 – World Business Lenders acquired strategic assets of Bizfi including the company’s brand and marketplace
9/22 – Prosper Marketplace raised $50M in a Series G round at a 70% lower valuation of $550M
See previous timelines:
5/17/17 – 7/11/17
4/6/17 – 5/16/17
2/17/17 – 4/5/17
12/16/16 – 2/16/17
9/27/16 – 12/16/16
Payday Lending King Scott Tucker Convicted
October 14, 2017
One year after a federal judge awarded a record-setting $1.3 billion judgment to the FTC against Scott Tucker for damages caused by his payday lending empire, a jury in the Southern District of New York found him guilty on criminal charges that include participating in a racketeering enterprise through the collection of unlawful debt, wire fraud, money laundering, and violations of the Truth In Lending Act.
Tucker and another defendant, who happened to be his attorney in the scheme, are set to be sentenced on January 5th. He will remain on house arrest until then. Tucker is facing more than 20 years in prison. He is 55.
Among the luxuries Tucker spent his ill-gotten gains on were his professional racing hobby. His auto racing team, Level 5 Motorsports, participated in international tournaments and won 4 championships. The feds auctioned off his race cars that included two Ferraris and a Porsche earlier this year.
According to the DOJ:
TUCKER devised a scheme to claim that his lending businesses were protected by sovereign immunity, a legal doctrine that, among other things, generally prevents states from enforcing their laws against Native American tribes. Beginning in 2003, TUCKER entered into agreements with several Native American tribes (the “Tribes”), including the Santee Sioux Tribe of Nebraska, the Miami Tribe of Oklahoma, and the Modoc Tribe of Oklahoma. The purpose of these agreements was to cause the Tribes to claim they owned and operated parts of TUCKER’s payday lending enterprise, so that when states sought to enforce laws prohibiting TUCKER’s loans, TUCKER’s lending businesses would claim to be protected by sovereign immunity.
At trial, the jury wasn’t fooled. Read the full DOJ report here.
Mayor Rahm Emanuel Cuts Ribbon for 160% APR Online Lender
October 11, 2017Chicago Mayor Rahm Emanuel cut the ceremonial ribbon at OppLoans’ new headquarters in Chicago this week. The APR of a typical installment loan is 160% APR in many states, according to the OppLoans website. In South Carolina, a typical loan is listed as 199% APR over 9-18 months.
Today we cut the ribbon on @OppLoans' new office in Chicago. pic.twitter.com/SAROJfCTcE
— Mayor Rahm Emanuel (@ChicagosMayor) October 9, 2017
According to a press release, Emanuel said “While for a lot of people outside this room, this may be the first time they’ve heard of OppLoans. There is no doubt in my mind this will not be the last time they’ve heard of OppLoans. I look forward to being back as you scale more mountains, more heights, and continue to grow and to be successful, and to offer financing to a lot of families.”
While OppLoans offers consumer loans, Emanuel has previously attacked small business finance products with lower costs than OppLoans as predatory. Perhaps he has reevaluated his understanding of APR.
Broker Fair 2018 – The Inaugural Conference for Merchant Cash Advance and Business Loan Brokers
October 5, 2017
New York, NY – Foinse, LLC, in collaboration with deBanked, is excited to announce Broker Fair 2018, the inaugural conference for merchant cash advance (MCA) and business loan brokers. Broker Fair 2018 is being held at The William Vale in Brooklyn on May 14, 2018. It will be the largest gathering of MCA and business loan brokers in the country.
This exclusive one-day event in New York City’s most vibrant and creative corner will offer brokers, lenders, funders, and service providers opportunities to learn, connect, and grow their businesses.
Broker Fair founder and deBanked Chief Editor Sean Murray, said “Online business lenders, MCA providers, and independent brokers employ thousands of salespeople to connect business owners with sources of capital. There are numerous products, tools, and resources out there now but the landscape remains fractured. Through Broker Fair, I want to empower the salespeople, empower the brokers. They’re the ones on the frontlines with America’s small business owners. I’ve been covering this space for seven years and was actually an MCA broker myself prior to that. I know the industry. A lot of folks and companies want to be successful but I know that they also want to have a positive impact on their customers and the industry they’re a part of. I want to facilitate that and more at Broker Fair.”
The three central tenets of the conference will be education, inspiration, and opportunities.
Registration is already open at http://brokerfair.org/pages/register/
To become a sponsor or inquire about the benefits of sponsorship, contact info@brokerfair.org or call 917-722-0808. Event sponsors can be viewed at: https://brokerfair.org/sponsors/
About Foinse, LLC
Foinse, LLC is an events company and the owner of Broker Fair 2018. For more information, visit: https://brokerfair.org/
About deBanked
deBanked® is a registered trademark of Raharney Capital, LLC and is the name of a print and online publication that has covered alternative finance including merchant cash advance and online business lending since 2010. deBanked is a presenting partner of Broker Fair 2018. For more information, visit: https://debanked.com/
