Industry News
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/
deBanked to Attend FundKite ISO Event at Met Life Stadium Nov. 2nd
September 29, 2017
It’s unlikely the New York Jets will be dreaming of the Super Bowl come November 2nd when they play the Buffalo Bills, but MCA company FundKite is hosting a VIP event for select ISOs/brokers at Met Life Stadium in East Rutherford, NJ that day.
According to FundKite, sales reps that hit certain funding targets will be invited to join the actual football players on the field for the pre-game warmup. The company is also offering attendees 50-yard line seats and complimentary food and beverages.
The catch is that reps have to fund more than $150,000 or $300,000 with FundKite before October 26th. Reps outside the Tri-State area will be flown in, courtesy of the company.
deBanked’s Sean Murray will be in attendance.
For more information, contact FundKite at isorelations@fundkite.com
Confidence in MCA and Online SMB Lending Industry Ticks Up
September 26, 2017The latest industry CEO survey conducted by Bryant Park Capital and deBanked showed that confidence in the continued success of the SMB lending/MCA industry is coming back. Confidence had a hit a low of 73.8% in Q1 of this year, the lowest point since the survey started in 2015. In Q3, the number jumped up to 81.3%.
Confidence in being able to access capital at a reasonable cost to grow ticked up only slightly to 79.9%, up from its lowest point in Q1 this year at 78.7%.
The first quarter of 2016 holds the confidence record since the surveying began. Coincidentally, that period is widely considered to be the peak of the online lending bubble. An April 2016 blog post published during that year’s annual LendIt Conference declared an end to the euphoria.
While respondents to the most recent survey were not asked to explain their confidence level, factors like a steady regulatory climate and some recent competition-reducing consolidation likely played a role in the boost.
Bizfi Survives, Thanks to World Business Lenders Asset Purchase Deal
September 22, 2017
The Bizfi marketplace is slated to live on, according to Stephen Sheinbaum who joined World Business Lenders (WBL) as a managing director in July. On Wednesday, WBL purchased several assets from Bizfi including the brand, the marketplace, the Next Level Funding renewal book, and other related pieces of the company, he says. Sheinbaum founded Bizfi (then Merchant Cash and Capital) in 2005.
WBL, a Jersey City-headquartered small business lender will also be a lender on the platform.
Other key Bizfi personnel have joined WBL including former Managing Director of Renewals John BellaVia, VP of Sales Michael Caronna, and Sales Manager Ryan Bressler.
The asset purchase does not affect the deal forged with Credibly to service the $250 million portfolio, Sheinbaum explains, which is separate.
While lesser known among the mainstream fintech media, WBL has been a stalwart player in the non-bank lending industry for years. Their ambitions and size became more apparent when deBanked attended their invite-only annual shareholder meeting at the Waldorf Astoria in NYC in 2015. The company went on to open a massive office in Jersey City in July 2016 that was attended by Jersey City Deputy Mayor Marcos Vigil, Councilwoman Candice Osborne, Archbishop David Billings and Mitchell Rudin, the CEO of Mack-Cali. At the ceremonial ribbon cutting, WBL CEO Doug Naidus said that he wanted to build a company that lasts, one that he can look back on and be proud of.
Now with the Bizfi brand and marketplace in tow, the company is uniquely positioned.
“[It’s a] game changer here,” Sheinbaum said. “2.0 here we come!”
