Parafin Funded Over $3 Billion to Merchants in Five Years
October 1, 2026One of the key details revealed in the Stripe acquisition of Parafin is that Parafin originated $3 billion in funding since the company first started originating in 2021. Parafin supplied the financing infrastructure for platforms such as: DoorDash, Amazon, Gusto, SpotOn, Fullsteam, Jobber, and dozens more. Assuming the company experienced a normal growth curve, the company likely exceeded $1 billion in originations over the last 12 months, putting them roughly on pace with what Stripe’s own funding business was producing. deBanked previously estimated that Stripe Capital originated $1 billion in funding in 2025.
When the deal finally closes and Stripe Capital combines with Parafin, the resulting funding entity will rank among the largest online small business lenders in the country. Only Quickbooks Capital, Shopify Capital, OnDeck, and Square Loans will continue to be significantly larger, at least among the companies tracked by deBanked.
How to Pay Off an MCA With an SBA Under The New Rules Effective Oct 1
September 23, 2026The SBA has provided new guidance on its approach toward refinancing merchant cash advances: if you convert one to a term loan, you’ll have to wait a very long time to refinance it with an SBA.
According to the most recent Standard Operating Procedures that go into effect on October 1, “Sales-Based Repayment Agreements (e.g.; Merchant Cash Advances) are only eligible for refinancing if the original agreement has been converted to a term loan, has amortized for at least 24 months, and no additional Agreements have been implemented since the conversion of the prior agreement(s).” If there’s any uncertainty as to what that means, they go a step further and say “If the Sales-Based Repayment Agreement is still active, it is not eligible for refinancing.”
This is slightly different from last year’s SOP that said “merchant cash advances and factoring agreements are not eligible for refinancing.”
The new language was perhaps put in place to close a potential loophole where an MCA is converted to a term loan and then immediately refinanced by an SBA.
A Journey Through Collections With Erica Gilerman
September 8, 2026“Within two weeks, I closed my first deal. I just clicked in the industry,” said Erica Gilerman.
Gilerman wasn’t talking about funding a deal. She was talking about collecting on one.
“Closing the deal on our end means that we have a signed, sealed, and delivered stipulation, one that our client is happy with, and one that truly makes sense financially for the merchant as well,” she said.
Conventional wisdom in the small business finance industry has long held that anyone can put money out the door; getting it back is the hard part. Gilerman currently serves as Chief Legal Officer of that hard part, working for Triton Recovery Group in South Florida.
Talk to anyone at Triton and they’ll probably tell you that successful collection begins during the underwriting process, before a deal is ever funded in the first place. In a taped interview deBanked conducted with Triton CEO Leo Vargas in 2024, he said, “The underwriting process to me is the most important piece of getting a deal done in the industry.” Vargas offered examples, saying that it’s critical to know from the outset what merchants plan to use the funds for and that the terms of any deal should be set in accordance with a merchant’s anticipated receivables, not deposits.
Today, Triton has 75 employees. But when Gilerman was being recruited to work there in 2021, the company had only six. Vargas was looking to add an attorney to his then-fledgling traditional commercial collections firm, which was focused entirely on the merchant cash advance industry, and he posted an ad in the New York City market.
“I will never forget… it was very interesting to me because it was in all caps and it said ‘COLLECTIONS ATTORNEY, NEW YORK,'” said Gilerman.
She answered the ad, met Vargas in New York, and received an offer. There was just one catch: She had to spend a month training at Triton’s Miami office to learn its particular niche of collections. That required a significant sacrifice, time away from her family, but she decided to take a chance and then determine whether the job was right for her. She started in July 2021 as the firm’s General Counsel.
“Within two weeks, I closed my first deal. I just clicked in the industry,” she said. “Between my accounting background—I understand how the factor rates work, I understand how businesses operate, I take a very unique approach to everything in the sense that I will collect in a way where I put myself in the debtor’s shoes.”
Gilerman, the daughter of immigrants, was born in Brooklyn, New York, and she attended Madison High School in Brooklyn. She was accepted into the school’s law program, which had been created by former Supreme Court Justice Ruth Bader Ginsburg. Ginsburg, herself a Madison graduate, had created the curriculum.
“My love for law really kind of came to play there, and I learned a lot from that program,” Gilerman said, “and that’s why I’m very proud to say I’m a New York City public school graduate, and that’s how I fell into law.”
Gilerman faced a personal family tragedy as she began college at Pace University, around the same time Lehman Brothers collapsed. Pace’s campus in Downtown Manhattan had a front-row seat to the turmoil unfolding across the financial system.
“I will never forget that in that moment I realized I need to find a career that will not keep me into some sort of niche, because 25 years from now I could be one of those people that was carrying boxes,” Gilerman said, “and they had nowhere to go and nothing to do, and it was a very eerie dynamic being on Wall Street at the time.”
Gilerman initially intended to pursue a career in public accounting as a result but ultimately swerved back toward law. After becoming an attorney, she worked in employment litigation before moving on to collecting medical debt for hospitals in New Jersey.
“You have to have a specific type of personality to be in collections, especially as a woman,” she said. “I would candidly say I would never expect myself to be in collections. That was not my goal in law school, but I would not change it for the world now. This is exactly the niche industry I need to be in.”
Part of that certainty came from finding the right person to work with.
“I will say that I learned most of the MCA space, especially on the front end side, from Leo. He taught me the collections mindset for commercial collections, and we just clicked in a way that it was just a great synergy from the beginning.”
Triton was still quite small at the time. When Gilerman visited the company’s original Miami office, they had to set her up in the break room. By the end of 2021, however, the COVID lockdowns were finally beginning to dissipate nationwide, and the company hit the gas pedal by sponsoring a conference that December in New York: Broker Fair.
“We were able to expand and start hiring more after the very first deBanked [conference] that I attended, which was December of 2021,” Gilerman said.
By then, her mind was fully made up. She and her family moved to Miami two weeks after the conference. Five years and nearly 70 additional employees later, spread across two states (Florida and Texas), she has since become the company’s Chief Legal Officer.
In those early days, Gilerman was still trying to wrap her mind around the financial product Triton’s clients worked with. She said she came to really understand “that without the MCA industry, there is no such thing as a mom and pop shop anywhere in this country and it really changed my perspective of what alternative finance as a whole is.”
Triton’s collection practice handles MCA, commercial loans, and equipment financing on a contingency basis. Ask the team a question about underwriting and they’ll readily offer an opinion. They’re only interested in legally enforceable paper.
The latest frontier in collections includes dealing with merchants who have turned to LLMs to fire off letters, emails, and demands, often containing incorrect information or citations to the wrong statutes. It has become commonplace to see merchants effectively act as their own attorneys with the help of AI, or even claim that AI is representing them.
“I see a lot from ChatGPT and Claude there, and the problem is that they continue to just say the same thing over and over,” she said. “You could tell by the tone because no one’s actually telling them to make it sound like themselves.”
Even on phone calls, merchants may attempt to bring AI agents onto the line with them.
On the flip side, collectors can use AI too. In a recent social media post, Triton CEO Leo Vargas said, “The best agencies will use AI to eliminate repetitive tasks, improve compliance, analyze consumer behavior, optimize account placement and provide collectors with better insights before they ever pick up the phone. Collections has always been about people. AI simply gives those people better tools to succeed.”
Vargas also referenced Gilerman in an email to deBanked. “Five years ago, [Gilerman] took a chance on Triton and joined us during an important stage of our growth,” he said. “Since then, she has grown alongside the company and worked her way to becoming our Chief Legal Officer and a key member of our executive leadership team.”
“Collections, especially the MCA space, this is us playing chess,” Gilerman asserted. “And for us, a checkmate is getting that payment through the door, making our client happy, allowing our client to then redeploy those funds.”
Small Business Funders That Made the 2026 Inc 5000 List
August 11, 2026The 2026 Inc 5000 list is out. Below are some of the familiar names that appeared from the financial services category:
(did we miss you? email us at info@debanked.com to be added!)
Shopify: “Capital was a larger driver this quarter”
August 6, 2026Shopify Capital originated $1.4B in small business loans and merchant cash advances in Q2.
“Capital was a larger driver this quarter, while loss rates in payments and credit are both at normalized levels,” said Shopify CFO Jeff Hoffmeister during the Q2 earnings call.
Beginning in April of this year, Shopify replaced its MCA product in Canada with a loan product in response to new regulations from 2025. It did not elaborate in the Q2 earnings on what specific regulations those were but it is possible they are referring to the amended national interest rate caps that went into effect on January 1, 2025. In a loan, an annualized percentage cost is determinable and controllable from the time the contract is made, whereas there is no predetermined controllable annualized rate on an MCA. Shopify disclosed that the main impact from switching from MCAs to loans in Canada was how it booked them in their financial statements.
How Scammers Could Defeat Your Time-In-Business Underwriting Requirements
August 5, 2026
The TIB checked out on the application and with the Secretary of State (SOS). The company had been in business for almost exactly five years—comfortably beyond the minimum underwriting guidelines. But its online footprint looked much weaker, almost as if the business had opened yesterday. Maybe it had. Or maybe the business did not actually exist at all, and the validated corporate records were simply part of a sophisticated fraud designed to slip past the gatekeepers.
But if something were really wrong, how could one explain the SOS-verified TIB?
“Ever heard of a Shelf Company?”
That was a question posed by Jamie Parker, CRO and co-founder of Heron Data.
A shelf company, or shelf corporation, is a legal entity that is formed, registered, and then placed “on the shelf” to age. At some point in the future, the entity may be sold, potentially allowing the buyer’s company to appear older than it actually is. Online forums such as Reddit, BiggerPockets, and CreditBoards contain years of discussion on the topic, including strategies, success stories, and failures.
According to Parker, there is a perception online that an older entity can provide a shortcut to obtaining business credit that a party might not otherwise qualify for. Anyone who follows the rabbit hole of shelf-company discussions will inevitably find websites that sell them.
Parker found himself on one such site. It listed the names of entities available for purchase along with their respective ages, and he became curious about what he could do with the information.
“I looked at that and so I went through all the archives, the Wayback Machine, I looked at all of the ones that had been sold in the last, like, five years,” Parker said.
He ran a test, searching Wayback Machine to determine which entities had been sold and whether any had later surfaced in the State courts as a defendant in a lawsuit with an MCA funder. He quickly found one: a business using a shelf entity that had received funding, defaulted, and was being publicly sued for breach of contract by three different funders.
“Time in Business, pretty much everyone has some policies,” Parker said. “The source of truth for Time in Business is considered to be the Secretary of State.”
Parker said that information alone may not be enough, given how freely advice about circumventing company-age requirements is proliferating online. It can be important to go one step further.
“So in the Secretary of State it will give you some information like when the business was formed, when control changed,” Parker said. “If whatever owner changed or the offices changed three months ago, that’s a flag. But you really have to get into the weeds for that.”
That is particularly true when underwriting teams perform every review manually. Parker noted that Heron’s technology can already retrieve that pertinent information as part of its system, however.
“…maybe you compare your Time-In-Business check with when the office has changed, and if the office has changed less than a year ago, that you’re probably not going to auto-decline, but you are going to want to just make sure that there hasn’t been like a significant change in control of the business,” he said.
Shelf companies are not a new phenomenon. In Parker’s view, however, the pace of underwriting in the small-business finance industry is rapidly approaching the speed of consumer lending. As automation begins to replace certain manual processes, seemingly minor tricks employed by applicants could derail the entire model.
For example, the buyer of a shelf corporation could use it to open a bank account and season that account with circular deposits and withdrawals over several months, creating the appearance of legitimate sales and expenses. In that scenario, there is a real legal entity with real bank statements, resulting in a more sophisticated form of fraud.
“You’re making faster and faster offers, you have less time for humans to look at stuff. This is the kind of thing that you’re going to get caught by,” Parker said.
In a social media post about the topic, Parker said, “Compare the transactions with the industry – if it’s a restaurant with only ATM deposits and checks, it merits further investigation. If you see lots of card deposits, that’s more likely to be safe. Look for signs of business activity – Facebook, Yelp, SAFER, whatever you would expect given the industry.”
Parker said Heron can automate those checks as well.
When it comes to company age, most scammers already understand that a corporation that does not exist—or one that was formed the night before—is unlikely to make it past the starting line.
“[Criminals] know funders care about Time In Business, they know funders care about revenue quality or whatever, and gaming that system,” Parker said. “So… you’ve got to be more proactive if you want to kind of keep up, because automation opens the door to more of this fraud.”
Underwriting Canadian SMB Loans and MCAs? You Still Need to Watch Out for Fraud
August 4, 2026
Back in February, Trust Science acquired Lenders API, a real-time fraud-prevention and consortium-data platform developed in collaboration with the Canadian Lenders Association and its small business, consumer, and automotive finance members. The platform is designed to address bust-out fraud, synthetic identity fraud, and loan stacking. Not all “stacking” is fraud, of course, but a recent deBanked feature reported that stacking business loans and MCAs is certainly on the rise.
“No single lender can solve this problem alone,” said Tal Schwartz, co-founder of Lenders API, when the acquisition was announced. “Loan stacking and organized fraud thrive in the gaps between institutions. The only effective response is shared intelligence delivered through a compliant, trusted infrastructure.”
But wait—fraud? In Canada? According to a 2022 BBC feature, one of Canada’s defining characteristics is its “deep reservoir of niceness.” Those on the front lines in finance, however, say fraud happens there just as it does anywhere else.
“It’s quite a wild west,” said YaMing of Xuper Funding, a small business finance company that operates in both the United States and Canada. “…compared to the United States I would say it’s almost the same level of fraudulent files.”
“…my gut is going to be that it’s probably on par, relatively speaking [with the US],” said Jodi Levy, Head of Sales and Business Development for BizFund in Canada. Levy added that underwriting applications in Canada involves many of the same checks conducted by American companies regardless.
“I think the general idea is literally the same,” said Alex Xu, CEO of Xuper Funding, who works with YaMing. “It’s still against the revenue, it’s still about checking the fundamentals, checking the anti-fraud, so the procedures are literally the same.” The challenge, according to Xu, is that Canada’s credit-reporting infrastructure is not as mature as that of the United States. Data sources and access can also vary by province.
And it can be even more difficult to make a proper evaluation when a business owner has recently emigrated to Canada and has not had the same opportunity as a native-born citizen to build a public credit footprint over time. Twenty-three percent of Canadians are immigrants, for example, and that figure could rise to 34% by 2041. The total population of Canada today numbers around 41 million people.
Levy of BizFund said one advantage of operating in a smaller market is that news about fraud travels quickly, especially when a broker is involved. Discussing a hypothetical case involving an altered financial document, she said “It just wouldn’t fly. You’d be blacklisted so fast.”
In a sense, Lenders API was founded on that principle of sharing: The industry took fraud prevention into its own hands by creating a system through which participants could identify and report suspicious activity to one another. The company that acquired it, Trust Science, “is Canada’s third and most modern credit bureau,” according to its website.
Similarly, bad deals, like fraud, can also be reported through DataMerch, a U.S.-founded platform that also relies on members to report negative business dealings. Launched in 2015, DataMerch accumulated 100,000 records of unsatisfactory U.S. MCA deals by January 2023 and is still growing. Today, its database also includes Canadian businesses as well.
“Our Canadian search/merchant upload is based off the 9-digit Business Number,” said Scott Williams, co-founder of DataMerch. “Canadian funders can search by Business Number or legal name.”
Several companies that spoke with deBanked said defaults on Canadian business loans and MCAs can occur for many reasons, some fraudulent and some not. Certain forms of fraud can be nearly impossible to detect because the paperwork is authentic, the business is legitimate, and the only hidden element is the applicant’s intent to disappear as soon as the deal is completed. The fraud, in those cases, is in their mind.
But the Canadian market is not defined solely by fraud, nor is any market. There is plenty of good business and plenty of good deals, often beginning with strong broker relationships.
“If you have a good ISO partner to work with, they’re going to be transparent with you,” said Xu of Xuper Funding. “They’re going to work with you, they’re going to be very collaborative with you, and they’re going to syndicate with you. And that’s the ISO we really cherish and value.”
For Levy of BizFund, transparent communication begins at the outset.
“When I’m onboarding people, I kind of like to do the work upfront to make sure I understand,” she said. Although BizFund remains mindful of fraud and the warning signs that accompany it, Levy said that ultimately “the market is a lot of fun, there’s a lot of room to have an impact.”
Lightspeed: Merchant Cash Advance Business Key to Delivering Long-Term Shareholder Value
July 31, 2026“For us, it’s really about where we are investing to deliver long-term shareholder value,” said Lightspeed CFO Asha Bakshani during the company’s FY Q1 2027 earnings call. “For now, that is really the Merchant Cash Advance business and returning cash to our shareholders through buybacks.”
Lightspeed described MCA as a “high-margin business” that has grown for them by 56% year-over-year.
“Aside from the potential share buyback, our largest use of cash will be the continued growth of our Merchant Cash Advance program,” Bakshani said. “There were $160 million in MCAs outstanding at the end of the quarter, and we intend to continue expanding this high-margin program over time. As we grow the program, we remain disciplined in our underwriting, and default rates have stayed consistent in the low single-digit range, which gives us confidence to continue expanding.”
