Announcements
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.”
Lendr Announces Vegas Contest Winner
February 16, 2018
A Las Vegas contest marketed to ISOs by Chicago-based Lendr was a success, according to the company. Lendr revealed the first prize winner of a Vegas trip for 4 (valued at $7,500) to be iAdvance Now.
One Way Funding and Fast Cash Team won second and third place and cash prizes of $2,500 and $1,500 respectively.
Lendr had marketed the campaign through several channels including deBanked late last year.
Eddie Hamid, iAdvance Now’s president, said “Working with Lendr over the past few months has been an amazing experience.”
“Winning a trip to Vegas was a nice surprise, being rewarded for working with such an amazing team was even a bigger surprise,” Hamid said of their win. “Thank you from the iAdvance Now team, we appreciate all the hard work and efforts Lendr has provided and continues to provide.”
SmartBiz Becomes the Number One Provider of SBA Loans Under $350,000
February 14, 2018
SmartBiz Loans announced today that it was the number one facilitator of SBA 7(a) loans under $350,000 for the 2017 calendar year, surpassing JP Morgan Chase.
“I think the biggest factor [in hitting this milestone] is that we have been laser focused on meeting the needs of small business customers in the U.S.,” SmartBiz CEO Evan Singer told deBanked.
SmartBiz facilitated $329 million in funded SBA 7(a) loans for $350,000 or less for the 2017 calendar year while JP Morgan Chase generated $322 million, putting it in second place. SBA loans (the acronym stands for Small Business Administration) are guaranteed by the U.S. government. Traditional SBA 7(a) loans, which SmartBiz focuses on, are backed by the government 75 to 80 percent, according to Singer, while 7(a) Express loans are only backed 50 percent, making the interest on those loans higher. Previously, SmartBiz was number one in funding SBA 7(a) loans, excluding Express loans. Now it leads in both categories.
The San Francisco-based company was incubated by PayPal and launched in 2010. Originally, it was a consumer credit platform, but then pivoted to the small business space in 2012 and started facilitating SBA loans in 2013, Singer said. The company sold off its consumer business and is now exclusively devoted to facilitating SBA loans, which typically have a repayment term of 10 years for a loan of $350,000 or less.
SmartBiz has made obtaining SBA loans easier for small businesses by making loan underwriting and origination easier for banks. The key has been technology. For instance, Singer said that many banks will not make small business loans for less than $250,000 because it isn’t profitable for them. Banks tell Singer that it takes the same amount of time to underwrite and originate a $200,000 loan as it does for a $2 million loan.
“So what we are focused on is [making] software to help automate the underwriting and origination process for banks so that smaller loans become profitable for them,” Singer said.
So far, this has been working. Singer said the company’s partner banks tell them that they are able to reduce 90 percent of the costs on the retail side when looking at smaller loans. Some of SmartBiz’s partner banks include Celtic Bank in Salt Lake City, UT, First Home Bank in St. Petersburg, FL, and Five Star Bank in Sacramento, CA.
SmartBiz also has an office in Austin, TX and employs a little over 100 people.
Breakout Capital Hires New Chief Marketing Officer
February 14, 2018Small business lender Breakout Capital announced that it has hired James Mendelsohn to be its Chief Marketing Officer. Mendelsohn spent three years working as Chief Marketing Officer at CAN Capital.
“It’s an exciting time to be in the alternative lending space,” Mendelsohn said. “One of the biggest messages that the industry as a whole has to [communicate] is that this is still an underserved market. And that’s part of where Breakout is trying to make a difference – by introducing new products and services so that more small businesses can get access to credit and capital.”
The McLean, VA-based company was founded in 2015 by Carl Fairbank, a former investment banker. The company now has 40 employees.
“James was the perfect fit for where we are in the lifecycle of our business,” Fairbank said. “It’s an enormous addition to the team and sets us up even more favorably for success at faster and safer terms than our peers.”
Breakout Capital offers loans of up to $250,000 to be paid within two years or less. It also provides a product called FactorAdvantage, which helps factoring companies take on new clients. For instance, according to Mendelsohn, if a factor wants to take on a factoring client, but the client has existing MCAs or other loans, Breakout Capital can replace these with a new loan that makes it easier for the factor to advance against the invoices.
“As we continue to emphasize de-risking via a variety of methods, we’ve positioned our most attractive products to scale quickly, such as FactorAdvantage,” Fairbank said, “and James’ arrival couldn’t have come at a more ideal time.”
The majority of Breakout Capital’s leads come from partners including brokers, ISOs and factoring companies, according to Mendelsohn.
Mendelsohn told deBanked that he’s enthusiastic about Breakout Capital’s commitment to innovation.
“The team is very oriented to this mission of how to bring great innovation to the marketplace,” Mendelsohn said. “And I’m excited to get our core products, and new products, into more people’s hands.”
Yalber Obtains $20 Million Credit Facility
February 13, 2018
Small business financing company Yalber has announced the closing of a $20 million credit facility from an institutional credit fund focused on specialty finance and related investments.
Yalber CEO Amir Landsman told deBanked that the money was raised primarily in response to increased demand for capital. The company will use the new credit facility to satisfy customer demand for funding and to continue building out its technology platform.
“This is part of the bigger picture of really looking ahead to the future – to advance technology, marketing and customer service,” Landsman said. “For us, this is just the beginning.”
Yalber was founded in 2007, and until now, it has been self-funded.
The New York-based company derives 90 percent of its leads internally with an in-house sales and marketing team.
“We still work with some ISOs,” Landsman said. “We consider the ISO channel as an important one, but we are quite picky.”
Yalber offers small businesses up to $500,000 and so far it has provided more than 5,000 businesses with over $300 million in working capital.
From its original office in New Jersey, which since moved to New York, Yarber now has offices in Dallas, Los Angeles, San Francisco and London. Most of the company’s 30 employees are based in New York.
With an emphasis on making the application process simpler and faster, and all online, what is the value in having multiple offices?
Landsman told deBanked that by better understanding local business environments, they can make better credit decisions. And having a local office also gives merchants more comfort, knowing that they can speak to someone familiar with their area.
In the decade since Yalber started in the MCA business, CTO Nir Goshen noted how much the industry has grown.
“When I started with Google AdWords [in 2007], when I searched ‘Merchant Cash Advance,’ Google said ‘too little traffic.’ Today, it’s one of the most expensive ad words. The only one I can think of that’s more expensive is ‘insurance.’”
Yalber’s $20 million financing was raised by Brean Capital.
Fiserv Sells Part of Its Lending Arm for $395 Million
February 9, 2018
Warburg Pincus LLC, a New York-based global private equity firm, announced this week that it has entered into an agreement to purchase 55 percent of its Lending Solutions business of Fiserv for approximately $395 million.
Fiserv, founded in 1984, is a publicly traded global provider of financial services technology solutions and it will retain a 45 percent equity interest in its lending technology business, Fiserv Lending Solutions.
The Brookfield, WI-based company focuses on automotive lending origination technology, automotive lending servicing technology and process solutions, as well as comprehensive mortgage and consumer loan servicing solutions.
“We are pleased to partner with Fiserv and the Lending Solutions leadership team on this new joint venture, which brings together two leading businesses that provide mission-critical solutions to a growing and attractive client base,” said Jim Neary, Managing Director, Warburg Pincus. “We see meaningful opportunity to further build this business into a leading platform in automotive and mortgage lending technology.”
Fiserv Lending Solutions will continue to be headed by its current president, Bret Leech.
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.”
Yellowstone Capital Originates $60 Million in Funded Deals in January
January 31, 2018A company email circulated by Yellowstone Capital late Wednesday afternoon said that they originated $60 million in funded deals for the month of January. That’s a 20% increase over the company’s most recent monthly totals.
The top performing sales rep grossed $302,000 in commission in January alone, the email also stated.
Yellowstone Capital is based in Jersey City, NJ.
