Announcements
Marketplace Lender P2Bi Raises $7.7 Million In Venture Funding
November 18, 2016
Denver-based crowdfunding marketplace lender, P2Binvestor has raised $7.7 million in Series A1 funding led by a Colorado-based angel investor network, Rockies Venture Club and a Japanese venture firm Future Venture Capital Co, its first investment outside Japan.
The P2Bi platform currently has 150 investors – both institutional and retail and it plans to fund 112 new borrowers, up from the current 80 borrowers, by Q1 next year. The proceeds will be used to boost sales and marketing efforts and grow the company’s operations towards this target.
Founded in 2012, P2Bi provides revolving lines of credit of up to $10 million to businesses. With an average line of $1 million, the company’s customers include businesses in retail, manufacturing and consumer goods packaging. It has originated $350 million since 2014 and it is on track to hit $8.2 million in revenues this year.
“We’re seeing more interest in our model as venture funding hits a two-year low and more entrepreneurs are looking for ways to grow their business while preserving their equity using good-quality, flexible debt,” said CEO Krista Morgan in a press statement.
P2Bi has been bullish about fundraising and diversifying its capital sources. Less than two months ago (September 20), it closed a $10 million credit facility with Pittsburgh-based mortgage service company Urban Settlement Solutions and in April this year, through a partnership with New York-based hedge fund, MW Eaglewood Americas, the company raised $50 million in debt.
i2B Capital Provides $4 Million Revolving Line of Credit to CFG Merchant Solutions
November 8, 2016NEW YORK–(BUSINESS WIRE)–i2B Capital (www.i2bcap.com), a provider of direct financing to niche-market financial entrepreneurs, is pleased to announce the closing of a $4 million asset-based revolving line of credit with an accordion to $6 million with CFG Merchant Solutions (CFGMS). CFGMS is a privately owned and operated specialty finance company focused on providing working capital to small and mid-sized businesses (Merchants) in the U.S. that are historically underserved by traditional financial institutions.
Said Mr. Larry L. Curran II, CEO of i2B Capital, “CFGMS gave us the perfect opportunity to apply asset-based lending principals to non-traditional receivable assets in an early stage specialty finance company. CFGMS is a new division of an established finance business with traditional bank financing; however, these receivable assets were excluded from the existing borrowing base. The CFGMS management team is seasoned, backed by private equity, and enabled with technology—exactly what we look for in our target customer. Additionally, they have grown their financed receivables more than 500% since beginning the process.”
Barbara Anderson, Chief Operating Officer at i2B Capital commented, “Our goal over the initial 18-month funding commitment is to prepare CFGMS for more traditional institutional financing in the future. To accomplish that we will provide the growth capital along with our commercial lending expertise to help them prepare for the disciplined reporting requirements and credit processes at the next level.”
William Gallagher, President of CFGMS said, “Obtaining an asset-based loan against our non-traditional asset class within our first year of operation is instrumental in allowing us to execute on our growth strategy, and achieve some very aggressive portfolio and revenue targets. We had to work through several considerations with i2B due to the age and size of the portfolio, but through mutual collaboration we were able to put in place a facility that will enable us to take our business to the next level.”
CFGMS is a subsidiary of CapFlow Funding Group, a commercial finance company that offers an array of products such as factoring, purchase order finance, and asset-based loans. Both companies are headquartered in Rutherford, New Jersey. CFGMS with additional offices in New York City is a direct funder providing working capital to small businesses. They are entrepreneurs who understand first-hand the challenges of acquiring flexible and timely financing. CFGMS combines proprietary analytics and technology, with common sense underwriting to provide fast and efficient access to capital. Programs include Small Business Advance, Merchant Cash Advance, and Invoice Factoring. For more information about CFGMS contact William Gallagher at wgallagher@cfgms.com or visit www.cfgmerchantsolutions.com.
i2B Capital is headquartered in Fort Collins, Colorado with offices in Herndon, Virginia. The company provides senior debt and direct asset investments for growth capital to qualifying entrepreneurs and equity-backed emerging specialty finance companies throughout the United States. For more information about i2B Capital contact Barbara Anderson at 703-871-3993 or banderson@i2bcap.com, or visit www.i2bcap.com.
Contacts
i2B Capital
Barbara Anderson, 703-871-3993
banderson@i2bcap.com
Merchant Cash Advances Are Not Loans – Take the Online Course to Learn Why (And Get a Certificate)
November 3, 2016
A New York Supreme Court decision in June was pretty deliberate when it said a purchase of future receivables was not a loan.
Essentially, usury laws are applicable only to loans or forbearances, and if the transaction is not a loan, there can be no usury. As onerous as a repayment requirement may be, it is not usurious if it does not constitute a loan or forbearance. The Agreement was for the purchase of future receivables in return for an upfront payment. The repayment was based upon a percentage of daily receipts, and the period over which such payment would take place was indeterminate. Plaintiff took the risk that there could be no daily receipts, and defendants took the risk that, if receipts were substantially greater than anticipated, repayment of the obligation could occur over an abbreviated period, with the sum over and above the amount advanced being more than 25%. The request for the Court to convert the Agreement to a loan, with interest in excess of 25%, would require unwarranted speculation, and would contradict the explicit terms of the sale of future receivables in accordance with the Merchant Agreement.
Lawyers around the country are pointing to this published decision and other similar ones as becoming the standard rule of law in New York State.
Finally, there are extracurricular steps you can take as a sales rep, underwriter, or other participant in the industry to educate yourself on what it means to buy future receivables at a discount versus a loan.
A new online course created by law firm Hudson Cook LLP, teaches the basic and unique characteristics of merchant cash advance contracts. New entrants and veterans alike can take the course and corresponding exams to brush up on the core fundamentals of MCA. Those that pass will receive a certificate of completion in “Merchant Cash Advance Basics” that is valid for two years. There are even video tutorials in case you don’t like to read.
Co-produced by deBanked as part of an effort to foster educational standards in the industry, the course just only recently went live. An educated sales force is no doubt integral to the success of the industry and the businesses it serves.
This in no way implies that company in-house training programs are currently insufficient. Instead, companies can use the course to supplement their own in-house training efforts with new hires or to test current employee education levels. More comprehensive versions of the course or new components of it may be developed in the future. We realize this can be evolved to cover more, but for now, it’s the basics.
Can YOU pass MCA Basics?
That’s a copy of my real certificate on the right (shrunken down to fit in this story). I got a perfect score.
Hosted on Counselor Library, you can sign up to purchase the course here.
Update 11/4: Link to the course in the story has been fixed: http://www.counselorlibrary.com/public/courses-mca.cfm
Brief: Cross River Bank Raises $28 Million in Equity
November 1, 2016
New Jersey-based Cross River Bank, a marketplace lending partner bank, secured $28 million in equity, led by Boston-based investment firm Battery Ventures, along with Silicon Valley venture capital firms Andreessen Horowitz and Ribbit Capital.
The capital will be used to expand the bank’s technology and product-development teams, invest in compliance infrastructure and plan new business lines to the online lending industry. Battery General Partner Scott Tobin will also join the Cross River board of directors.
Cross River originated over $2.4 billion loans in 2015 and partners with over 15 online lenders including Affirm, Borrowers First, Marlette Funding, Rocket Loans and Upstart.
Expansion Capital Group Announces New Executive Management Team
October 25, 2016SIOUX FALLS, S.D., October 25, 2016 – Expansion Capital Group (ECG), a provider of small business loans, is pleased to announce several changes to its executive management team.
Effective immediately, Mr. Vincent Ney (ECG’s majority shareholder) is CEO and will focus on further developing the foundation built by the Expansion Capital team. In addition to an impressive combination of leadership and operational experience, Mr. Ney brings a passion for building financial services businesses with a focus on meeting the needs of its strategic partners and its customers. Most recently, he was involved in the online consumer lending sector where he was instrumental in building a business to $100 million in revenue.
As part of Mr. Ney’s early initiatives, Expansion Capital Group has begun testing and implementing new loan term and pricing options to provide broader and more advantageous solutions for borrowers.
Additionally, Mr. Marc Helman has joined Expansion Capital Group as Director of Strategic Partnerships. In this role, Mr. Helman is responsible for driving originations across the Company’s Funding Partner and Partnership channels. Before joining ECG, Mr. Helman spent over ten years in investment banking and venture capital, providing financing to both private and publicly traded small businesses. Mr. Helman stated, “I am incredibly excited to join Expansion Capital Group’s growing team. As our product offerings and platform continue to expand, we look forward to serving the capital needs of a wider variety of small businesses.”
Mr. Ney and Mr. Helman add to other members of the executive team that joined earlier in 2016. Mr. Herk Christie joined ECG’s operations team in March after experience and tenure with Resurgent Capital Services and Capital One. Mr. Tim Mages joined in February as CFO to assist ECG with its financial analysis and Capital Markets initiatives.
Dusty Wasmund, ECG’s VP of Business Development and Channel Partnerships, stated “During the past six months, ECG has broadened its executive management team to build a sustainable business that enables small business owners to access capital quickly to capitalize on their objectives. Our combined team brings a variety of experiences and perspectives to better serve our customer’s needs. This team has collaborated extensively during the past 60 days to strategically bring two new product innovations to market, which provide our borrowers greater financing options tailored to their specific needs. I am very excited about our revised positioning and look forward to working with many of our strategic partners during 2017 as we continue to grow our platform.”
As part of these changes, ECG also recently executed a partial equity recapitalization by ECG’s existing two family office investors. This additional equity, along with its $25 million credit facility closed in partnership with Northlight Financial and Bastion Management during the fourth quarter of 2015, provides ECG with enhanced capital resources to facilitate future growth. With this additional equity base and more flexible product alternatives, ECG will look to significantly expand its origination partners and loan volume.
About Expansion Capital Group:
Since 2013, Expansion Capital Group has provided over 5,000 small businesses with capital exceeding $130 million. Expansion Capital Group has developed a platform based on data aggregation and predictive modeling, which enables it to service this target market cost-effectively. Expansion Capital Group uses a broad array of both traditional and nontraditional data sources to predict individual performance and cash flow of each small business.
For general inquiries, please contact:
Tim Mages
CFO
(605) 877-3910
For sales, lead generation, or channel partner inquiries, please contact:
Mr. Dusty Wasmund
VP of Sales and Channel Partnerships
(605) 351-5833
Mr. Marc Helman
Director of Strategic Partnerships
(605) 681-6400
Everlasting Capital Appoints Director of Equipment Finance & Leasing
October 24, 2016
New Hampshire, October 21, 2016 – Everlasting Capital (www.Everlastingcapital.com) announced today that Dan Marquette has joined the team to further develop their growing portfolio of national equipment vendor and direct client accounts. Dan Marquette comes with a wealth of experience within the industry, having spent the last 5 years in the Equipment Finance & Leasing industry where Dan was instrumental in acquiring numerous strategic vendor relationships, along with numerous Investor relationships. Joining in advance of the expected growth of Everlasting Capital’s Equipment Finance & Leasing product, Dan can continue in his success.
Dan joins Everlasting Capital as Director of Equipment Finance & Leasing to continue Everlasting Capitals continued success capturing larger market share providing business financing options to the national SMB market. Dan Comments “My goal as Commercial Equipment Director with Everlasting is to levy the outstanding talent within the organization’s equipment vertical, to increase our strategic partnerships throughout the Vendor, Franchise and Broker space. Ultimately, working in conjunction with our CEO to improve process, product diversification and day-to-day production efficiencies. I couldn’t be more excited about being a part of such a dynamic commercial finance organization.”
Josh Feinberg, President/CEO said “Dan’s wealth of experience and industry knowledge has already made him a key addition to the Everlasting Capital family. We view his appointment as a sign of our commitment to being the leading company is our industry. Our new innovations and the increasing demand from our customer led us to look for an addition to our team who will fit in with our ethos of innovation and exceptional service, and it is very fortunate that we could find someone of Dan’s Caliber to fulfill this role. I’m confident that Dan will play a key role in providing and implementing high quality solutions for our clients”
About Everlasting Capital
Everlasting Capital is a national business finance solutions provider(www.everlastingcapital.com), redefining lending and financing by consistently providing outstanding customer experiences and innovative, world- class services with creative financing options.
Contact
Everlasting Capital
Dan Marquette
603-471-3282 Dmarquette@everlastingcapital.com
Brief: SMB Credit Rating Agency PayNet Releases Data Scoring for Alternative Lenders
October 7, 2016PayNet, an Illinois-based company that provides credit ratings to small businesses released a pooled-data score for alternative lenders to assess risk.
This new score builds on the existing PayNet MasterScore v2, which contains a total of over 587 variables. PayNet maintains a proprietary database of small business loans, leases and lines of credit worth over $1.4 trillion.
“Alternative loans are higher risk than traditional bank loans, but the nature of their risks is also different, as are a number of the warning signs of risk,” said Thomas Ware, PayNet’s senior vice president of analytics & product development, in a statement.
Credibly Secures $70 Million Credit Facility Led by Suntrust Bank
February 2, 2016NEW YORK—February 2, 2016—Credibly, a tech and data-inspired lending platform that makes access to capital for small businesses simple and intuitive, announces the closing of a $70 million credit facility with SunTrust Bank, one of the nation’s largest financial services firms, and Alostar Bank of Commerce, a specialty provider of asset-based loans. SunTrust served as the structuring and administrative agent, committing $50 million, with Alostar coming in as the first participant with a $20 million commitment. The terms of the deal allow for flexibility to increase the committed amount by another $30 million, bringing the total facility potential to $100 million.
An online lending platform that delivers a broad range of short- and long-term capital to satisfy the entire SMB credit spectrum, Credibly has provided access to capital for more than 4,500 businesses in over 300 industries. In the past year, the company has increased revenue 100%, was recognized by Crain’s as one of the 50 fastest growing companies in New York, and made its second consecutive appearance on the Inc. 500 list of the fastest growing private companies in America.
The new credit facility is consistent with Credibly’s three-prong financing strategy: on-balance sheet, whole loan sales, and securitization. The facility more than doubles Credibly’s onbalance sheet funding capacity, accelerating their ability to provide more small businesses with access to affordable capital, regardless of credit profile or life cycle stage.
“Being vetted and validated by a bank partner of SunTrust’s stature is one of our greatest milestones to date, and provides us with one of the lowest costs of capital in the industry,” said Glenn Goldman, CEO of Credibly. “The continued participation from Alostar – our first credit facility lender going back to 2014 – gives us increased flexibility in our product suite, which in turn provides better terms for borrowers and helps us execute on our core philosophy that all small businesses deserve access to right-sized capital.”
“SunTrust is pleased to work with Credibly to assist them in achieving their mission to fuel American entrepreneurship through access to capital,” said Tarun Mehta, Group Head, Financial Institutions Investment Banking at SunTrust Robinson Humphrey.
“The new SunTrust facility is a validation of the strength of the platform and team that Credibly has built. We remain extremely excited about our partnership with Glenn and his team” said Steve Begleiter, Managing Director at Flexpoint Ford, LLC, a private equity firm that added Credibly to its portfolio in 2014.
About Credibly
Founded in 2010 and with offices in Michigan, Arizona, Massachusetts, and New York, Credibly is a best-in-class Fintech platform that leverages data science and analytics to improve the speed, cost, and choice of capital available to small businesses in the United States. Credibly is dedicated to creating a superior borrowing experience that meets the needs of all small businesses, regardless of product need or credit profile. All loans obtained through Credibly are made by WebBank, a Utah-chartered industrial bank and member of the FDIC. Learn more at www.credibly.com.
About SunTrust Banks, Inc.
SunTrust Banks, Inc., one of the nation’s largest financial services organizations, is dedicated to Lighting the Way to Financial Well-Being for its clients and communities. Headquartered in Atlanta, the company serves a broad range of consumer, commercial, corporate and institutional clients. As of September 30, 2015, SunTrust had total assets of $187 billion and total deposits of $146 billion. Through its flagship subsidiary, SunTrust Bank, the company operates an extensive branch and ATM network throughout the high-growth Southeast and Mid-Atlantic States and a full array of technology-based, 24-hour delivery channels. The company also serves clients in selected markets nationally. Its primary businesses include deposit, credit, trust and investment services. Through its various subsidiaries, the company provides mortgage banking, asset management, securities brokerage, and capital market services. Learn more at www.suntrust.com.
About AloStar Bank of Commerce
AloStar Bank of Commerce, with $900 million in assets, is a specialty lender with extensive experience in providing Asset Based Loans to middle market companies. In addition, the bank provides value for depositors, small-to-medium-sized companies and community banks across the country through on-line customer service, and unique lending products and services. Learn more at www.alostarbank.com.
