Announcements
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.
Opus Bank Enters into Strategic Marketing and Referral Agreement with Leading Online Lender to Increase Lending to Small Businesses
January 21, 2016IRVINE, Calif.–(BUSINESS WIRE)–Opus Bank (“Opus”) (NASDAQ: OPB) announced today that it has entered into a marketing and referral agreement with OnDeck® (NYSE: ONDK), the leader in online lending for small business, that will leverage Opus’ 58 retail banking office distribution located in major metro markets up and down the West Coast and OnDeck’s sophisticated credit and funding platform. Entering into this arrangement allows Opus to offer a complete solution to those small businesses that are looking for financing up to $500,000, including a range of term loans and lines of credit powered by a streamlined application process and fast access to the funds.
Stephen H. Gordon, Founding Chairman, Chief Executive Officer, and President of Opus Bank, stated, “I am excited to have entered into this marketing and referral agreement with OnDeck. Opus offers an extensive suite of lending products through its Commercial Bank and, while we receive a significant amount of inquiry for small business loans through our Retail Bank, OnDeck has proven to be much more proficient in underwriting and funding these smaller loans. This partnership enables Opus to further leverage and scale its strong market presence by offering small balance financing solutions that it was otherwise not able to efficiently accommodate and, in doing so, generate additional revenues while not using Opus’ balance sheet or capital.”
Gordon concluded, “Since Opus’ inception, it has had an acute focus on providing tailored financial products, services, and solutions to those small and mid-sized commercial businesses, entrepreneurs, real estate investors, and professionals with a vision to expand and grow. Opus is now better positioned to provide faster access to capital to those businesses where the availability of small balance financing has an outsized impact on their ability to expand, create new jobs, and succeed. At Opus Bank, we understand that by providing capital financing to successful entrepreneurs and their businesses, we are enabling those businesses to flourish and, in turn, build healthy, vital, and vibrant communities from the ground up.”
About Opus Bank
Opus Bank is an FDIC insured California-chartered commercial bank with over $6.2 billion of total assets, $5.0 billion of total loans, and $4.9 billion in total deposits as of September 30, 2015. Opus Bank provides high-value, relationship-based banking products, services, and solutions to its clients through its Retail Bank, Commercial Bank, Merchant Bank, and Correspondent Bank. Opus Bank offers a suite of treasury and cash management and depository solutions and a wide range of loan products, including commercial business, healthcare, technology, multifamily residential, commercial real estate, and structured finance, and is an SBA preferred lender. Opus Bank offers commercial escrow services and facilitates 1031 Exchange transactions through its Escrow and Exchange divisions. Opus Bank provides clients with financial and advisory services related to raising equity capital, targeted acquisition and divestiture strategies, general mergers and acquisitions, debt and equity financing, balance sheet restructuring, valuation, strategy, and performance improvement through its Merchant Banking division and its broker-dealer subsidiary, Opus Financial Partners. Opus Bank operates 58 client experience centers, including 33 in California, 22 in the Seattle/Puget Sound region in Washington, two in the Phoenix metropolitan area of Arizona, and one in Portland, Oregon. For additional information about Opus Bank, please visit our website: www.opusbank.com. Opus Bank is an Equal Housing Lender.
Forward-Looking Statements
This release may include forward-looking statements related to Opus’ plans, beliefs and goals, which involve certain risks, and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. The forward-looking information presented in this press release is not a guarantee of future events, and actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “intend” or “expect” or variations thereon or similar terminology. All such statements speak only as of the date made, and Opus undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
BFS Capital Appoints Ken Murray as Chief Marketing Officer
January 13, 2016BFS Capital (“BFS”), a leading technology-enabled small business financing platform, announced today that it has appointed Ken Murray as its chief marketing officer. Mr. Murray is responsible for customer acquisition and loyalty marketing efforts to drive growth for BFS Capital, including demand generation, communications, marketing analytics, digital, channel development and brand management. With more than 25 years of leadership experience in financial services, Mr. Murray is a recognized thought leader in marketing execution and digital transformation.
“We’re thrilled to welcome Ken aboard to lead our marketing efforts,” said Marc Glazer, CEO and co-founder of BFS. “Ken’s vast knowledge of the entire marketing landscape, digital marketing, customer experience and other strategic skillsets will play an integral role in our next phase of growth. Our mission continues to be focused on responsibly serving small businesses and with the addition of Ken, we fully intend to drive this momentum further into 2016 and beyond.”
BFS is focused on moving forward with the transformation that began in 2015. In July, the company hit the $1 billion milestone in total financings to small businesses and in September the organization rebranded with a new logo, website and name change.
“I’m truly excited for this opportunity to help guide a brand that is an industry leader,” said Mr. Murray. “I’ll be focused on applying my knowledge to the BFS market and on growing the company’s relationships with business owners, investors and industry partners.”
About Ken Murray
Prior to his new position, Mr. Murray served as Head of Digital Products for Farmers Insurance Group in Wilmington, Delaware and Los Angeles, as well as Vice President of Marketing for 21st Century Insurance. Earlier, he was Chief Marketing Officer for J.G. Wentworth, where he was twice nominated for Marketer of the Year by the Direct Response Marketing Association. He also served for 12 years at MBNA America and MBNA Europe, where he held leadership roles in digital marketing, product development and product management. He started his career as a journalist, working at newspapers in Connecticut and Florida before starting his financial services career at Barnett Banks, Inc.
Mr. Murray has a BA in English from the University of Delaware and an MBA with concentrations in finance and economics from the University of Florida.
