Alternative Lending Set to Boost Small Business Strength in 2018

Small business lending saw a 2017 surge, according to the U.S. Small Business Credit Monthly Report from PayNet, with 11 of 18 sectors experiencing a lending increase over the past 12 months.

Experts believe 2018 will continue to foster a friendly environment for smaller enterprises.

“A combination of small business optimism and favorable tax changes will likely spur increased demand for small business loans in 2018,” Gerri Detweiler, education director at Nav, tells deBanked. “This, combined with personal credit scores and business credit scores at all-time highs, means 2018 should be another record year for small business lending.”

Detweiler added that big banks have begun to fine tune their incorporation of alternative data sources into underwriting decisions. She believes that those who continue to do this well are on track for a “very good year” in 2018.

New Mexico Bill Would Allow State Employees to Repay Loans Via Paychecks

Proposed legislation would enable New Mexico to offer small loans to state employees that are paid back via deductions from their paychecks.

Put forth by Democratic state Senator Bill Tallman, the bill would put a 30 percent ceiling on interest rates for loans obtained via the program and limit repayment to 12 percent of gross salary or wages.

According to the Associated Press, Tallman says the bill is aimed at lowering debt burdens on state workers.

Should it pass, Tallman’s initiative would serve as another step for the state in its current battle against predatory lending tactics. As of this month, small lenders in New Mexico are held to a maximum of 175 percent interest on all loans finalized from January 1, onward.

Doug Farry, executive vice president of Employee Loan Solutions Inc., which deploys the employee lending service, True Connect, believes such a strategy can prove successful at the state level.

Jersey City is Quietly Becoming a Fintech Hub

Jersey City is luring yet another innovative small business finance company to their community. This time it’s NYC-based Pearl Capital. According to NJ state records, Pearl was approved on January 9th for a total of $5.6 million over 10 years to relocate under the Grow NJ tax program to boost jobs in the area.

Other finance companies that have relocated to Jersey City, thanks to Grow NJ, are Yellowstone Capital, World Business Lenders, and Principis Capital. But that’s not all, companies like BlueVine and Funding Metrics have also set up operational centers there.

We do not yet know what address Pearl intends to move to.

What’s Lending Got to do With Cryptocurrency?

Facebook and Snapchat might be the last things that employees are being distracted by these days. Instead it’s Coinbase and Blockfolio, two cryptocurrency apps, that are quickly stealing the attention of young finance professionals. And the interest in Bitcoin, Ethereum and alt coins is causing some in the industry to wonder if the phenomenon can somehow be connected to online lending and merchant cash advance.

A meetup hosted by partners of Central Diligence Group (CDG) on Tuesday night in NYC, for example, was geared towards cryptocurrency enthusiasts. CDG is a merchant cash advance and business lending consulting firm. Those that attended, talked candidly about Ripple, Bitcoin, Ethereum, and the hot topic of Initial Coin Offerings (ICOs). And it did seem all connected. Companies successfully raised more than $3 billion through ICOs in 2017, for example, some of them online lending companies.

Business Loan Broker Shamed on TV by Investigative Reporter

A business loan broker found himself on the wrong end of Television fame this week when award-winning investigative reporter Arnold Diaz showed up at his office to question him about fees charged to merchants for loans he did not procure. The exchange, which was captured on camera and broadcast on WPIX-11 in New York, shows Bridgehampton Funding managing director Anthony Kline of Long Island, initially running away when confronted about the allegations.

Kline and Bridgehampton are accused of charging merchants upfront fees to get them loans, failing to get the loans, and then keeping the fees. Bridgehampton also allegedly used LOIs of a real commercial lender’s letterhead to lure merchants into believing that a loan would be forthcoming. But the LOIs are forged, according to one commercial lender that has filed a lawsuit for fraud against Kline and his firm, swearing that they have no business relationship. Trevor Cole Commercial Co of CT, the plaintiff, is seeking more than $1 million in damages.

An Online Lending Task Force is Coming to New York (Revised)

Although the bill was signed by the Governor, a last minute change eliminated the task force portion of the task force bill. Instead the DFS, NY’s financial services regulator, is tasked with conducting its own study of online lending. The results of their findings are to be submitted to the Governor for review by July 1, 2018.

An online lending task force DFS study will be coming soon to New York, according to legislative records. The New York State bill proposed in June and covered by deBanked, was reportedly signed by Governor Cuomo on December 29th, right before the end of the year.

Will 2018 Be a Special Year?

2018 is going to be different, in a good way. That’s word on the street in the alternative finance industry, many of whom have told me that it’s just something they feel.

I feel it too. The S&P 500 is at an all-time high, Bitcoin is up more than 1,400% for the year, lenders are lending in full force, and on top of it all, Donald Trump is president. The world is changing and from a one thousand foot view, it’s an exciting time for finance.

2018 will welcome Broker Fair, the inaugural conference for MCA and business loan brokers.

MCA’s Top Social Media Voice

LinkedIn has unveiled its top 10 voices for marketing and social media. Fintech did not make the list, but perhaps the social networking site didn’t look hard enough. If they had been following Jennie Villano, who on Dec. 1 joined Kalamata Advisors as vice president of business relationships, that list might have included a nod to the MCA industry.

By most standards she’s a newbie to fintech, having joined her previous employer Pearl Capital only two years ago. But that hasn’t prevented her from making her social media presence known. And while she reserves Facebook for her personal life, if you know Villano then you wouldn’t be surprised at her success on LinkedIn, as she seems to have a knack for social media.

Hard Work, Big Success – The True Story of an MCA Broker

Sales is a tough field for anyone to break into even if they come from the most ideal of circumstances. At some point, the rubber meets the road for every MCA broker, at which time they must decide whether they’ve got what it takes to make it in this business.

This is what makes Lerry Dore’s story so remarkable, as it seems that the more he got knocked down in life, the higher he was destined to rise. Today he’s employed as an MCA broker at Cresthill Capital. And while education has been paramount to getting him here, evidenced by the fact that during his entire employment he has been in college and he is still one of the funding company’s most successful brokers, Dore more than anything else was trained at the school of hard knocks.

Closing Loans and MCAs — From the Bedroom to the Office

The merchant cash advance industry has gone mainstream so quickly that it has become more difficult to identify potential customers.

Market saturation and industry consolidation have caused the cost of sales leads to increase sharply. Yet a New York business loan broker is finding success by applying lead generation and online marketing strategies to merchant cash advance, or MCA, while expanding the number of services he offers prospects. Funding is just the foot in the door.

Originations Since Inception

After several company announcements recently, we’ve compiled a milestone chart to plot where they rank. Originations may indicate business loans or MCAs funded on balance sheet, brokered, or placed through a marketplace. These rankings are a work in progress. This chart may not include companies for which public data is not available. If you’d like your figures to be listed here, e-mail sean@debanked.com.

Kabbage Crosses $4 Billion in Loans, Taps C-Suite Exec for Intl Expansion

Alternative lender Kabbage is exiting 2017 with a bang, having just crossed the $4 billion threshold for loans deployed across more than 130,000 small businesses so far. The latest milestone represents a 30% spike in both total funding and the number of merchants on its platform since April 2017, which is when they celebrated their previous new threshold. Victoria Treyger, chief revenue officer for Kabbage, took some time to talk with deBanked about the latest milestone, international expansion and mobile strategy.

“Our lines of credit and amounts taken continue to increase as we begin serving more and larger small businesses. We see great momentum across all industries in all 50 U.S. states,” Treyger said, adding that the momentum is particularly evident among the restaurant, construction, professional services and automotive industries for funding strategic investments such as new locations, specialty equipment, business expansion, etc. The $4 billion milestone is the result of the company’s direct business in America only.