TikTok is Now Offering Business Financing
October 7, 2024
Add TikTok to the list of tech platforms offering business loans. TikTok Shop Capital is now “offering sellers access to fast and flexible business financing,” the company states on its website. Unsurprisingly, one of TikTok Shop’s partners is Parafin but the company also lists Storfund and Kanmon as funding partners. Storfund announced its deal with TikTok earlier today and said that its program would be called Daily Advance.
“TikTok is not a lender or loan broker,” the company website states. “TikTok partners with third-party lenders and financing providers to offer TikTok Shop sellers business financing options.”
The process works different depending on which solution a customer uses. For example, Storfund repayments are automatically debited from TikTok Shop payouts, Parafin repayments are automatically debited from the business bank account associated with TikTok Shop payouts, and Kanmon requires repayment via auto-pay deductions from the business bank account provided during the application process.
The Parafin option does not appear to be a standard merchant cash advance. TikTok says it would actually be a Parafin commercial flex loan issued by Celtic Bank. There is no credit check required for it.
TikTok’s foray into business financing is invite-only. “If a seller has an available pre-qualified and/or pre-approved offer, it will appear within Seller Center under the Finances tab,” the website says.
LoanGeek Launches LiveDeal: An Innovative Deal Portal for Commercial Real Estate Lenders
September 18, 2024RED BANK, N.J,, Sept. 18, 2024 — LoanGeek, a leading platform in commercial real estate financing, is excited to announce the launch of LiveDeal by LoanGeek, providing lenders with direct access to exclusive financing opportunities.
LiveDeal is designed to streamline the deal-sourcing process for lenders. It offers an intuitive, tech-forward solution that allows lenders to explore and evaluate potential deals in real-time. The platform is built for lenders, giving them the ability to filter deals based on key metrics such as loan type, loan amount, property type, and location. With the ability to view deal summaries at a glance, lenders can quickly assess opportunities and express interest in the ones that match their investment criteria.
“Our goal is to maximize deal exposure for our clients while providing lenders with a seamless experience,” said Chris Pepe, CEO of LoanGeek. “Traditionally, we’ve worked directly with lending partners to source financing. With the launch of LiveDeal, we are inviting lenders to be part of the process from the start, increasing efficiency and ensuring they have access to the best deals.”
Key features of LiveDeal by LoanGeek include:
- Advanced Deal Filtering: Lenders can filter deals by location, loan type, loan-to-value (LTV), and other metrics, enabling them to quickly find the most relevant opportunities.
- Instant Notifications: When lenders express interest in a deal, the LoanGeek team is immediately notified, ensuring quick follow-up and detailed discussions about the transaction.
- Real-Time Updates: LiveDeal offers live updates, so lenders are always working with the most current information on each deal.
LiveDeal by LoanGeek offers a significant step forward for lenders seeking efficiency in deal sourcing. It’s designed for lenders who want an efficient way to discover high-quality opportunities, making it the most effective platform for sourcing and evaluating deals in today’s competitive market.
About LoanGeek:
LoanGeek is a commercial real estate financing platform specializing in connecting real estate investors with capital providers. Serving the commercial real estate industry, LoanGeek’s platform streamlines the process for both lenders and borrowers.
For more information, visit www.loangeek.com
Leading Fintech MoneyThumb Acquired by Iron Creek
August 29, 2024San Diego, Calif. (August 29, 2024) – MoneyThumb, a leader in automated document evaluation and fraud detection solutions announced today that it has been acquired by Iron Creek Partners LLC (“Iron Creek”), a private investment firm with a focus on investments in the software, data, communications, and business services industries. Iron Creek led the investment group, which also included Main Street Capital Corporation (NYSE: MAIN). The transaction will provide growth capital to help meet MoneyThumb’s strong industry demand, which has recently produced 100% year-over-year annual growth. The transaction closed on August 19, 2024.
Ryan Campbell, previously heading up MoneyThumb’s business development since 2017, has been named as the new chief executive officer and has joined the investor group. Ryan has played an integral role in leading MoneyThumb’s sales, marketing and business development strategy. Ralph Mayer, the company’s founder will step down as CEO and assume an advisory role and retain his board seat.
Founded in 2014, MoneyThumb is an industry leading underwriting automation software that improves workflows for funders, lenders, and accountants by converting and analyzing pdf financial documents in seconds. The company also helps detect fraud with its AI file tampering detection tool that identifies fraudulent activity in seconds, giving lenders a powerful defense against risk and loan losses.
“This acquisition underscores MoneyThumb’s proven technology and strong industry demand, and supports our long-term growth objectives,” said Ryan Campbell. “This partnership marks an exciting milestone for our company and with the support of Iron Creek, we are well-poised to accelerate our growth, continue to deliver exceptional software solutions for our customers and help lenders manage risk and deliver more capital faster to small businesses.”
“MoneyThumb has built a highly successful business through its algorithm-driven software, product innovation and a meticulous approach to delivering value and service to their customers,” said John Bingaman, Founder and Managing Principal of Iron Creek Partners LLC. “We look forward to working closely with MoneyThumb’s talented team to continue to grow the business and broaden the product suite.”
Financial terms of the transaction were not disclosed.
For more information on MoneyThumb, please visit www.moneythumb.com.
About MoneyThumb
MoneyThumb is an advanced automation software solution that streamlines the lending underwriting process by converting bank statements instantly into actionable data. By exponentially increasing efficiency, accuracy and the detection of fraud – MoneyThumb empowers lenders and accountants to make faster, more informed and accurate decisions. MoneyThumb is headquartered in Encinitas, California, and serves customers globally. For more information visit www.moneythumb.com.
About Iron Creek
Iron Creek is a sector-focused, stage-independent private investment firm based in Santa Fe, NM, seeking attractive investment opportunities primarily in the software, data, communications, and business services industries. Iron Creek seeks to partner with strong management teams and to support its portfolio companies’ growth by leveraging its network of relationships and its sector experience.
About Main Street Capital Corporation
Main Street (www.mainstcapital.com) is a principal investment firm that primarily provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Main Street’s portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides “one stop” financing alternatives within its lower middle market investment strategy. Main Street’s lower middle market companies generally have annual revenues between $10 million and $150 million. Main Street’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.
Main Street, through its wholly owned portfolio company MSC Adviser I, LLC (“MSC Adviser”), also maintains an asset management business through which it manages investments for external parties. MSC Adviser is registered as an investment adviser under the Investment Advisers Act of 1940.
Media Contact
Tracy Rubin
JCUTLER media group
Tracy@jcmg.com
Business Finance Companies on Inc 5000 List in 2024
August 13, 2024Here’s where small business finance companies rank on the Inc 5000 list for 2024:
| Company Name | Ranking | Growth |
| Clara Capital | 158 | 2,295% |
| 4 Pillar Funding | 251 | 1,620% |
| Fundible | 254 | 1,611% |
| Byzfunder | 303 | 1,404% |
| Valiant Business Lending | 337 | 1,286% |
| CapFront | 541 | 792% |
| SellersFi | 974 | 523% |
| SBG Funding | 1,158 | 443% |
| Splash Advance | 1,238 | 418% |
| Channel | 1,330 | 389% |
| iAdvance Now | 1,421 | 362% |
| Flexibility Capital | 1,513 | 342% |
| eCapital | 1,968 | 265% |
| Kapitus | 2,025 | 258% |
| Merchant Industry | 2,057 | 254% |
| ApplePie Capital | 2,265 | 230% |
| Backd | 2,282 | 228% |
| Capital Source Group | 2,306 | 226% |
| Direct Funding Now | 2,323 | 225% |
| Expansion Capital Group | 2,829 | 179% |
| Fora Financial | 3,560 | 134% |
| Percent | 4,047 | 111% |
| Smarter Equipment Finance | 4,566 | 89% |
| Gateway Commercial Finance | 4,598 | 88% |
Did we forget you?! Let us know at info@debanked.com and we’ll add you.
Ponzi Schemer Continued to Run Ponzi Scheme From Prison Phone
July 22, 2024Don’t syndicate with New Beginning Global Funding LLC, New Beginning Capital Funding LLC, and Lion Heart Capital Group L.L.C.
That’s because these entities were just named in a federal plea agreement as belonging to Johanna Garcia, a now-convicted ponzi schemer currently serving time in Miami’s federal detention center. Readers might remember her as being the mastermind behind a fake MCA company known as MJ Capital Funding. Garcia raked in more than $190 million as part of a fake syndication/investment scheme from thousands of duped investors. The SEC shut the company down in 2021 and she was charged criminally last year.
She did not go down quietly. Apparently after the SEC shut down her entities she simply set up new entities and kept going. When she was finally arrested and jailed awaiting trial she continued the ponzi from the prison phone and email.
In a proffer signed by Garcia, it’s stated that “Garcia and her co-conspirators told investors that their money would be used to fund general contractors who worked on commercial and residential properties through merchant cash advance loans. In truth, bank records show that there was little to no merchant cash advance activity, and the money raised was used to pay off previous investors.”
Garcia, and those that participated in the scheme with her, used MCA as a cover for their scheme. She was not actually known to people in the industry nor actually worked in it.
How The PPP Reporting Oversight Harms MCA Companies
July 18, 2024David Roitblat is the founder and CEO of Better Accounting Solutions, an accounting firm based in New York City, and a leading authority in specialized accounting for merchant cash advance companies.To connect with David or schedule a call about working with Better Accounting Solutions, email david@betteraccountingsolutions.com.
deBanked’s recent story covering the news about how the Small Business Administration (SBA) failed to report many Paycheck Protection Program (PPP) loan charge-offs to credit agencies is a major concern for merchant cash advance companies.
As the AltFinanceDaily article explained, a new report from the Office of the Inspector General (OIG) found that the SBA did not report 37% of PPP loan charge-offs, and missed deadlines 97% of the time. The OIG report stated that the SBA’s automated system was supposed to report these loans, but it did not always work correctly. As a result, many delinquent borrowers could still get new loans because their bad debt wasn’t reported. The report also pointed out that a large portion of early PPP loan charge-offs were linked to potential fraud, which makes the lack of reporting even more serious.
This oversight could cause real problems for our industry. As an accountant working with MCA companies for over a decade, I understand firsthand how important accurate credit reporting is for making sound and fully informed decisions on which merchants our clients choose to invest in and help advance.
For MCA companies, this incomplete reporting leaves a critical gap in the information that funders rely on. Without accurate credit information, it’s harder to assess the risk of advancing capital to any particular merchant, which can lead to higher chances of defaults and financial losses when you don’t have a complete history that includes any times they’d skipped payments or defaulted. The missing data from the SBA means MCA companies might unknowingly fund high-risk businesses, which ultimately harms the cash advance company itself.
To work through this situation, funders need to take stock of how they evaluate prospective merchants to work with.
First, it’s important to do thorough background checks using multiple sources of information. Relying on just one credit report isn’t enough, especially now that we know there might be gaps. Cross-referencing data from various sources will provide a more complete picture of a merchant’s credit history.
We can also require merchants to provide more documentation and financial information before approving funding deals, removing a complete reliance on credit reporting agencies that have now proven themselves fallible. Pairing up the complete history that they provide along with their credit reports, and continuous tracking of the deal on a strong internal MCA CRM that lets you know of any hiccups, is a proactive approach that helps in making informed funding decisions.
It’s vital to develop strong risk management strategies. This might include setting stricter funding criteria, diversifying the types of businesses we lend to, and keeping enough reserves to cover potential losses. By being cautious and prepared, we can protect our companies from the financial risks posed by incomplete credit reporting, and eliminate our over reliance on that one source of information.
Let’s use this opportunity to ensure we are making the best funding decisions possible, and continue to have healthy companies built on stable foundations.
eBay Brings Back Revenue Based Financing Product
July 12, 2024eBay announced that Liberis had been onboarded as one of its “Seller Capital” partners this week, making it the second official partner after Funding Circle (which was recently acquired). Liberis, homegrown in the UK, expanded to the US in 2020 and offers a revenue based financing product described by eBay as a “Business Cash Advance.” While eBay has partnered with similar companies in the UK for years, eBay customers in the US have seen this before.
In 2010, for example, Kabbage was arguably the first company to offer revenue based financing to eBay customers, which AltFinanceDaily first covered 13 years ago. And they had it all to themselves until PayPal began to muscle its way in with a similar product starting in 2013. Given that eBay owned PayPal, PayPal held a distinct advantage until the two companies split in 2015. Still, PayPal continued to be the default payment service for eBay until 2018.
Kabbage continued to thrive anyway, evolving beyond the platform at least until covid when Kabbage suddenly imploded and was sold to American Express. PayPal’s working capital product also continued to thrive at least until 2023 when it announced a dramatic pullback after elevated charge-offs.
The result is that in 2024, eBay sellers can now look toward getting funding via Liberis.
“As a pioneer in ecommerce and the home to small businesses in more than 190 markets, eBay understands the challenges small businesses encounter in securing fast, flexible and transparent financing,” said Avritti Khandurie Mittal, VP & General Manager of Global Payments and Financial Services at eBay in the official announcement. “eBay Seller Capital is aimed at fueling our sellers’ growth by providing them with tailored financing solutions that meet the unique needs of their businesses. The addition of Business Cash Advance to our suite of offerings in partnership with Liberis enables us to expand capital availability for our sellers on flexible terms – when they need it the most.”
“We understand the unique challenges eBay sellers face when securing financing through traditional means,” adds Rob Straathof, CEO of Liberis. “Through eBay Seller Capital, Liberis will empower sellers with access to fast and responsible financing. We’re thrilled to partner with eBay to support eBay sellers to operate and grow their businesses.”
Real-time Reconciliations on Revenue Based Finance Deals?
June 25, 2024In the finance world, taking a percentage of a merchant’s sales at the time a sale is consummated is called a split. It’s how revenue based financing often works when the purchased future receivables are card-based. When it’s all revenue, funding providers often rely on a combination of ACH debits and reconciliations, the frequency of which are governed by the contract. On some big e-commerce platforms, like Walmart Marketplace, for example, sales data is monitored in real-time and the appropriate split is debited out from the merchant’s bank account the next day. Some refer to this as a real-time reconciliation.
Real-time reconciliations have been attempted outside of e-commerce ever since Merchant Cash and Capital aka BizFi (RIP) pioneered this 15 years ago, but it was a manual process riddled with challenges that would hardly hold up in today’s technological world. In 2021, revenue based financing provider FundKite introduced its own system, one that was documented by AltFinanceDaily at the time.
Back then, FundKite CEO Alex Shvarts said, “This product [where debits vary daily based upon true sales] works better for merchants, it works better for portfolios, if you’re actually reconciling and pulling what you’re supposed to, and not what you’re anticipating.”
Three years later, Shvarts still feels the same way and told AltFinanceDaily that his daily reconciliation method has been a success and is now a leading driver of its business.
“In order to reconcile we must have access to the merchant bank accounts,” Shvarts said. “We use priority technology to do the reconciliation after we have the data. We use a combination of live Logins, Plaid, Decision logic and another piece of code we wrote. Merchants are automatically notified of the reconciliation and adjustment to the payments before we debit the accounts.”
The company touts this system as its edge on its homepage.
“Payments are based on sales, offering protection during slower periods or when no sales occur,” the site says.
