NJ Legislature Aims to Classify Merchant Cash Advance as a Loan in New Disclosure Bill
October 15, 2018
S2262 in New Jersey, a bill to require disclosures in small business lending, was amended this afternoon to define merchant cash advances as small business loans for the purposes of disclosure.
Banks and equipment leasing companies are exempt from the bill.
You can listen to the hearing here. Debate on S2262 begins at the 6 minute, 12 second mark.
The bill’s author (image at right) is Democratic Senator Troy Singleton who represents New Jersey’s 7th legislative district.
Testifying on Monday’s hearing against the bill were Kate Fisher of the Commercial Finance Coalition and PJ Hoffman of the Electronic Transactions Association.
The Broker: How Andy Savarese Changes Collars and Closes Deals
October 12, 2018
Title:
I’m the Managing Partner at JustiFi Capital, a brokerage in Farmingdale, Long Island. I started it September 2017 with my cousin, who’s the owner and my best friend. We do mostly MCA, but also some term loans.
His schedule:
I have a part-time/full-time job in the mornings. I work in sanitation for the town of Oyster Bay on Long Island. I typically wake up at around 3:37 a.m. I get into my yard at 4:15 a.m. and I go right into my route. My job is task completion. So the faster you work, the faster you get to go home. You get paid the same. I was fortunate to get on a fast truck, so I’m usually done between 7:45 a.m. and 9:30 a.m.
I go home, I take a quick shower, and I change my outfit. I go from blue collar to white collar. I get into the office around 10:30 a.m. and I start doing more of a mental hustle compared to a physical hustle.
At around 12:45 p.m., I take my lunch and I go to the gym for about 45 minutes. I get back to the office and I keep up the closing, the pitching, the selling, the prospecting. At around 5:30 p.m., I leave the office, I pick up my son from daycare, and since my wife works evenings, I take care of him at night until around 7:30 p.m., and get him ready for bed. The second he hits his crib, I hit my bed and I call it a day.
His background in the business:
About three years ago, I was driving oil trucks after sanitation, and my cousin, who is also my best friend, gave me a call. He knew I was breaking my butt all day. He had a friend that was starting his own ISO. So I did that for a year and I learned the industry. It didn’t really work out there, so I convinced my cousin to open up our own shop, which is JustiFi.
His process:
At JustiFi, we’ve been growing. We’re just grinding it out and things are going really well. We have four brokers and we keep it tight. We keep it small so that everybody is inundated with files and everybody’s making money and everybody’s happy. We don’t have any processors or chasers. We do it all on our own. We’re working the deal from beginning to end. My cousin has devised a pretty strategic marketing plan that inundates us with leads all day. I disperse them and I follow up with my guys and see how I can help. I overlook all of the closings and make sure that everything than can get worked is getting worked.
His biggest challenge as a broker:
A lot of people will say getting good leads and keeping your brokers happy. What I found is the most challenging part of being a broker in this industry is keeping a really level head and keeping your emotions out of the game. It’s a very tumultuous industry. One day, you could have 12 deals in the funding chute, the next day, your pipe could be dry. You could have a deal you think is going close and something happens on the funding call and it gets derailed. The point is that you’ve got to stay positive, you’ve got to stay confident, and you’ve got to roll with the punches. If not, you’re going to lose it and you’re going to get eaten alive. Because it’s a battlefield out there. You’ve got to keep your composure, no matter what the size of the deal. You’ve got to just keep pushing through. Because if not, you’re not going to make it.
His largest deal funded:
$250,000. And I made $38,000.
His advice for brokers:
When I go to close a good sized deal, or a tough deal, I don’t like to come off as a salesman. I’ll never do that. I’m going to come off as an advisor. I’m going to come off as a partner with you where I’m going to explain the ins and outs of the deal. I’m going to explain how it benefits you. I’ll never put on pressure or talk slang. I’m going to be a professional. You’ve got to kind of put yourself in [the merchant’s] shoes and you’ve got to see that it really makes sense for them. Because when it makes sense to you and it makes sense to them, you’re going to close the deal and you’re going to move forward.
But there are always deals that will never close, deals that you can’t sell. So you can’t be too hard on yourself. You’ve got to stay positive. You can’t beat yourself up if you don’t sell something. You’ve got to just do your best, stay neutral, and just talk to clients how you want to be talked to.
What he does to pump himself up for a deal:
If I know my day is bringing a big deal that I have to sell and I’m a little uneasy about it, I have an advantage. I’m on the back of a garbage truck all morning and I focus on what’s in store for me that day. If I have a big deal, I recite in my head [from the truck] how I’m going to report to my client. So when I get into the office, I dial up and I already know how the conversation is going to go. I have my rebuttals in my head, I have the direction, I have everything ready to go so that when I get on the call, I’m fully prepared.
Will you quit your morning job?
No. When my pension kicks in, I’ll leave. But I told myself the day I started this and the day I started seeing the return, “I’m never leaving sanitation. I won’t.” I made that promise to myself. There’s been days when I’ll have a five figure commission day and the next morning it’ll be pouring rain out, and I’ll say to myself, “Man, I just want to take the day off.” But no, I made a promise. I go in.
Why?
It keeps me grounded, it’s a stress relief. It’s what I am. It’s what I do.
Digital Mortgage Lender “Better” Goes Where No Fintechs Have Gone
October 8, 2018
One product noticeably absent from fintechs expanding into lending or banking is mortgage loans, but now a fintech startup is looking to disrupt the $13 trillion mortgage industry.
Eric Wilson is co-founder and head of operations at Better Mortgage, a New York-based digital mortgage lender. Wilson explained to AltFinanceDaily:
“Our industry more than consumer lending is stuck in the pre-internet era and hasn’t been able to leverage the tools to make getting a mortgage feel as simple and as empowering as other products we’re used to consuming online. The industry was waiting for a company like ours to come along with the right skills and engineering staff.”
Better Mortgage is an end-to-end mortgage lender that matches investors interested in giving loans to a subset of consumers. “We take applications and compare with investors for the best price. Underwriting and communication with the borrower happen on the internet,” Wilson said.
The investors are large financial institutions that are in the business of buying mortgage loans.
“We are a direct lender. We originate mortgages. We don’t charge origination fees to customers. We make money when we sell those loans to the secondary market, whether it’s Fannie Mae or any one of our 28 partners,” said Paula Tuffin, Better Mortgage chief compliance officer and general counsel.
In addition to zero origination fees, Better has eliminated commissions. “For us, we believe you should be able to put your storefront online and have consumers find you. We don’t think it’s appropriate or necessary pay one individual to take $6,000 out of a $300,000 loan,” said Wilson.
Instead, Better relies on a team of loan consultants who are “full-time employees or better” who are incentivized to deliver a delightful customer experience,” said Wilson. This differs from the traditional broker model used by much of the industry. “We don’t deal with third-party mortgage brokers. This eliminates a lot of the potential for fraud and harm to investors,” he noted.
Pain Points
The “pain points,” he noted, tied to mortgage lending surpass that of personal or unsecured lending. For instance, greater amounts of data are needed for loans of this size, and there’s the complex and intensive process of risk underwriting, all of which is exacerbated by heavy regulation.
Unlike some of its fintech peers, Better Mortgage has no interest in pursuing an OCC special- purpose national bank charter, or fintech charter.
Wilson is a millennial who had a front-row seat to the mortgage crisis and all of the hardship that fell on consumers. “It was a result of irresponsible lending practices,” said Wilson, “and a failure by regulators to keep lenders in check. So to that end, we are champions of post-crisis Dodd Frank-era consumer protection regulation.”
While operating under a single regulator across all 50 states would streamline the process for Better, it would come at the high price of innovation. “It comes with some pretty hefty strings attached. That regulatory environment is often so challenging to navigate or requirements so onerous … that I would be hesitant to go head-first into a program like this,” said Wilson.
As a result, Better incurs the cost of taking a state-by-state approach, a burden that Wilson says the company is happy to bear: “If we were to pivot and get a bank charter issued by the OCC, we could transact in 50 states overnight. But our ability to innovate evaporates in the process.”
Better is licensed in 19 states and is making an expansion push in which it plans to operate in all 50 states in the first half of 2019. The minimum FICO score for a Better conforming mortgage product is 620.
“By and large, the market is shallow in the application of technology. We’re a tech company first and we acquired a mortgage company as opposed to being a mortgage company learning about tech. This gives us a fundamental advantage in the way we think about problems,” said Wilson.
Greenbox Capital Introduces On Demand Loan Checkout Process
October 3, 2018Miami Gardens, Fl, 10-03-18
This latest on demand loan process function grants ISO partners the ability to increase term and funding amounts up to one month and 10%, respectively, without submitting a request. “The Box” was developed by CEO Jordan Fein and the innovative Greenbox IT team to give brokers additional flexibility.
The development mandate was to eliminate extraneous steps between the merchant and the broker which would further enhance those relationships and promote long lasting partnerships. “The Box” is now considered the most efficient, convenient user technology available.
“When the difference between winning and losing a deal is time, Greenbox Capital has provided a solution that allows our brokers to make more favorable terms, instantly! We have our pulse on the industry and the needs of our ISO partners. We regularly request feedback and implement upgrades to our technology to meet industry needs,” states Fein.
Greenbox Capital specializes in alternative funding options for small-and medium-sized business averaging at least $7,500 in revenue in each of the past 3 months. Greenbox Capital’s fast business cash advances and short-term small business loans make goals attainable.
The company’s small business financing programs include:
- Merchant Cash Advances (in available USA regions)
- Small Business Loans (in available USA and Canada regions)
- Invoice Factoring
- Business Lines of Credit
- Unsecured Financing
- Collateral-backed Funding
“We empower business owners to succeed by providing what they need most: access to working capital. We are committed to industry leadership in technology and will continue to develop processes that lead to a positive outcome for both merchant and broker,” adds Fein.
Greenbox Capital
855.442.3423
Info@greenbox.capital
Everest Business Funding is a Sponsor of AltFinanceDaily CONNECT – San Diego
October 3, 2018Everest Business Funding is a sponsor of AltFinanceDaily CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
Funding Metrics is a Sponsor of AltFinanceDaily CONNECT – San Diego
October 3, 2018Funding Metrics is a sponsor of AltFinanceDaily CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
National Funding Promotes Justin Thompson
October 3, 2018
National Funding announced today that Justin Thompson, formerly Executive Vice President of Sales, has been promoted to Chief Revenue Officer of National Funding. The new position is an expanded role that will include Thompson’s previous management of a 100-person sales division that includes Direct Sales, Renewal Sales, Broker Sales, Equipment Financing and the responsibilities of developing the company’s new Strategic Partnership vertical.
“On the heels of our acquisition of QuickBridge, and the explosive profitable growth of National Funding, this is a great time to expand our offerings to clients with new products and solutions,” said Dave Gilbert, National Funding founder and CEO. “Justin has led sales through the biggest growth period in our 20-year history and I am thrilled for him to continue building on this strong record.”
Thompson started working as Director of Sales for National Funding in 2002, according to his LinkedIn profile, and he has remained with the company until now, with the exception of a two year stint at Reliant Services Group working as Director of Sales & Operations.
“I have never been more excited about the future of National Funding as I am now,” said Thompson. “With the acquisition of QuickBridge, expansion of our strategic partnership channel, and the ever-improving performance of National Funding, we have a lot to offer our customers and brokers – making us an important resource for small and medium-sized businesses nationwide.”
National Funding has also made two additions to support the growth of Strategic Partnerships. Jason Osiecki, previously Head of Sales for QuickBridge, has been named Vice President, Strategic Partnership for National Funding. He will be tasked with driving growth opportunities in the merchant processing, leasing, B2C, Lender Decline and other markets. And Kevin Kane has been appointed as Director of Business Alliances. He will manage day-to-day relationships with brokers across the country.
Broadway Advance is a Sponsor of AltFinanceDaily CONNECT – San Diego
October 2, 2018Broadway Advance is a sponsor of AltFinanceDaily CONNECT San Diego. The half-day event for funders, lenders, brokers and industry professionals is being held at the Andaz on October 4th!
