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.
Walmart Now a Direct Funder in the Merchant Cash Advance Industry
September 15, 2024
Ready to enjoy easy access to cash advance funds and flexible financing options? Fuel your growth on Walmart.com with our suite of options.
– Walmart.com
Walmart, which made headlines recently with third party MCA funders Parafin and Payoneer, is now funding MCAs directly as well. The new programs, known as Capital by Walmart and Capital for WFS (Walmart Fulfillment Services), were recently placed on its Marketplace page. Capital by Walmart promotes the program as being “1 flat fee” and “Repayment deductions based on your future sales.”
An explainer video that went live on August 1st says that they can fund you themselves or fund you through third parties. Video here:
Further, Walmart’s site states that for their in-house funding, they collect from merchants via their Marketplace payouts each settlement cycle. “In case of insufficient funds in the settlement account, we may debit your bank account,” it says.
A Walmart MCA is invite-only for the time being.
Walmart didn’t raise any mention of its funding programs or partners in its latest fiscal quarterly earnings report but did stress that Walmart Marketplace had grown by 32%.
Why You Specifically Need An MCA Accountant for Your MCA Business
September 11, 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.
Doing the books for a merchant cash advance (MCA) business isn’t like doing the books for other types of businesses. That’s something that seems pretty intuitive for those of us in the industry to understand, but often I see many business owners still trying to handle finances themselves or hand it off to a general accountant who isn’t well-versed in the MCA world, which leads to unfortunate messes that require some costly cleanup work. The reality is that while any accountant can keep basic, or even complex financial records, managing the finances of an MCA business requires more than just a surface-level understanding.
Take a situation I encountered recently: a business owner decided to use their regular accountant to handle their books, deciding that the cost of an MCA industry-qualified accountant was too much for him at that point in time. The accountant he picked was a competent elderly gentleman who produced the financials regularly and on time, and things appeared to be going smoothly until his investors realized their syndication income had been reported incorrectly. The accountant, unfamiliar with MCA-specific accounting, treated the income like a standard loan repayment and the business owner hadn’t noticed the misreporting when he passed the report on to his financiers. The investors were confused and frustrated with the mistaken report, and felt like they weren’t getting a clear picture of the company’s financial health and cash flow situation. I was actually able to help him clear up the issue, but the whole mess and subsequent (thankfully temporary) mistrust could have been avoided entirely if the accountant was someone who understood the specifics of the MCA business.
Handling the finances of an MCA business isn’t just about tracking the cash coming in and out. There are particular rules around recognizing income, such as how to deal with syndication fees, manage different types of funding, and correctly categorize income like commissions and fees. It’s also critical to understand how to report income for tax purposes versus what’s required for investor reporting. For example, recognizing income too soon or too late can have a big impact on your cash flow, tax obligations, and even how your business is perceived by others.
I’ve seen businesses try to use standard accounting methods and find themselves with financial statements that don’t accurately reflect their operations. In one case, a company overstated its income because it applied a generic accounting approach. This not only increased their tax burden but also strained their cash flow. They needed someone who understood the nuances of the MCA world to correct these issues, adjust the income recognition methods, and align them with industry standards.
Another challenge everyday CPAs struggle with is keeping up with the constant changes in MCA deals – from advances in different repayment stages to syndication agreements with external investors. Without careful tracking, discrepancies can quickly arise, and they’re often not noticed until they’ve become significant problems. Even for businesses using cash basis reporting because their revenue is under $10 million annually, it’s crucial to handle things correctly. Deferring tax liabilities by timing income recognition can be a smart move, but only if done accurately. Otherwise, there’s a risk of audits or having to pay back taxes with penalties. I’ve helped businesses navigate these tricky waters after they ran into trouble because their previous accountant didn’t know when to use cash basis versus accrual basis reporting.
A good MCA accountant knows how to navigate the specifics of your business. They understand what to watch out for, how to manage the unique aspects of the industry, and how to avoid problems that could end up costing you time, money, or reputation. I’ve seen too many businesses suffer preventable setbacks by either doing it themselves or relying on someone who didn’t have the right knowledge. The cost of hiring an accountant who specializes in MCA is minimal compared to the potential financial losses from mishandled books or compliance errors.
At the end of the day, having an accountant who understands the MCA industry isn’t just a nice-to-have; it’s a necessity. The complexities of this business require a specific set of skills, and working with someone who gets that can help you keep your business running smoothly and avoid unnecessary headaches in the future. Make sure you have the right support in place to protect your business and keep things on the right track.
Funding Circle UK Now Simpler, Leaner After Selling US Arm
September 5, 2024Funding Circle published its first financial statements since divesting its US business. The international small business lender’s primary market had always been the UK. In its latest shareholder presentation, Funding Circle explained that 92% of its income comes from fees.
Specifically:
53% transaction fees
27% servicing fees
12% drawdown fees
Overall, the company’s financial picture was pretty good for the first half, generating £79.9M in revenue and a small profit (before tax). The company should be well on its way to continued profitability given its plan to reduce headcount by 120 while focusing more on management layers and productivity, a plan which includes generative AI tools. One slide explains that it is now a “simpler, leaner and profitable business.”
Funding Circle pioneered peer-to-peer lending in the small business finance market. iBusiness Funding, a subsidiary of Ready Capital is the company that acquired its US business.
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.
WTF, From Credit Card Processing to Funding Deals
August 6, 2024“My first name is William, my son’s name is Torre and he’s my partner, and our last name is Failla, so WTF was the name of the acronym that we came up with.”
WTF Merchant Services, a real name and double entendre that makes it instantly unforgettable to any client that hears it, has an unusual story. Its CEO Will Failla is a veteran professional poker player that has won more than $6.6 million from tournaments over the course of his career according to a site that tracks players. It’s through friends he made at the card tables that he began to learn about a unique business that some of them were involved in, funding merchants based on their credit card processing sales. After a lot of encouragement and advice over the years, Failla was intrigued enough to look into doing it himself.
“I approached my son who was a business major and a finance major out of Hofstra and I said to him, ‘you’re graduating any day now so why don’t we do some diligence, look into this business and see what you think.'”
His son, Torre, who is now the company’s CFO, signaled his approval so long as they paced themselves and mastered the most fundamental component of it first, the credit card processing side of the business. Thus 2021 kickstarted WTF Merchant Services as a shop on Long Island that focused entirely on boarding merchant accounts. They started by approaching their friends, family, and contacts and then expanded it to where they had a referral incentive program and continued to acquire more and more accounts.
The most attractive part of the business to them is the residual revenue component to it. “That’s the greatest. That’s what made us get into it because now we get paid every month. As long as you keep that customer, you get paid every month,” Failla explained.
And keeping those clients means providing great customer service, which he said they’ve placed a strong emphasis on. They’ve also gotten a firsthand look at the financial trends of the various businesses they’ve worked with, something they figured would come in handy for when they were ready to take the next step.
“We didn’t do an MCA deal until the beginning of this year,” Failla said. “We really wanted to learn the business in and out, and then we were just an ISO.”
The evolution from credit card processing to funding is straight out of the old MCA playbook of the mid-2000s, but with a notable difference here, they haven’t abandoned their roots. Unlike many modern funding ISOs who focus entirely on commissions paid out on funding, WTF is requiring their funding clients to switch their merchant accounts to them, assuming it’s a business that processes cards. And if they can do the funding deal on a split of the processing, all the better.
“When you do the split, it’s so much easier because you take, let’s say 15 or 20% or whatever the merchant can handle at the time,” Failla said. “It’s just so much better of a direction to get paid because it doesn’t hit their bank, it doesn’t hurt them as much. When they see it coming out daily like that, it’s a little different. When it comes out of the credit cards it’s just early and it helps a lot. Mindset changes.”
The company’s traditional approach has already attracted the attention of some of their peers in the industry who like the idea of residual income but don’t have the time or the patience to worry about merchant accouts.
“We have different MCA offices that we actually do this with already,” Failla said. “We do all their credit card processing. We handle all the back-end. We handle all the front-end. All they do is give us the referral and they become what we call a referral partner, and they get paid every single month as long as we keep the account.”
Will was sure to give credit to those that have helped shorten his learning curve along the way. He has since discovered that others in the poker scene are also in the same business as he and it’s created a valuable community. WTF even has a poker table in its office as a sort of tribute to his background which he has not actually retired from. The Hendon Mob poker tracker states that Will recently placed 259th out of 10,112 players in the World Series of Poker in Las Vegas earlier this month. Meanwhile, the company name itself, a bold strategy, seems to be working out so far.
“If you look under our logo, it says our names right underneath it. William, Torre Failla, and listen there’s going to be some pushback, but the amount of pushback we’ve had is so minimal that I think it’s worth it, and we’re going to stick with it as long as we can.”
Capify Appoints Think Business Loans Founder as Director of Strategic Initiatives
July 18, 2024
Capify, a leading SME lender, has appointed Jamie Stewart as Director of Strategic Initiatives. Jamie, the founder and former MD of Think Business Loans, brings extensive experience and SME expertise to Capify. In his role at Think, he successfully oversaw the deployment of over £1 billion in funding to more than 10,000 customers, prior to its sale to Bionic in 2019. Since then, Jamie set up Anidea, a Strategic Consultancy firm.
Jamie’s arrival marks another milestone during a significant growth phase for Capify. Having leveraged a new £100 million credit line from Pollen Street Capital earlier this year, the company has made a succession of senior team appointments recently and is actively developing an expanded product suite.
“I’m thrilled to join the team at Capify as Director of Strategic Initiatives,” said Jamie Stewart. “Capify is a pioneer in the alternative lending space, with a solid foundation and a clear vision for the future. As a forward-thinking entrepreneurial company with a new range of innovative products, Capify is poised for significant growth. I look forward to collaborating with the team to develop new partnerships that will further enhance our ability to provide quick, reliable funding solutions to SMEs.”
Founded in the UK in 2008 during the global financial crisis, Capify has become a vital financial resource for small and medium-sized businesses. Recognised for its commitment to excellence, Capify was awarded SME Lender of the Year (up to £1m) at the UK Credit Awards last year. Originally launched in the United States in 2002, Capify was one of the world’s first online alternative financing companies for SMEs. Since its creation, Capify has supported over 20,000 businesses and funded over £1.2 billion to help SMEs achieve their growth ambitions.
John Rozenbroek, COO/CFO at Capify, commented, “We’re delighted to welcome Jamie to the Capify team. His extensive experience in SME lending and his proven ability to drive strategic growth are exactly what we need as we expand our operations and introduce new products. Jamie’s insight and leadership will be invaluable in achieving our mission to support SMEs with the funding they need to thrive.”
“Jamie’s appointment underscores our commitment to strategic growth and innovation, ensuring it remains at the forefront of the alternative finance industry, delivering unparalleled service and support to SMEs in the UK”.
ABOUT CAPIFY
Capify is an online lender that provides flexible financing solutions to SMEs seeking working capital to sustain or grow their business. Originally started in the US over twenty years ago, the fintech business now operates in the UK and Australia and has served these markets for over 15 years. In that time, it has provided finance to thousands of businesses, ensuring the vibrant and vital SME community can meet the challenges of today and the opportunities of tomorrow.
For more details about Capify, visit:
http://www.capify.co.uk
Media enquiries
Ash Yazdani, Marketing Director
ayazdani@capify.co.uk
Fundfi Merchant Funding Expands Services to Canada, Paving the Way for Financial Growth and Innovation
July 11, 2024Fundfi Merchant Funding, a leading provider of innovative financial solutions in the United States, is excited to announce its expansion into the Canadian market. With a proven track record of empowering businesses to achieve their goals through strategic funding, Fundfi Canada Inc. is poised to bring its expertise and dedication to support Canadian enterprises.
The decision to expand into Canada comes at a time when businesses across North America are seeking reliable and flexible financial support to navigate economic landscapes and fuel growth opportunities.
By extending its services to Canadian businesses, Fundfi Canada Inc. aims to bridge the gap between financial needs and solutions, empowering entrepreneurs to thrive in today’s competitive market environment.
The expansion into Canada reflects Fundfi Merchant Funding’s ongoing commitment to innovation, growth, and client satisfaction. By leveraging its extensive experience and deep industry knowledge, Fundfi Canada Inc. aims to become a trusted partner for Canadian businesses seeking reliable and strategic financial support.
As Fundfi Merchant Funding embarks on this exciting new chapter, it invites Canadian businesses to explore the diverse range of financial solutions and opportunities available to them. Whether it’s funding for expansion, equipment upgrades, working capital, or other business needs, Fundfi Canada Inc. is dedicated to helping Canadian businesses thrive and succeed.
For more information about Fundfi Merchant Funding and its expansion into Canada, please visit www.FundfiMerchantFunding.com.
