ForwardLine, One of the Original Funding Companies, is Back
June 5, 2019
Steve Carlson, CEO, ForwardLineForwardLine Financial originated well over $65 million in loans in 2018, according to CEO Steve Carlson. ForwardLine would not share its origination numbers, but Carlson said the company is comfortably on the AltFinanceDaily list of top originators. ($65 million is the lowest origination number on the list).
Last week, the company announced that it secured a $100 million credit facility from Credit Suisse AG and Neuberger Berman private equity funds. This is the company’s largest credit facility to date. Its previous credit facility was with East West Bank and that relationship is still in place.
ForwardLine is a direct marketer that provides working capital loans of up to $200,000 to small businesses.
Carlson told AltFinanceDaily that ForwardLine, which was founded in 2003, has been scaling its business dramatically over the past year and a half. This is no coincidence. Instead, Carlson said this is the result of years worth of planning following a majority investment in ForwardLine in 2015 by a private equity firm called Vistria Group.
“We spent 2016 and 2017 very thoughtfully building out a technology platform, a data infrastructure, and a management team to scale the business,” Carlson said. “We’re now actioning on that plan. So this is all part of a multi-year strategy.”
A company statement said that the company’s loan performance in 2018 was record-breaking. ForwardLine increased year-over-year total originations by over 300% in the first quarter of 2019.
Carlson said that the new facility will be used primarily to grow the business. ForwardLine is located in Woodland Hills, CA, and it employs 110 people, more than half of whom work in the sales department. Other employees include underwriters and data and analytics people.
Liquid FSI Partners With Stackfolio
May 28, 2019
Liquid FSI announced today that it has entered into a joint venture with Stackfolio, an online loan marketplace, which allows small banks, hedge funds and credit unions to buy and sell loans. Liquid FSI funds mostly doctor’s offices, as a factor, and it also builds financial technology products to make it easier to fund healthcare providers.
Through this new partnership with Stackfolio, all of Liquid FSI’s applicants will now automatically be posted to Stackfolio’s marketplace. Since Liquid FSI is a funder, why send deals to the competition?
“Just like there’s a college for everyone, there’s a loan [or type of funding] for everyone,” said CEO of Liquid FSI Frank Capozza.
And for deals that come from Liquid FSI but are funded elsewhere on the Stackfolio marketplace, Liquid FSI will get an origination fee and a transaction fee.
Capozza said that their proprietary technology gives banks a far clearer picture of the finances of medical offices, which can be risky to fund because insurance companies often pay a fraction of what doctors bill.
“Now they don’t have to turn business away,” Capozza said of banks that have declined medical offices because of imprecise data which he says Liquid FSI provides.
From Stackfolio’s CEO, Pavleen Thukral, “We are excited for this new partnership with Liquid FSI. It not only aligns our view of the loan trading and origination markets moving online, but more critically for our clients, it helps fill a loan growth gap with commercial and industrial customer opportunities in the healthcare industry.”
In conjunction with this new partnership, Capozza said that he is in final talks with a 55-person, California-based brokerage that will help increase medical office applications to Stackfolio, via Liquid FSI.
“We’re the acquisition engine,” Capozza said.
He said that this brokerage, to be announced at the end of the week, will have its people on the phone and on the ground (i.e., pitching doctors in their offices). Brokers will get a percentage of the origination and residuals on monthly factoring transactions.
Funding Circle SME Income Fund to Consider Winding Down
April 6, 2019The Funding Circle SME Income Fund (FCIF), a fund whose objective is to provide shareholders with a sustainable and attractive level of dividend income by lending, both directly and indirectly, to small businesses through Funding Circle’s platform, may soon be winding down. Earlier this week, the fund’s major shareholders expressed a desire to withdraw their capital and a vote will be scheduled to put this plan in motion.
The decision is not a surprise. The fund suffered a sharp decline in Net Asset Value late last year in part due to increasing business loan defaults.
Funding Circle Holdings (FCH), which trades on the London Stock Exchange, announced that a windup of FCIF would not affect the overall company’s 2019 guidance.
FCH CEO Samir Desai said of the news, “A global income fund providing access to a diversified portfolio of Funding Circle small business loans was the right strategy for investors and Funding Circle in 2015. However, there are now more appropriate and varied ways for investors to participate on the platform. We’re pleased to soon introduce two new investor products to the UK market. They will further expand the universe of investors that can access loans on our platform and continue to diversify our sources of funding, in line with the strategy we set out at IPO.”
Give Up Equity In Your Business?! Try Alternative Funding Instead
April 4, 2019One thing you can’t get back is your company.
Michele Romanow, a judge on Dragon’s Den, Canada’s version of Shark Tank, realized from the show that a lot of companies should not be pursuing venture capital at all. She recalled a company that was willing to give an investor 25% of their company in exchange for $100,000.
“Why use the most expensive form of capital, which is equity?”
It led her to co-found Clearbanc, a Toronto-based small business funding provider that does their own spin on merchant cash advances. The amounts range from $10,000 to $10 million and their caution against equity capital-raising is explicit.
“No equity, no fundraising, no dilution, no warrants/no covenants, no board seats, and no bullshit” is a pitch prominently displayed on the company’s homepage.
Romanow speaks from experience. In 2014, GroupOn acquired a company she co-founded and she joined Dragon’s Den shortly after at just 29 years old. She’s a serial entrepreneur with a net worth reported to be over $100 million.
VC money may be harder to obtain, regardless, even if an entrepreneur is willing to make the sacrifice. Funding from VCs tends to be unequally distributed geographically. She cited a May 2018 report by PwC and CBInsights that showed that more than half of all VC dollars invested in small businesses and startups during the first quarter of 2018 went to companies in California. And 80% of VC money in that quarter funded companies either in California, New York, Massachusetts or Texas, a trend bucked by alternatives provided by companies like Clearbanc whose backgrounds are much more diverse.
The message has worked. Clearbanc recently announced that it plans to invest $1 billion in 2,000 e-commerce companies within the next 12 months and the company has raised more than $120 million to-date. It probably helps that Romanow is a TV business celebrity. She is now on her fifth season of Dragon’s Den. And as for those pesky VCs? They tend to be big referral partners for Clearbanc. Go figure.
Kapitus Rolls Out Fully Automated Funding Process
April 2, 2019
New York, NY – Kapitus, a leading provider of alternative financing to small and midsize businesses, announces the roll-out of auto-checkout – a fully automated funding process for qualified deals. The new process allows for not only a faster, more streamlined experience for its partners; but it also provides more flexible financing options, by providing multiple offers at once. At the same time, the new process provides merchants with secure and quick access to funds for their business.
Unlike competing models where only an “option of approval” or “conditional approval” is provided at the time of checkout, Kapitus is able to determine approval eligibility with only an application and bank statements without the need for multiple upfront stipulations to confirm bank information, ownership and identity. Utilizing proprietary machine learning models – eligible deals can be closed without any additional documentation.
“This is a true turning-point for us from a technology perspective and we’re very excited about it,” said Andrew Reiser, Chief Executive Officer at Kapitus. “With this new automated process, we’re able to provide our partners an extremely simple process with an exceptionally quick time-to-funding. At the same time, merchants are provided with a more seamless experience with enhanced security”
Major features in the roll-out include:
- True auto-check functionality with full approval at time of checkout
- Progress tracking and customizable notifications to follow merchants through the checkout process
- Intuitive user interface with precise, easy-to-understand instructions for both merchants and partners
- Simple, seamless secure checkout functionality for merchants
“This is the first of many technology advancements we will be rolling out over the next year,” adds Arun Narayan, Chief Product Officer. “We are committed to creating exceptional experiences for both our partners and merchants. Incorporating the right technology is paramount in building out the right environment and the best experience for all of our audiences.”
ABOUT Kapitus
Founded in 2006 and headquartered in NYC, Kapitus is one of the most reliable and respected names in small business financing. As both a direct lender and a marketplace built with a trusted network of lending partners, Kapitus is able to provide small businesses the financing they need, when and how it is needed. With one application business owners can save time and money, while eliminating the stress that comes with applying to different lenders. At Kapitus, we believe that business owners should be able to focus on running their business, while we take care of the financing. Learn more at https://kapitus.com
CONTACT: Bernadette Abel
Kapitus
babel@kapitus.com
646-722-1484
Small Business Funding is Blasting Off
January 18, 2019Despite the pall of the record long partial government shutdown which has hurt brokers and funders of SBA loans, many companies and individuals in the online small business funding space are off to a very fruitful 2019. Below are some that we found.
After 15 years in the screen printing and embroidering business, Edward DeAngelis spent about four years learning the online funding business before creating Amerifi, a small business funding brokerage. Amerifi and DeAngelis, its CEO and founder, have had a very strong 2019 so far. Since January 1, DeAngelis said that Amerifi has facilitated $7,420,667 in funding. This is compared to $1,284,890 for the entire month of January 2018.
DeAngelis attributes this in part to his increasingly diversified product offering. Amerifi, located in Broomall, PA, offers term loans, asset backed loans, lines of credit and merchant cash advances, among other products. He said that he’s trying to develop a brand known for funding every deal, large and small. He also said that developing a solid team, which now includes eight salespeople, is very important.
“I’m not one for high turnover,” DeAngelis said. “I invest in my team. I spend plenty to provide good leads to all my guys and I treat my team well.”
DeAngelis said he provides his whole team with health insurance. Founded in March of 2017, Amerifi has so far brought nearly $49 million of funding to American small businesses.
Co-founder and CEO of Idea Financial, Justin Leto, said they have seen an uptick in volume starting in December of last year and carrying over into 2019.
“In the first week or so of December the volume wasn’t as high as we thought,” Leto said. “But then all of a sudden as we got to the end of the year, even up until New Year’s Eve when we thought there would be nothing going on at all, the volume was tremendous. And it wasn’t volume that we were just declining. It was really good paper coming in. And it has continued through January. The paper has been solid. The quality of the deals are very good.”
Idea financial, based in Miami, FL, provides a line of credit product, with 12 and 18 month repayment periods.
“We have a 650 minimum FICO, so we have to get the higher credit quality merchants,” Leto said. “And they’ve been coming. What I’ve seen is we have an approval for $100,000-$150,000 and it’s rare that anybody takes the full amount…If people are taking a percentage of the line and using it over time and continuing to draw over time for different projects, I think that’s a sign of a responsible borrower…I don’t see a recession coming.”
CEO of Accord Business Funding, Adam Beebe, told AltFinanceDaily that it was doing about double the amount in funding this month compared to last January. Completely ISO driven, Beebe said that submissions over the past month or so have been up 30 to 40 percent but couldn’t attribute it to any one specific thing.
Founded in 2013, Accord funds MCA deals exclusively and employs over 20 people in its Houston-based office. Last year, it made a key hire to expand its marketing efforts.
“I’ve had more deals in the last two weeks than during any other two week period last year,” said Jarret Ortmann, Senior Lending Officer at Ironwood Finance in Corpus Christi, Texas.
He also said that he’s been seeing more deals coming in from his brokers. Ironwood provides working capital, equipment financing and collateral lending.
Why Strategic Funding Rebranded as Kapitus
January 15, 2019
Today, Strategic Funding announced the launch of a new brand identity, including a name change. Strategic Funding will now be called Kapitus.
“We had a name that was very well respected,” said Kapitus founder and CEO Andy Reiser. “Everybody loved our name, quite frankly. They loved it so much, they all copied it. You can’t trademark ‘Strategic Funding.’ It’s too generic.”
Kapitus, spelled this way, is not a word in any language, which makes it easier to trademark.
“We wanted to separate ourselves in a way that is clearly identifiable,” Reiser said. “It’s an easy one-word name [that] symbolizes stability and strength. It’s ‘capital from us,’ if you want to break it down.”
Reiser said that the company has been relatively quiet over the last three years, but they have been advancing all along, and they are particularly proud of their brand new ISO portal. According to Reiser, the new portal helps ISOs better understand their book at Kapitus and allows brokers to generate a contract quickly without having to call them. The company has an in-house marketing team, but well over 50% of its business comes from the ISO channel.
Kapitus provides a variety of financial products, including equipment financing (they have an in house equipment leasing division) and factoring (they have a small internal factoring group). They also offer business loans, lines of credit and MCA deals. But the company’s largest portion of its business – more than 15% – comes from its Helix Healthcare Financing product, which finances healthcare practitioners like doctors, dentists and veterinarians.
Unlike other funders of healthcare practitioners that may offer financing terms up to 18 months, Kapitus offers terms of up to 10 years as long as the merchant satisfies its requirements. The company also funds a considerable number of healthcare-related businesses, like medical equipment providers. Otherwise, Reiser said that Kapitus has a diversified mix of merchants, from restaurants to manufacturers.
Reiser said that about 15% of Kapitus’s business consists of deals above $150,000 for which they have a seperate team. They do deals as high as $750,000.
When operating under the Strategic Funding name, there was a payment servicing division of the company, called Colonial Servicing. That entity will remain, but will be woven into the new Kapitus name.
Founded in 2006, Kapitus employs 240 people divided among three offices. The headquarters is in New York and there is an office with about 30 people in Arlington, VA, and a Dallas-area office with about 35 people working in collections and customer service.
Strategic Funding Source Announces Launch of New Brand Identity; Unites its Funding Arm and Servicing Arm Under the name Kapitus
January 15, 2019New York, NY – January 15, 2019 – Strategic Funding Source, a veteran of the small and medium-sized business alternative lending space, today announced the launch of a new corporate brand identity, including a new name. As part of this rebrand, the funding division and servicing division will be united under the name Kapitus. The unification of these two divisions will allow for an improved experience for both clients and partners.
Since its inception in 2006, Strategic Funding Source has provided over $2 billion to almost 40,000 businesses in hundreds of industries across the U.S. Over the past two years, the organization has been proactively building out its executive team, bringing in a wealth of experience to transform its risk model, underwriting processes, lending capacity and product line, technology capabilities and customer experience.
With these and other planned advancements, the company required a new brand that better reflected the company’s commitment to be a reliable source of capital to all small and mid-sized business owners.
“The small business lending landscape is consolidating around a few strong and reputable companies. Over the last several years, Kapitus has experienced tremendous growth both in its product offerings to small and medium-sized businesses and in the total number of businesses it serves” said Andy Reiser, CEO of Kapitus. “We chose a name and identity that represents our strength and stability as well as our promise to be a responsible and fair source of capital to small and medium-sized businesses nationwide.”
Along with the name change there will be a new logo, tagline (“Let’s Grow Together”) and domain name (kapitus.com). The rebrand is the first step in the company’s strategy to grow its own financing product line, add to its marketplace of 3rd party lenders and create a foundation for new partnership opportunities. The new brand also represents the company’s commitment to keep the human touch throughout the financing process, while improving customer experience through technology to aid the decisioning process and improve speed to funding.
“This is an exciting change for us,” added Reiser. “This new branding builds upon our history and pays allegiance to our standing as a leader in a fast-evolving industry, opening the door for future opportunities for us, our clients and our partners.”
About Kapitus
Founded in 2006 and headquartered in NYC, Kapitus is one of the most reliable and respected names in small business financing. As both a direct lender and a marketplace built with a trusted network of lending partners, Kapitus is able to provide small businesses the financing they need, when and how it is needed. With one application business owners can save time and money, while eliminating the stress that comes with applying to different lenders. At Kapitus, we believe that business owners should be able to focus on running their business, while we take care of the financing. To learn more, visit www.kapitus.com.
