Small Business Finance Industry Ponders Inflation, Changing Economic Conditions Ahead
July 1, 2022
“I think what’s really important is just the same for our businesses and any business, is being able to make sure that as things change, you’re updating and changing what you’re doing,” said Seth Broman, Chief Revenue Officer at Yardline.
With the constant changes in the economy, inflation being on the rise, and a rumored recession, businesses providing financing are analyzing whether or not their customers will be able to withstand challenging times ahead.
“For us a big factor is the increased costs of being able to source goods from overseas, for example, the challenges around getting those goods in a timely fashion,” said Broman. “That’s the first thing we saw. And then similarly, in the e-commerce space, you’re seeing brands that aren’t able to sell at the same level as they were beforehand.”
Like Broman, John Celifarco, a Managing Partner at Horizon Funding Group, acknowledges that inflation is directly affecting his customers.
“It’s definitely going to have an effect on the industry as a whole in terms of our clients, I’d say it’s going to affect certain ones more than others, depending upon how their business is structured, and what type of relationship they have with their customers,” said Celifarco.
And with recent concerns for a recession, Celifarco believes this won’t affect a client’s willingness to borrow but rather the ability to get them approved.
“Having seen this in the past, there have been times where the economy has slowed or there’s been a recession, and the customers still want money, but because of the trouble the businesses are having it’s a lot harder to get people approved on the lending side,” said Celifarco.
Not being able to access credit for customers is also an area of concern for Luis Hernandez, CEO of CapLadder.
“There are going to be more cash constraints in a recession. Obviously, funding companies won’t want to take on certain risks so they’ll obviously be more careful on how they disperse those funds just to make sure they’re getting paid back,” said Hernandez.
Hernandez suggests companies should limit hiring and expenses to better weather the storm.
“With the recession looming, and pretty much it is going in this direction, the best practices right now are what’s always been tried, which is, hold on to your reserves. Cash is definitely better in your pocket than out there,” he said.
The Company That Acquired Alchemy Technologies is a Small Business Lender
June 9, 2022
The sale of Alchemy Technologies to Business Warrior was announced on Thursday. The sale price of $8.75M ($2.25M in cash), is more than 3x Alchemy’s 2021 revenue of $2.8M.
While Business Warrior describes itself as “the source for small businesses in America to get more customers,” its homepage leads with a pitch for a working capital loan. “Our goal is to give you access to funding before you need it so you can grow without the restraints set on you by your bank,” the website says.
Business Warrior provides loans from $5,000 to $100,000 with interest rates as low as 7.97% and with terms between 12-36 months. It also offers marketing, software, and scaling solutions.
“After working with Alchemy, we quickly realized the massive potential of adding this international group of industry leaders to the Business Warrior team,” said Jonathan Brooks, Business Warrior President, in a press release. “With our Business Warrior platform, premium marketing, and now a global lending technology presence, we are building solutions that propel the success of small businesses.”
“We are so excited about joining the Business Warrior family!” said Timothy Li, CEO of Alchemy. “This move provides Alchemy with the additional resources, tools and capital necessary to enhance our service to customers. Both companies believe small business owners are the lifeline of local communities. By bringing Alchemy and Business Warrior together, the positive impact on these communities is going to be worldwide.”
Business Warrior is publicly traded under the ticker (OTC: BZWR).
Economic Hurricane? Timeless Advice For Your Small Business Finance Company
June 2, 2022
“You know, I said there’s storm clouds but I’m going to change it … it’s a hurricane,” said JPMorgan CEO Jamie Dimon about the current economic situation. “JPMorgan is bracing ourselves and we’re going to be very conservative with our balance sheet.”
At the very least, Dimon is predicting that a recession may be just around the corner. And if that’s the case, we dug up some timeless advice about how a small business finance company can brace itself for such a scenario. These quotes are from 2016 when economic experts were already beginning to wonder if the economy had already overheated, if you can imagine that.
“If the market moves sideways and you rely only on a single source of funding, you are at risk. It’s an incredibly obvious statement, but it becomes more acute when the economic environment comes under pressure.” – Glenn Goldman
“Liquidity is king. The more that participants in this market are able to diversify their capital structure, diversify their funding sources and work with multiple providers, the better off they will be.” – David Snitkof
“[Funders will have to decide] to tighten and pivot while the rest of the players in the space are going full steam ahead. That’s where you have to have some conviction and trust your data and do the right thing.” – Stephen Sheinbaum.
“Just because someone paid you back yesterday doesn’t mean he’s going to pay you back tomorrow. You have to be right more often in a recessionary environment.” – Andrew Reiser
“A small recession could lead to big failures if you don’t take the right steps.” – Yoel Wagschal
In April 2016, when recession predictions were making the rounds, the S&P 500 was ~2,000, Bitcoin was $450, Ethereum was $8, gas was ~$2.20/gallon, and few, if any people, believed that Donald Trump would ever become President.
New Domain Name Gold Rush Sets Up Possible Battle for Future of SMB Finance
April 25, 2022
If you could have businessloan.com or businessloans.com as your website, would you jump on the opportunity to get it?
It’s evident that the market for keyword-based domains has evolved over time. Couldn’t get the .com? You could’ve tried to get the less coveted .net or .org. Don’t like those? Today, you can get the .business, .deals, .financial, .loan, .loans, or hundreds of other customized tlds. With so many to choose from, most experts in the field would advise that if you don’t own the .com version, to not even bother getting cute with customizations for your brand or keyword because customers will just get confused.
But recently, another domain name market has quietly been gaining steam. It’s for something called a .eth, an Ethereum blockchain-based crypto address shortener by the Ethereum Name Service. It’s not necessarily something one could use to build a website with, at least not yet. Originally envisioned as a way to condense long impossible-to-remember crypto wallet addresses into memorable words, users have started to buy up a bunch of keywords that may be familiar to AltFinanceDaily readers. Just to name a few:
- businessloan.eth
- businessloans.eth
- smbloans.eth
- merchantcashadvance.eth
- ach.eth
- syndication.eth
- lending.eth
- ppploan.eth
- underwriting.eth
- brokers.eth
- loanbroker.eth
- mca.eth
- factoring.eth
- funding.eth
- backdoored.eth
At face-value, this might appear to be a vanity crypto play, one in which one could send crypto to your-name-here.eth instead of trying to type out a long address like: 0x64233eAa064ef0d54ff1A963933D0D2d46ab5829. But an ENS domain name holds much more potential than just that. It’s moving towards becoming the backbone of one’s identity in the upcoming era of the web called web 3.0 (web3 for short). Instead of having to remember passwords for hundreds of websites, identity can be validated through one’s digital wallet. Such a concept is not theoretical. It’s already being used.
Take seanmurray.eth for example. You could send eth, bitcoin, litecoin, or dogecoin to it, but at the same time it’s connected to an email address and a url (this one). Plus it’s linked to an NFT avatar (broker #7 from The Broker NFT collection) which is in that wallet. I can use it to do an e-commerce online checkout in 5 seconds without ever needing to enter any payment information even if I’ve never visited the site before. It’s faster than PayPal and with less steps involved. I can connect it to my twitter account, OpenSea, or use it to vote in an official poll without ever having to create an account on something. The wallet is the identity verification. The .eth name, therefore, has the potential to become the defining baseline of who or what one is on the internet. Not theoretically. It’s already happening.
Crypto is already starting to creep into the small business finance industry. In August, a funding company announced that it would begin offering commissions and fundings in crypto because of the speed potential. Far from being a gimmick, brokers started to choose crypto payments over ACH or a wire because of how fast it would be. There’s also no chargeback risk with crypto.
Currently, the owner of mca.eth has listed the domain for sale on OpenSea at a price of 20 eth (approximately $60,000). That’s less than what MerchantCashInAdvance.com sold for in 2011. Perhaps the value of an Ethereum Name Service domain holds less promise than a website that ranked well on Google in 2011. But then again, being well ranked on Google is not as important as it used to be. It’s impossible to say what, if any impact web3 will have on the small business finance industry long term, but for now there are those out there quietly buying up names like ach and funding and syndication on the chance that they will become something.
Small Business Finance Industry Mulls What’s in The Rearview, Is Optimistic For Rest of 2022
April 14, 2022
The small business finance industry is looking ahead to anticipated growth for the remainder of the year, despite new challenges ahead. With massive government aid fading in the rearview, some industry players now have had the time to consider what the impact of it was as they move onward into the future.
Bob Squiers of Meridian Leads expressed his view on the topic, “a lot of our customers, mostly the ISO shops, many of them converted and started selling and pitching the government programs. So in that sense it kind of helped keep those guys afloat, helped keep our business going. A lot of what we do in the marketing side, translated for those government programs. But then it did also squash the demand for the cash advance.”
In some cases, government funding has helped merchants pay off pre-existing obligations in a timely manner. Matthew Washington, founder and CEO of Moneywell GRP, noted, “An educated business owner is using the financing options available as they see fit for the timing. Someone that is waiting to get an SBA or an EIDL is more susceptible to take a bridge product to get them through that time gap,” he said. “As long as you’re working with the merchant and pushing out good products and you know what is on the rise, I think it has done nothing but help in some cases.”
Trucking became one of the number one fields that made up a large percentage of submissions during the pandemic, industry insiders say. However, with gas prices increasing, business with trucking could go down. Other businesses such as restaurants, where only a third received funding last year from the government, are desperate for funding.
“There’s tons of restaurants left that haven’t yet received their funding. So we could be seeing a lot of exposure in that industry,” stated Michael Yunatan of Specialty Capital. “But overall, I definitely do feel that we’ll be seeing an uptrend in our numbers across the board.”
“We definitely do think the industry is growing as a whole,” said Yunatan. “Even though we are a new player in the space we have been growing.”
Chad Otar, founder and CEO of Lending Valley, said, “We need to keep monitoring the interest rates that are coming up from the Federal Reserve, we need to make sure we’re not heading towards a recession, we need to make sure that we’re able to fully have the capital ready, in order to be able to deploy at a reasonable rate.”
Otar acclaimed the indirect benefit of large tech companies operating in the space with a competing product, arguing that the presence of PayPal and Amazon are helping to bring exposure to the industry overall.
“And now that Kabbage is back as well, since they partnered up with American Express, it’s gonna help us out to be able to push the product more into the mainstream,” said Otar. “So I believe there will be a growth in the industry.”
Brokers, Funders Find Their Footing and It’s Back to Business
April 12, 2022
For Mike Brooks, CEO of Best Connect Capital, the deal making never stops. A former boxing trainer turned funder said that there are no days off. “I’m always funding, I am always, always funding,” he said.
Recently, Brooks has taken an interest in text message marketing. “I’ve had trouble finding somebody in text marketing,” he said. I was going on the internet and using word of mouth, and I wasn’t really able to connect with anybody. I hooked up with this company [in Miami], and it worked out really well. I already funded a couple of deals.”
Around the industry, brokers and funders have found their footing after Covid. A recent mass gathering in Miami definitely helped push things along. “The second I got off the plane in Miami this year, I saw an old friend, a business associate,” said Brooks. “That was a great connect right there.”
Nicholas Saccone, Senior Funding Advisor at Proto Financial had a similar experience. “Having the opportunity to meet up with some of our partners face-to-face [is] a really cool experience,” said Saccone. “Sometimes it is hard to find time to build relationships with all of our schedules. [Through networking] I’m able to get different perspectives on where the industry is headed and where we are now.”
“Small business lending is on the up and up,” said Frankie DiAntonio, CEO of Lexington Capital, who also ventured down to Miami with his team from Long Island. “With inflation going up, we’re finding that small businesses are outsourcing their need of funding outside the government, and there are companies like us that can come in and take care of them.”
DiAntonio spoke about how important it is to sell legitimacy to both his lenders and staff. “We’re the new kids on the block, we’re a newer company,” he said. Despite the head start his competitors may have, DiAntonio said that old school sales mentalities combined with modern marketing strategies have recently helped his company consistently fund deals and build a book of business.
“We bring in a lot of Google click ads which brings us a lot of leads, but obviously our guys just make phone calls throughout the day, as much as humanly possible,” DiAntonio said. “My guys know what they’re doing, they know the industry, they’re really good on the phones, and they know how to take care of customers.”
Clearco to Invest €100 Million into Digital-First Irish Businesses
April 6, 2022
Clearco, the world’s self-proclaimed largest e-commerce investor that provides revenue-based financing capital solutions to e-commerce businesses, is making yet another move. Directed by CEO Michele Romanow, a star in the hit TV show “Dragon’s Den,” Clearco recently announced that it will be introducing its product to Irish founders and entrepreneurs. Upon continuation to support the 15+ % growth predicted in the Irish economy in 2022, the company plans to put €100 million into digital-first Irish businesses.
An international sales and business development hub has been developed in Dublin. The Clearco team currently consists of 75 members with a plan of adding 125 employees in the future. This will support Clearco’s plan to grow in Europe, North America and Asia Pacific in 2022.
This year Clearco plans to expand its products and services within current European operations and into new key markets across the continent. This includes Western Europe, Central Europe and the Nordic region.
Clearco has invested over $3.2 billion globally into 7,000+ businesses across three continents. Ireland is the fourth international market for Clearco. To be able to serve as many founders as possible internationally, the creation and development of its sales and development team is key.
Romanow stated “Clearco is excited to bring our revenue-based funding model to Irish founders. Ireland has one of Europe’s strongest economies and a dynamic start-up sector. We are confident that we will have a meaningful impact on the Irish e-commerce economy. Clearco is excited to establish this International Sales hub in Ireland to support our growth in the EMEA region. We’re impressed by the talent and tech skills here and I look forward to building the team to serve our growing customer base.”
Businesses in all 50 states have been funded by Clearco within the US market. However, over half of the company’s funding goes to businesses outside of California, New York, Illinois and Massachusetts, which received about 70%. Clearco believes the same trends will be seen in the Irish marketplace as they hope to help fund traditionally underserved communities.
AltFinanceDaily is Holding Auditions for First Musical
April 1, 2022April Fools 22
deBanked is thrilled to announce that we will be producing our first musical this summer, A Broker’s Life, a fun and witty twist on the life of a broker while still focusing on everyday reality.
Calling all brokers with dance and/or singing experience! Seeking strong male and female dancers with a ballet/modern dance background. At least 2 years of ballet training is a requirement. Training in tap is a plus! Please wear form fitting clothing appropriate for dancing. Ballet, jazz shoes or bare feet is acceptable for the choreography portion of the audition. Tap shoes must be worn when necessary.
For the singing section please prepare your best 16 bars (approximately 30 seconds with sheet music) accompanied by a jazz or contemporary song about funding small businesses that showcases your vocal range.
We are looking to cast roles of brokers, lenders and extras. The lead broker role must be able to dance and sing. The lead will need to perform multiple solo variations along with vocal pieces. Looking for big personalities, with a large stage presence. Lead casting director John Remming, producer Dean Louis and choreographer Larissa Brulato will be viewing and judging all audition tapes.
Please send us an email with a link to your video to info@debanked.com containing the following:
- Video of yourself performing six eight counts of ballet/modern improvisation, incorporate technique in your variation such as grand jeté battement, pirouette and pirouette a la seconde.
- For the tap portion, improvisation for three counts of eight is acceptable.
- Utilize spacial variety, do not remain stationary.
- If you are auditioning for a singing role, audio in video must be clear.
- Facial expressions for the stage are encouraged.
- Your current headshot and resume as PDF attachments.
Email submissions are due by April 25th.
Second call auditions will be held in person with a dress rehearsal. Costumes and makeup artists will be provided upon call time.
Performer at heart? Think this is the role for you? Apply now to become the musical face of AltFinanceDaily!
April Fools!
