Funding Circle Partners With Nationwide in Mutual Referral Program
February 1, 2022
Denver-based small business lender Funding Circle announced a partnership with Nationwide Insurance, in a move designed to improve access to capital for businesses that use Nationwide as their insurance providers. The move is a continued trend in the small business financing industry to create access to resources surrounding business financing in places that merchants are interacting with on a daily basis.
“Funding Circle is thrilled to partner with Nationwide to offer essential resources that seamlessly supplement our customers’ business needs and set them up for success in a competitive market,” said Vipul Chhabra, Managing Director of Funding Circle US.
“This first-of-its-kind partnership with one of the country’s leading insurance and financial services providers embodies our core values,” said Chhabra. “[Our values are] to truly support American small business owners in accomplishing their goals, especially among underserved populations that banks typically are not incentivized to reach.”
On top of access to funding, the partnership offers access to resources surrounding small business financing to Nationwide customers. According to a press release by the companies, this is the first merger of a top insurance company with an online lending platform.
“Today’s hardworking business owners have a variety of insurance and financial needs. They are looking for innovative ways to have those needs met so they can focus on running their companies,” said Kasey Ketcham, Associate Vice President of Commercial Digital Enablement at Nationwide.
“This partnership with Funding Circle is another example of Nationwide’s commitment to addressing the challenges small business owners are facing,” said Ketcham. “[Nationwide is] offering expert guidance and comprehensive insurance and lending resources hand-in-hand to help them make informed decisions to fortify their business and livelihoods.”
According to Nationwide, the partnership will be a mutual referral program, where Funding Circle customers will be exposed to Nationwide products, and Nationwide customers will be exposed to Funding Circle products. Nationwide representatives explained the partnership exclusivley to AltFinanceDaily.
“Exactly what is provided through Nationwide.com or the app is a link to Funding Circle,” said a Nationwide representative. “Once there, the user can complete an application for loan coverage, but are not granted special exception because they came from Nationwide.”
“They would still go through the loan application and underwriting for funds and vice versa,” said the representative. “The Funding Circle website/app is providing a link to Nationwide that the user can ‘learn more’ through the Coverage Assistant page, or “get a quote” using Nationwide Business Express.”
Why FundThrough Acquired BlueVine’s Factoring Business
January 13, 2022
“I know it might seem sudden for you, but we’ve been engaged in discussions since the Summer, and [BlueVine] has been in discussions internally for certainly longer than that.”
FundThrough announced their acquisition of the factoring division of BlueVine on Thursday. A deal that has been long in the works will make the Canadian factoring company’s American portfolio 80 percent of their business.
“From FundThrough’s perspective, we’ve always had BlueVine’s factoring business on our radar,” said FundThrough’s Co-founder and CEO Steven Uster, exclusively to AltFinanceDaily. “We started around the same time, they grew their business nicely, and then they started to branch out to other products.”
Uster spoke about BlueVine outgrowing their factoring business, while FundThrough was growing enough to acquire it. “From the outside looking in, it looked like this might’ve been turning into a non-core asset for them, but yet very core for us.”
For FundThrough, the move is substantial. The company has acquired their largest competitor’s inaugural product. According to Uster, the move brings two companies together who are starkly similar in more ways than just the product they sell.
“We share similar cultures, we’re much smaller obviously as a whole, but our factoring business is bigger,” he said. “We share a similar mindset, we’re also a technology based business, our systems are quite similar, so the move [will] be an easier, elegant transition.”
“We determined that FundThrough is perfectly positioned to serve our factoring clients with the care and individual attention they need and deserve,” said Eyal Lifshitz, Co-founder and CEO of BlueVine. “Our factoring clients will be in great hands with FundThrough.”
Lifshitz spoke on his company’s growth, and how the move will allow the company to focus on better serving their existing customers. “Since launching BlueVine, we’ve been focused on the financial needs of small businesses and are very proud of what we’ve been able to accomplish. As we evolve our products and services, we continuously examine how we can better serve our customers at scale.”
According to Uster, fintech-inspired invoice factoring has sparked unprecedented interest in the financial world lately. While he is unsure of the reason, the engagement and inquiries FundThrough has received prior to the acquisition have been significantly higher than in the past.
“Something shifted over the last twelve months,” Uster said. “All of the sudden, without much branding, we have been getting a bunch of inquiries about partnering and providing this embedded invoice factoring solution.”
With their acquisition comes confidence, and it sounds like FundThrough is ready to be on the forefront of tech-infused financing. “[The acquisition] provides us the scale to be the partner of choice. We are now the players in the market,” Uster said.
“If you want to offer tech enabled instant funding on invoices in your B2B marketplace, FundThrough is now the solution.”
Five Things Small Business Financing Should Look out for in 2022
January 3, 2022
With another year in the books, below is a list of things that the small business finance community should think about in 2022.
Disclosure Laws are Coming
The laws in New York are changing. While the date for the new law was pushed back at least until June, the state is about to make it very difficult to finance small businesses. California, New Jersey, Maryland, Connecticut, and North Carolina are among other states to also keep an eye on regarding disclosures in 2022.
Blockchains, Blockchains, Blockchains
Regardless of the legitimacy of things like cryptocurrencies and NFTs, blockchain technology is on its way to the initial states of implementation in the financial world. In a further effort to eliminate paperwork, redundancy, and time, the idea of a decentralized ledger has all corners of the financial world watching closely.
Merchants are Becoming Digitally Native
As business owners are continuing to emerge as younger and more technologically sound, lenders should embrace fintech in any area of their processes that they can. Just to appear as a tech company may become a marketing strategy for some brokers or lenders, as those who offer the smoothest, simplest, and most technological form of funding will win over their competition with this new emerging business owner.
Brokers Using Motivational Social Media Posts to Develop Brands
As small business financiers continue to try and find their place on social media, there seems to be a gathering of those in the broker space to create motivational content. Keep a lookout for more brokers to continue internet marketing via motivational posts to not only give a face to their company, but legitimize themselves as a go-to in the space; so maybe they can launch some type of broker training program in the future.
Networking Will Continue to Re-Emerge as Top Tool
As 2021 concluded with in-person events slowly approaching normalcy after pandemic induced restrictions, the industry is showing an unprecedented amount of desire to get together multiple times a year to build their books of business. Look for events across finance, technology, and cryptocurrency spaces to increase in both numbers and attendees.
Nuula, Still in the Business Lending Game, Lays Groundwork for Larger Ecosystem
December 29, 2021
Nuula, formerly known as BFS Capital, has 5,000 merchants on a waitlist to access a line of credit after just four months of its application process being made available.
But there’s more.
“Nuula is built to not only deliver our own financial products, but it’s developed to help us provision and deploy third party financial products that come from our ecosystem,” said Mark Ruddock, Nuula’s CEO. “So what we’re trying to do here is not really be a broker, but we will carefully curate products.”
“That could be larger, longer loans from one partner, it could be insurance from another partner, it could be entrepreneur wealth management from a third partner,” he continued.
“So we bring those partners onto the platform, and then we expose their functionality within the app, in a way that’s consistent with all the other tools in the app. So yes, there is room for third party lenders.”
Ruddock spoke about how as of now, Nuula’s infrastructure only offers opportunities to those interested in directly funding businesses. The company profits via revenue sharing when businesses are provided with capital from a third party funder on the platform.
Despite not being available yet, he hinted at possibly incorporating broker-esque products as the app’s financial product suite grows.
“Today, we don’t see a near term role for brokers on the app, because we’re not really trying to create a marketplace of a multitude of products, we’re really trying to curate things very, very carefully,” said Ruddock. “However that’s not to say say that we will not over time provide the ability for the more digital brokers or intermediaries to play a role as we seek to broaden the portfolio of tools that we offer.”
“I would say no to brokers in the sense that we really don’t have a compelling offer for them at the moment, but yes to other financial services providers.”
Ruddock described how Nuula is serving a niche customer base, a tech-centric merchant who is looking for an easy-to-use mobile software that can manage their businesses’ X’s and O’s. Not only is this type of merchant underserved and beginning to substantiate in numbers according to Ruddock, but they are extremely eager for access to capital.
“It’s a fundamental change in the way underwriting has been done, away from kind of a rearward looking model, towards a real-time forward looking model, and that’s what we believe is going to be required to unlock capital to this new generation of businesses.”
“[Nuula] reimagines underwriting in a way that says ‘don’t just look at the last six months of bank statements’,” Ruddock said. “[We] look on not only of the day of lending, but the lifetime of your relationship, and how those businesses are recovering, growing, and thriving.”
He spoke about how with real-time data being accessible through Nuula, businesses that are building their creditworthiness can have a mobile reference point for the data that they need to see their real-time financial state, while simultaneously giving lenders a live picture of the businesses’ books.
“So even if a business is not strong enough for credit today, it might be in three months, and we can go watch your progression through this period and unlock the capital when the time is right, and then if that business grows out of the pandemic and recovers and is stronger, we’re going to be able to a broader and richer portfolio of credit.”
Although their target customer seems to be a digitally native merchant, Ruddock says that Nuula’s onboarding process is designed to be simple enough for a merchant who may not be as familiar with fintech.
“I’m a fifty-plus year-old CEO of a fintech company, and I would say I’m as digitally savvy as a twenty year-old, so it isn’t really about age anymore,” said Ruddock. “It’s by the way which [merchants] have embraced technology.”
“What we’ve done with Nuula is we’ve tried to make this product intuitive and simple for a first time app user and we’ve tried to help these folks get access to the data that now is sitting in a multitude of systems. While we believe people who have grown up in an app-centric world are going to be amongst the first adopters, we’re trying to make this product accessible for the fifty year-old restaurant owner too.”
Nuula plans on expanding their data harnessing tools with other fintechs early next year. “Over the next two weeks, we will actually unlock the ability for [merchant] sales data from Shopify or Square,” said Ruddock.
Velocity Group USA Names Keith Nason President, Launching KapSource in Q1 2022
December 16, 2021
Melville, NY – December 16th, 2021 – Velocity Group USA is pleased to announce Keith Nason as the newly appointed President. In conjunction with stepping into the role as President, Nason will continue to hold his position as Chief Operating Officer, building on business development strategies and appointing new members of Velocity Group’s executive team.
“We have undergone many necessary changes over the past year, but the change we are most excited about is appointing Keith Nason as the President of Velocity Group. He has extensive industry experience, as well as the knowledge, innovation and vision to drive growth in 2022. I have no doubt these qualities will help set us apart from our competitors as we continue to expand our business,” said Lisa Gioia, Chief Executive Officer
Nason is an industry veteran with over eight years of experience within the Merchant Cash Advance market, specializing in both top and bottom-line growth, building infrastructure and security, data integrity, risk models, technology, and securing capital through multiple channels.
“Over the last 12 months, we’ve invested a tremendous amount of time, energy, and capital in our team, product, infrastructure and data security, as well as our process. Doing so has positioned us for significant growth in 2022 and beyond,” commented Nason.
He also credited his institutional investors as being a key to success by having faith in the long-term goals of the company, and confidence in the new team to prioritize long-term success over strictly short-term returns. Nason also stated, “It’s a true testament to the team that we were able to completely rebuild our business foundation while still funding over $100MM and producing record returns to our investors.”
With the revamp of the company infrastructure and data security, Velocity Group USA will be launching KapSource within the first quarter of 2022, a “business in a box” model that will allow other members of the industry to use its proprietary technology to increase conversions, alongside a marketplace in which brokers can fund their owns deals and create additional revenue streams through Velocity’s capital sources.
How a Former Banker is Servicing Clients that Turned Down Alternative Funding Offers
December 15, 2021
What do brokers do with the clients that don’t want to pay the costs of an alternative product, but are still too underqualified for traditional financing?
Juan Caban, CEO and Co-Founder of Financial Lynx, has leveraged his interpersonal relationships as a former banker with his passion for networking and his discovery of a niche type of client into a business that is now spread across 44 states. Lenders aren’t the only ones turning down deals, the applicants do too, he says.
Caban built a referral business by talking to people, being an active member of the industry, and taking advantage of pandemic-induced halts in business to research the best ways to serve a section of business owners that prior to Financial Lynx, were either using less attractive products or never taking on financing at all.
“I’m a big networker,” said Caban. “I always go out, I meet a lot of people, I always get referrals from a lot of different areas.” He spoke about how as a decade-long banker with major banks, he knew right off the bat in his career that traditional financing was excluding financially-sound merchants who weren’t meeting overzealous bank qualifications.
“I would meet people who want to do business with me and I would present it to my bank, but it was always a challenge,” Caban said. “You want to help out a client, but you’re limited to the credit appetite of the bank that you are working for. After getting frustrated and declining a lot of clients, I wanted to seek out how I can help these clients out.”
After leaving the traditional finance world in 2019, Caban began work at an alternative lender, where the doors to a variety of new options opened up for him.
Caban still felt limited in his abilities to get deals done because of the confines funders mandate through their qualifications, and left to start his own company within seven months. After seeing a market in financing for merchants who fall between the high risk and traditional financing qualification threshold, he began talking to people across the financial community about what products exist for these types of clients.
“I used my banker network, I probably know about 200 bankers here in New York, and I started asking them, ‘hey, do you have a program in your bank that can help this type of client?’” Seeing that merchants with good credit and no desire to pay a 40% cost of capital were being pushed aside throughout the industry, Caban decided to pursue a business out of servicing this type of merchant.
“What I found was that there are some banks out there that as long as [the merchant] has a 700 FICO score, has been in business at least two years, and are considered to be in a preferred industry, some banks are willing to lend in some cases 20% of annual sales, up to $250,000, with just an application and one year of tax returns.”
The lending services being provided through Financial Lynx based on these qualifications are bank lines of credit that revolve and renew annually.
Caban described the qualifications for this type of financing as a look into the business owner themselves, and not as much into the business. “[These banks] focus on you as an individual and if you have personal credit.”
The concept took off.
“I started working exclusively with one MCA broker shop, they were calling hundreds of businesses a day,” said Caban. “They were trying to sell [merchants] cash advances obviously because it is a very lucrative commission business, but anything that was non-cash advance, or didn’t fit the cash advance space, or merchants who wouldn’t accept the expensive cash advances, they would refer that client to me.”
The twist is that the banks don’t pay him a commission so he has to charge a fee to the merchant once the financing is completed.
“At the end of the day I feel good because I am providing the client with something that they couldn’t find on their own,” Caban said. “So I am helping the client, and almost 100% of my clients are satisfied with what they have, because they’re getting cheap financing, 5% instead of 30% money, so even with my 10% consulting fee to connect the client, it’s still 50% cheaper than what they would’ve gotten in any type of cash advance.”
The biggest hesitancy Caban sees from alternative finance companies in terms of working with his niche product and client is the patience required in dealing with bigger banks. “Everything is quick in MCA, [brokers] get approved today, get funded today, and get paid tomorrow. I say look, I can provide the client what you’re looking for, but it is a three week process.”
“The ones that say, ‘hey we want to do what’s best for the client,’ they buy into it, they send us referrals on a constant basis,” Caban continued. “The ones that say ‘it’s taking too long, they’re not into it’ and I tell them ‘you’re going to lose that client eventually.’ As opposed to losing them, make some money out of it before you leave them.”
Trying to convince the legitimacy of his product seems to be part of the daily ritual for Caban. “Having a bank line of credit is considered a unicorn in the industry. Everyone says that they have it, but it’s not really a line of credit. We’re actually providing true lines of credit. It’s truly a revolving line of credit.”
“It’s always a thing where it’s like, are you for real?”
MCA-Centric Fintech Looks to Continue Expanding into US Market
December 14, 2021
“I had an ISO once ask me if our software was for real. He was like, ‘Can it really do all that?’”
SysArc, an Indian fintech company that has branched into the US market via Texas, attended Broker Fair last week in order to pitch their product to the industry’s head honchos. The company offers software specifically catered to each component of the MCA process. With software program names like FUNDperfect and ISOperfect, AltFinanceDaily was all ears.
“FUNDperfect, is a highly configurable solution with an exceptional capacity to adapt and is function-based on diverse organizational needs,” said Pria Chandrakumar, Vice President of Customer Engagement at SysArc, and winner of 2021 Fintech Woman of the Year in India. “We have a merchant portal where merchants can submit an application online, upload documents and even authorize bank verification so bank statements can be automatically pulled.”
When asked about the company’s thought process on creating an MCA-focused software, it appears as if SysArc came upon a niche after casting a net into the greater finance world. “[We’ve] always had a strong presence in the US servicing banks, credit unions, FHLBs, and MCAs,” said Chandrakumar. “We are experts in lending and cater to all forms of lending right from real estate, mortgages, personal loans, [and] small business loans.“
The biggest difficulty it seems for fintechs across the space, including SysArc, is trying to explain how tech can be useful to an industry that has been dominated by sales tactics and practices that go back generations. Chandrakumar spoke on some of reasons that make brokers and funders who operate in old-school sales mentalities hesitant to adopt fintech.
“Common misconceptions [among MCA] are affordability, complexity of software, loss of commission and mostly ignorance of what technology is capable of,” said Chandrakumar. “Brokers and funders must understand that the fintech industry has come a long way and has solved most of their operational problems.”
“The software also plays a huge role in reducing the risk since first level scoring and underwriting is done by the system, avoiding any human errors,” Chandrakumar continued.
FUNDperfect seems to be flexible in nature, so much so that it is broken down into smaller modules if needed, allowing ISOs and funders to pick the modules they need.
“ISOs can get just the brokering piece of the software called ISOperfect,” said Chandrakumar. “This takes the application through the point of selecting an offer and passing it on to the funder.”
After talking about plans of further expansion into the American market, Chandrakumar reiterated SysArc’s value in their gameplan of how to sell it here in the states. “We will use technology to make MCA financing quicker, while at the same time reducing the risks associated with funding by sharing data on merchant, ISO, and funder performances; so companies can make informed business decisions.”
The Industry is Back; Broker Fair Takes NYC
December 7, 2021
Broker Fair 2021’s showcasing in lower Manhattan on Monday brought together an unprecedented amount of attendees, that not too long ago saw their entire livelihoods and industry threatened by a pandemic-hampered economy.
“We are so happy to be here,” said Sonia Alvelo, CEO of Latin Financial and speaker on the ‘Great Debate’ panel. “With everything that has happened in the past two years, we are just super excited to be a part of this.”
Speakers at the event included keynote Slava Rubin, founder of Indiegogo, Oz Konar of Business Lending Blueprint, and Leo Kanell of 7 Figures Funding.
“We’re here to rekindle,” said Adam Abraham, Partner at Blueline Capital Group. “It’s always good to meet face to face. We’ve all been speaking on the phone for years at this point, so if you put a face to the name, it changes everything.”
That alone, is the best part about this event,” said Abraham. “Here, it’s about who you’re networking with.”
Other attendees felt that alongside the networking opportunities, events like Broker Fair allow the industry to truly leverage its core strength — its relatively small size compared to other areas of the financial world.
“Despite what many people think, this industry isn’t really as big as other finance industries,” said Josh Feinberg, CEO of Everlasting Capital. “When we come together like this, it really drives inspiration, thoughts, and dreams to be able to make this industry what it is today. I think these events really bring everyone together to drive the industry to the next level.”
A total of five panels took the stage throughout the day, and included individuals from across the business financing landscape. Other highlights of the event included a Small Business Finance Professional certification course, an expo room with over fifty companies and tables, and a hip-hop performance with viral artist Kosha Dillz.
At the event, AltFinanceDaily Connect Miami was announced, which will take place on March 24. For the first time, AltFinanceDaily will shift away from Miami Beach and into Downtown Miami, an area in which many members of the finance, crypto, lending, and banking industries have resettled and developed new flagship offices.
“I’m super pumped about the announcement of the show,” said Feinberg. “We’ll see everyone in Miami.”
