Libertas Surpasses $2B in Funding Since Inception
March 20, 2023Libertas Funding has surpassed $2 billion in originations since the company started over six years ago. Company CEO Randy Saluck shared the milestone on LinkedIn earlier today.
“It took us 5 years to achieve $1 billion in funding but only 18 months to cross the $2 billion mark,” Saluck wrote. “Once again, I am humbled to have contributed to and been a part of this extraordinary achievement. It took incredible communication, drive, and focus by our whole team to achieve this milestone in such a short period of time. Great companies start with a great team, and our people are the best. We owe a lot of gratitude to our customers and referral partners as well as many others who have helped make this possible. The momentum is building in our company as we march toward $3 billion—following our well-deserved happy hour celebration!”
“Aggressive” Funding
March 7, 2023
Sometimes it pays to be aggressive!
“I think [aggressive funding] is a good phrase, I think in particular in the ISO organization as you’re speaking to the merchant you have to present yourself that you’re going to take an aggressive position to help them,” said Steve Kietz, CEO at Reliant Funding, “to help them get the biggest MCA deal size that you can get them, the best pricing that you can get them, be aggressive in terms of speed to try to get money for that merchant.”
And once that deal is in a broker’s hands, they may turn around and expect their network of funding partnerships to make that happen. Some lenders and funders lean into this style of courtship and market themselves as being similarly aggressive with their approvals.
“The word aggressive, that’s like my favorite word in this industry, because I guess it’s supposed to turn brokers on,” said Amanda Kingsley, Director of Marketing and Development at Merchant Marketplace.
The level of aggressiveness may depend on the attractiveness of the deal itself. According to Joseph Vaknen, Head of Business Development at SuperFastCap, funders will get more aggressive with their offers when there’s a “hot deal” on the table and it will kick off something similar to an auction or a bidding war. That scenario could potentially lead to the best outcome for the merchant just as intended and the broker essentially proves their value.
One’s aggressiveness can also be used to describe an overall risk appetite in general. “If you are considered an aggressive funder in the sense that you are funding bad deals then more likely than not the rate is super high and the term is super short,” said Vaknen. In that case, it’s important that all involved understand what is meant by aggressive.
And on the contrary, plenty of funding providers distance themselves from any such connotations of aggressiveness and are happy to be branded the opposite, conservative in their ways. That too can provide its own attractiveness depending on the circumstances. Aggressiveness, as one is surely aware in the financial services industry, can carry a certain stigma attached to it anyway.
“I think it’s a word that does have a negative connotation, but – you know, the word that we’ll add is caveat emptor buyer beware — as long as the customer knows what he or she is doing, having an aggressive ISO can be a good thing for them,” said Kietz of Reliant.
Funding Circle US Originates $393M in 2022
March 2, 2023The American arm of Funding Circle originated $393M in business loans in 2022, according to the company’s latest public financial statements, nearly quadruple the previous year.
The majority of Funding Circle’s loans are currently projecting annualized returns in the vicinity of US inflation levels. A graph of their loans by cohort is below:
Funding Circle US has a fairly diversified base of capital, having worked with eight forward flow funders in 2022, one of which was a credit union.
The UK still remains the overall company’s primary market. It originated £723M in business loans in 2022, not including those part of government support scheme programs.
Mulligan Funding Closes $100 Million Securitization
February 6, 2023February 6, 2023 – SAN DIEGO – Mulligan Funding, one of the largest providers of SMB access to working capital in the country, today announced the closing of a $100 million asset-backed securitization (ABS). This new financing continues a history of impressive growth for the company, even during difficult market conditions. As Mulligan Funding’s first securitization, the senior bonds achieved an A rating from Kroll Bond Rating Agency (KBRA), the highest rating they will award a first-time issuer in this asset class. The facility has a 3-year revolving period and is expandable to $500 Million.
Mulligan Funding, known for its commitment to full transparency and its exceptional customer service, started in 2008 in the midst of the financial crisis, when traditional banks began to pull back from the small and medium-sized business lending market. The private, family-owned business, which has so far provided access to over $1bn in working capital to its customers, is honored to have achieved the noteworthy milestone of closing its first securitization.
David Leibowitz, chief executive officer at Mulligan Funding, shares, “This is a really significant step forward for us. It adds materially to the funding we require in order to continue on the path of responsible growth to which we remain committed. We’re particularly pleased that the ratings afforded to these notes by KBRA, constitute an affirmation of the disciplined approach to credit management which has always been at the core of our business strategy.”
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About Mulligan Funding
Headquartered in San Diego and named on the prestigious Best Places to Work SoCal 2022 List by Best Companies Group, Mulligan Funding serves as a leading provider of working capital ($5K – $2M) to the small and medium-sized businesses that fuel our country. Since 2008, we have prided ourselves on our collaborative, innovative, and customer-focused approach. Through our unique ability to combine technology, a human touch, and unwavering integrity, we help those we serve bring their dreams to life with our people-first culture.
Backd Enters the Fifth Year of Funding Dreams
January 9, 2023
AUSTIN, TX – (Jan. 2023) – Backd, a commercial alternative business lender, has kicked off its fifth year in business, with a continued commitment to helping business owners fund and develop their dreams through easy-to-access alternative financing.
Last year the company grew exponentially while being named a 2022 Top Workplace by The Austin American Statesman. This is in addition to adding a business line of credit funding option to complement the already popular working capital. With a focus on a quick and convenient turnaround time to help companies that struggle to obtain conventional financing, Backd is looking to grow its financial products that offer flexible financing this year to support small businesses and allow them to truly thrive in 2023.
As part of this commitment, in the closing months of 2022, Backd CEO Xan Myburgh joined the Forbes Finance Council, a collective invitation-only community created in partnership with Forbes and the expert community builders who founded the Young Entrepreneur Council (YEC).
“It’s truly an honor to join this esteemed community,” Xan said. “As entrepreneurs, we are driven to improve upon the status quo, and I intend to provide my own expertise in entrepreneurial financial knowledge while simultaneously learning from the best business leaders the world has to offer.”
About Backd
Backd is a FinTech company headquartered in Austin that provides alternative financing solutions like working capital and line of credit for growing businesses across the nation.
For more information, visit backd.com, email kieran@backd.com or call Kieran at (512) 621-5169.
Funding Companies Sue California Regulator Over Looming Disclosure Law
December 6, 2022
The alarm bells sounded over California’s commercial financing disclosure law were more than rhetorical bluster. This past Friday, a trade association representing dozens of small business finance companies filed a lawsuit against the Commissioner of the California Department of Financial Protection and Innovation (DFPI) on the basis that the regulations scheduled to go into effect on December 9th are unlawful.
The suit, filed by the Small Business Finance Association, makes two claims.
First, that the regulations violate the First Amendment on the premise that they compel the group’s members to make inaccurate disclosures to customers while at the same time prohibiting members from engaging in communications that could be used to clarify or correct the required false or misleading information to customers. This in part refers to the requirement that funders assign misleading and/or false APRs to purchase transactions while being forced to use language and terminology that contradicts the contracts themselves.
Second, that APR disclosures are defined and governed at the federal level by the Truth in Lending Act and that California’s custom formulas and disclosures would only serve to confuse customers. The SBFA argues that the regulations are “preempted” by TILA.
These controversies, which have been the subject of debate for years, are not new information, but enforcement of the law is finally slated to begin in just 3 days. The complaint argues that compliance with the law may expose its members to civil and criminal liability and thus they are left with no choice but to proceed accordingly. Given the circumstances, however, there does not appear to be hard feelings about the situation.
“The SBFA enjoys a great working relationship with the DFPI and share their commitment to providing meaningful disclosures to small business owners,” said SBFA Executive Director Steve Denis when asked what this lawsuit meant.
He continued:
“We recognize the challenges involved in implementing SB 1235 and appreciate the effort and transparency the DFPI provided during the regulatory process. This is a complex issue and our lawsuit reflects the comments we have made during the regulatory process. We believe there are significant issues with the regulation that not only makes it difficult for us to accurately comply, but are inconsistent, create liability, and will provide further confusion for our small business customers. Again, we appreciate the effort by the DFPI and look forward to continuing our work together as the matter is resolved.”
The actual complaint is available for download here.
The law is scheduled to go into effect on December 9th.
Co-founders of $2B Recurring Revenue Funding Platform Step Down
November 27, 2022
It’s not a loan, it’s a trade. That’s the mantra of Pipe, an alternative finance platform that allows businesses to trade their future recurring revenues in exchange for upfront capital today. It sounds similar to a merchant cash advance but the company has rejected such comparisons in the past. It instead branded itself as the “Nasdaq for revenue” and grew itself into getting a $2 billion valuation just last year.
Last week, however, all three co-founders announced they were stepping down from their roles. In an exclusive with Techcrunch, Pipe co-CEO Harry Hurst said that they realized they needed an executive team that could really take the company to the next level, explaining that “we’re 0-1 builders, not at-scale operators.”
The following day, a story in Forbes suggested that there was more to the announcement, drawing attention to the possibility that Pipe had facilitated deals with bitcoin mining companies and that a source had said that some of them had gone bad. A since deleted tweet by a VC had said that there had been a significant loss on at least one of them.
The timing of Hurst’s resignation, announced before a new CEO could even be hired, allowed rumors to swirl. On Sunday night, Hurst finally addressed them.
4/ We haven’t “loaned $80M to a bitcoin mining company” and “lost it all”. We do have some customers in the space, but none of them have gone to zero.
— Harry Hurst (@harryhurst) November 28, 2022
6/ On the $70M personal loan rumor (perhaps the most bizarre): I haven't taken a loan from Pipe or any other loan against my holdings in Pipe.
— Harry Hurst (@harryhurst) November 28, 2022
11/ Now that’s all been addressed – back to building.
— Harry Hurst (@harryhurst) November 28, 2022
A tweet by a VC that had originally fueled some of the unflattering rumors has since been deleted.
National Funding is Venturing into Automated Lending
November 3, 2022
National Funding did more than just survive the pandemic. Already in 2022 the company upsized its credit facility, invested in Finova Capital, closed on a $125M ABS, and now more recently is going full force into automated lending.
The new initiative that aims to build off of National Funding’s 20 years of experience will be led by Rob Rosenblatt, a seasoned fintech veteran that previously worked for American Express, Chase, Citi, Kabbage, and Behalf.
National Funding will still do business as it has previously but Rosenblatt said that his separate division, formally organized as Business Loan Center, LLC, will differ in that it will be fully digital to the point that borrowers won’t have to engage with a human being if they don’t want to when accessing capital. The self-serve automated experience that takes a customer from application to approval in a matter of minutes is admittedly not a new concept in that of itself, Rosenblatt concedes, but he believes National Funding is equipped to do it better than the rest.
“…what we hope to do that’s unique is, first of all, leverage all of the learnings that National Funding has because they’ve been in business for over 20 years,” Rosenblatt said. “Number two is create a superior technological experience which will help with speed and user experience because we’re brand new, so we won’t in any way be beholden to systems of the past. Third is really be aggressive in our use of alternative data.”
Rosenblatt also emphasized that they will create a “world class user experience” and he expressed his belief that there is more than ample room for a new player to enter this market.
“Dave Gilbert, the founder of National Funding, and Joe Gaudio, who’s the president and COO, they became in the course of our conversations very firmly convinced that there’s a huge opportunity to better serve large swaths of the small business universe that maybe today aren’t quite being served fully by the suite of products that are out there,” Rosenblatt said.
