NMEF Offers to Purchase IOU Financial
July 25, 2023JULY 25, 2023, NORWALK, CT – North Mill Equipment Finance LLC (“NMEF”), a leading independent commercial equipment lender located in Norwalk, Connecticut, announced today that the following letter was sent yesterday to the Special Committee of the Board of Directors of IOU Financial Inc. (“IOU”). NMEF’s proposed acquisition is at a 27% premium to the price per share agreed to by IOU and a group of inside shareholders representing 46.1% of the issued and outstanding shares of IOU announced on July 14, 2023. “We are offering to all IOU shareholders a far superior price to the value of the Company presented by the inside shareholders that was accepted by the Special Committee in a sweetheart deal for those insiders,” said David C. Lee, Chairman and CEO of NMEF. “Our offer is not subject to any financing contingency nor access to confidential information.”
About NMEF
NMEF originates and services small to mid-ticket equipment leases and loans, ranging from $15,000 to $2,000,000 in value. A broker-centric private lender, the company accepts A – C credit qualities and finances transactions for many asset categories including construction, transportation, vocational, medical, manufacturing, printing, franchise, renovation, janitorial and material handling equipment. NMEF is majority owned by an affiliate of InterVest Capital Partners. The company’s headquarters is in Norwalk, CT, with regional offices in Irvine, CA, Dover, NH, Voorhees NJ, and Murray, UT. For more information, visit www.nmef.com. One of NMEF’s controlled affiliates, BriteCap Financial LLC, is a leading non- bank lender providing small businesses with fast, convenient financing alternatives such as working capital loans since 2003 from offices in North Hollywood, CA and Las Vegas, NV. For more information, visit www.britecap.com.
New York State Loan Initiative Takes on Fintech Type Pitch
July 24, 2023
If a business owner told you they had been approved for a 3-6 year loan up to $150,000 with no origination fees, no prepayment penalties, and interest rates ranging from 9.25 – 12.25%, would you believe it was a real offer?
The criteria, after all, is just a matter of:
– having been in business at least 1 year
– having strong previous cash flow and projected cash flow
Not only is this real but it’s being rolled out by New York’s “Forward Loan Fund 2” as a working capital loan that can be used for equipment, payroll, utilities, rent, supplies, marketing and advertising, building renovations, and other expenses. The state stops short of calling itself a fintech platform or online lending platform, instead referring to itself as a “virtual platorm” that is “accessible anywhere in the state.”
This is the second run of this program. The first distributed loans to 1,700 small businesses.
“It was a godsend,” one testimonial posted on the NY loan fund site says. “NDC made it so easy. It took two weeks and the money was in our account. Can you feel my joy?”
The program offers more than just capital, promising that there is a “network of Entrepreneurship Assistance Centers (EAC) available to provide free support before, during, and after the loan application process.”
The program is backed by participating lenders that include Accion Opportunity Fund, Ascendus, NDC, Pursuit, and TruFund Financial Services. There is about $150M available to be loaned out “with plans to recycle and lend additional funds over the life of the program.”
“Due to a limited amount of funding availability and the high volume of applications expected, it is anticipated that not all applicants will be able to receive a loan,” a disclaimer says.
At a minimum, the documents required to be considered are:
1. Most recently filed tax returns OR internal financial statements.
2. Schedule of ownership
3. Personal guarantee from each individual owner greater than 19%
4. Articles of organization
5. Credit report
A Glimpse At How Big Fintechs Are Approaching The Small Business Loan Market
March 1, 2023| Company Name | Status | Notes |
| Square Loans | Just recorded its biggest originations year ever. $4.07B funded in 2022 | |
| Enova/OnDeck | Seeing tremendous demand. Focusing on diversification. $2.97B funded in 2022 | |
| Shopify Capital | Reporting strong renewals. Just had its biggest originations year ever with $1.66B funded in 2022. | |
| Upstart | Suspended business loan originations only 6 months after it started them. | |
| LendingClub | Has suspended its equipment financing and commercial real estate lending divisions. | |
| SoFi | Not interested in joining the small business loan market at this time. |
Square Funds $1.14B in Q3
November 5, 2022
Square Loans, a subsidiary of Block, originated 126,000 loans for a total of $1.14B in Q3. The company has a positive outlook on the state of its lending business, saying that “Square Loans achieved strong revenue and gross profit growth during the third quarter of 2022.” Overall, originations grew by more than 10% over the previous quarter.
Square Loans is one of several lenders thriving during this period of economic uncertainty. Rivals Enova and Shopify Capital also recently reported strong business loan results.
North Mill Announces $353MM Term Securitization
October 17, 2022OCTOBER 14, 2022, NORWALK, CT – North Mill Equipment Finance LLC (“NMEF”) announced today the closing of its sixth commercial equipment backed securitization (ABS), NMEF Funding 2022-B (“NMEF 2022-B”). The $353MM transaction is North Mill’s 2nd ABS transaction this year, bringing the total privately placed bond proceeds raised this year to $724MM for the year. NMEF’s Capital Markets team has now raised $1.4B in bonds since inception. NMEF 2022-B featured fixed-rate asset backed securities across three classes of notes with the A note split into two tranches; an A-1 money market class, and a AAA/Aaa rated tranche by KBRA/Moody’s. This was NMEF’s first ABS issuance to be rated by Moody’s. It was also NMEF’s first transaction to include all investment grade tranches.
“The transaction was well-received by institutional investors with 31 unique investors, including 12 new investors in the NMEF shelf, making it NMEF’s largest ABS investor base of all time. We attribute this to the addition of a big-three rating agency with a 4% base case cumulative net loss assumption as well as a reduction of the base case loss assumption from KBRA from 6.1% – 6.6% on our last transaction down to 4.79% on NMEF 2022-B,” said North Mill’s President and Chief Operating Officer, Mark Bonanno.
Pier Snider, NMEF’s Chief Financial Officer added, “The transaction includes a $101MM 3-month post-close prefunding period that gives NMEF a fixed cost of funds for 4th quarter originations in a rising rate environment.”
About North Mill Equipment Finance
North Mill Equipment Finance originates and services small to mid-ticket equipment leases and loans, ranging from $15,000 to $1,000,000 in value. A broker-centric private lender, the company accepts A – C credit qualities and finances transactions for many asset categories including construction, transportation, vocational, medical, manufacturing, printing, franchise, renovation, janitorial and material handling equipment. North Mill is majority owned by an affiliate of InterVest Capital Partners, Inc. (FKA Wafra Capital Partners Inc.). The company’s headquarters is in Norwalk, CT, with regional offices in Irvine, CA, Dover, NH, Voorhees NJ, and Murray, UT. For more information, visit www.nmef.com.
North Mill Hits $1 Billion in Originations on Anniversary of Recapitalization
August 1, 2022AUGUST 1, 2022, NORWALK, CT – North Mill Equipment Finance LLC (“NMEF”), a leading independent commercial equipment lessor headquartered in Norwalk, Connecticut, announced today that the company crossed the $1 billion mark in total originations since its recapitalization by an affiliate of Wafra Capital Partners, Inc. (WCP).
Four years ago this month, North Mill was acquired by WCP, a New York based SEC-registered investment adviser that manages or advises funds and accounts that invest in specialty finance, rental and leasing platforms. “They’ve been an extraordinary partner, supporting our growth strategy every step of the way,” said David C. Lee, Chairman and CEO for North Mill. “The fact that we’ve reached one billion in volume in four short years, on our anniversary date, is a testament to their collaboration along with the passion, dedication and hard work espoused by the entire team at North Mill.”
Since the recapitalization, North Mill has undergone a major transformation, graduating from a niche-lender that focused on challenged credits in the transportation sector to a multi-faceted provider of financial solutions spanning the A to C credit markets. The company now finances assets ranging in diversity from construction and medical equipment to major franchises such as Dunkin Donuts, Subway and Burger King. Expanded operations have necessitated the opening of regional offices in multiple locations across the nation.
North Mill’s leadership team has reworked every facet of the organization by investing in the technology and funding and marketing infrastructure necessary to originate new business exclusively through the third-party channel. The company has consistently reported record-breaking headlines the last few years, most recently declaring an all-time high for the second quarter of 2022 as organic originations surged to $146.6M, up 34% from the first quarter. Just last month, North Mill made another major announcement as the company introduced a simpler pricing scheme, imparting a level of transparency and connectivity between the organization’s buy rates and credit parameters. The enhancement makes it much easier for referral partners to determine borrower eligibility and to identify the potential buy rate at which a deal will likely price.
About NMEF
NMEF originates and services small to mid-ticket equipment leases and loans, ranging from $15,000 to $1,000,000 in value. A broker-centric private lender, the company accepts A – C credit qualities and finances transactions for many asset categories including construction, transportation, vocational, medical, manufacturing, printing, franchise, renovation, janitorial and material handling equipment. NMEF is majority owned by an affiliate of WAFRA Capital Partners, Inc. (WCP). Headquartered in Norwalk, CT, NMEF has regional offices in Irvine, CA, Dover, NH, Voorhees NJ, and Murray, UT. For more information, visit www.nmef.com.
North Mill Enhances Rate Card Program
July 18, 2022
JULY 18, 2022, NORWALK, CT – North Mill Equipment Finance LLC (“NMEF”), a leading independent commercial equipment lessor headquartered in Norwalk, Connecticut, announced that the company has implemented major enhancements to its pricing scheme, simplifying its buy rate structure and connecting each price point directly to the credit parameters company analysts use to assess each transaction.
The upgrades provide a decisive benefit to the hundreds of referral agents with whom NMEF partners. Brokers can now identify the credit variables NMEF reviews when analyzing a deal. As such, they can determine readily whether a borrower’s credit background matches the parameters associated with a particular buy rate outlined on the new price cards. Moreover, the revised pricing is configured in a “waterfall” format. If a borrower does not meet all the credit requirements outlined in one price panel, the transaction will generally flow to the next price panel, and so on.
“The feedback we receive from our broker partners often provides the blueprint for change,” said Paul Cheslock, Vice President, Customer Relations, North Mill. “As a lender that remains totally committed to the third-party channel, we take the recommendations we receive from referral agents very seriously. In this case, imparting a level of transparency and connectivity between our pricing and credit review methodology was cited as an opportunity. They spoke, we listened.”
The new pricing scheme comprises two sets of rate classifications based on equipment type. One class includes buy rates for most of the equipment that NMEF will consider financing while the other class is designed solely for heavy duty Class 8 sleeper trucks, logging equipment, and printers. Additionally, the cards have rates for borrowers with better credit backgrounds and more time in business vs. those with more challenged credit histories and/or less business experience. For questions on North Mill’s rate card program, please contact Don Cosenza at (203) 354-1710 or dcosenza@nmef.com.
About North Mill Equipment Finance
North Mill Equipment Finance originates and services small to mid-ticket equipment leases and loans, ranging from $15,000 to $1,000,000 in value. A broker-centric private lender, the company accepts A – C credit qualities and finances transactions for many asset categories including construction, transportation, vocational, medical, manufacturing, printing, franchise, renovation, janitorial and material handling equipment. North Mill is majority owned by an affiliate of WAFRA Capital Partners, Inc. (WCP). The company’s headquarters is in Norwalk, CT, with regional offices in Irvine, CA, Dover, NH, Voorhees NJ, and Murray, UT. For more information, visit www.nmef.com.
Large Fintech Companies Helping to Normalize Revenue Based Financing
May 6, 2022
With business increasing for wide-reaching financial technology companies like Square, Paypal, and Shopify, this has brought more attention to revenue-based financing products like the ones they offer. Henry Abenaim, Founder and CEO of Fundingo, said that it brings more businesses to the table.
“…you sometimes think it’s a small world or small group of merchants, and you really come to realize that it’s huge,” he told AltFinanceDaily. “And the more they’re serviced, the more they need, the more they grow. So it just feels like there’s just more awareness of the product, and then more merchants that are going to come in demand and ask for it, as well as these bigger players are always going to service only a subset of the businesses.”
At the same time, a greater public awareness of options could tighten margins for certain funding providers. “I think it’s going to make the merchants that are way more bankable… get lower price deals, so it’s going to hurt the margins, it’s going to hurt the profits,” Abenaim commented.
John Bulnes, Vice President of Business Development at Fenix Capital Funding, expressed how it is not yet determined what kind of effect the larger mainstream companies will have on the industry. “I do think it’s something that the larger first position MCA companies may feel the effects of first, because they’re going to be competing more or so with taking away clients from those companies first, as opposed to the companies that are smaller that are doing shorter term deals.”
As these big companies operate with larger capital bases, it may indeed become more difficult for smaller companies to compete.
“… it’s going to be something that’s going to constantly adapt and fluctuate as time goes, but I do see it as an expanding industry… it’s kind of a sign that when you see more commercials and we see these bigger companies jumping into the space, that it is something that’s going to continue to grow,” said Bulnes.
And commercials and ads are definitely increasing. One of the largest online small business lenders in the country was asked about their TV and radio campaigns during their recent quarterly earnings call.
“We’ve definitely been ramping [commercials up] hopefully with a little bit more diligence than OnDeck was running ads three or four years ago,” said David Fisher, CEO of Enova. “But we’ve definitely jump back into kind of broader base advertising in that business and it’s been working really well.”
