Making it Work: CanaCap and the Case for Canada
July 5, 2019
What leads an alternative financer to establish their own business in Canada? For Evan Marmott and his partner Adam Benaroch, it was the level of opportunity that the country offered in comparison to United States, where the alternative funding industry had become bloated and saturated with funders and brokers alike by 2017, when the pair established CanaCap.
Holding over 30 years of experience in alternative finance between them, Marmott and Benaroch founded CanaCap with the intention of capitalizing off interested Canadian merchants that were much more receptive to the message of brokers and funders. Not being bombarded by constant emails and advertisements for quick loans, Marmott says, leads Canadian business owners to be more open-minded to discussing alternative funding with brokers, resulting in both a better understanding of the conditions of the financing as well as more time on the phone to make deals. And on top of this, the lack of a dominant player within the alternative funding world of Canada leads to a divided market share, allowing small and large firms alike to succeed.
Accompanying this advantage of time and space within the market is the quality of merchants found in Canada. Claiming that Canadian merchants generally perform better than American business owners when repaying debts, Marmott explains that funders operating north of the border can expect to have a “cleaner” portfolio.
And lastly, the level of product knowledge amongst potential customers appeared to be just right to Marmott and Benaroch. With the former noting how CanaCap is unique in its willingness to offer second positions to Canadian businesses, Marmott highlights how his company benefits from larger financers, such as OnDeck, who many of their customers would go to first, learn about the funding process, be denied funds, and then be picked up by CanaCap after further researching the industry.
With offices in both Montreal and New York, the latter of these being for CapCall, the American counterpart to CanaCap, Marmott is well-attuned to the differences between the two markets. And while he concedes that the downside of brokering in the Great White North is the 30% that is clipped from commissions due to currency exchange, he affirms that the savings from reduced marketing costs, providing better return on investment rates, offset this loss.
Altogether, the CEO makes a convincing case for why one should consider alternative financing in Canada. Taking the tack that the country provides a fresh slate of sorts to financers, where merchants have yet to be inundated with offers, promotions, and horror stories about the industry, Marmott and Benaroch have enjoyed success with their model of approving over 90% of their applicants and streamlining the application process as to increase turnaround times.
With plans to stay put for the foreseeable future, Marmott says that he’s “looking forward to funding small businesses” as his company continues to service the entire country and the alternative finance industry in Canada develops. A plan that doesn’t sound too bad, especially with signs pointing towards increased growth and further interest from merchants.
“You Can’t Stay Static”: Paul Teitelman and the Building of an SEO Firm
June 30, 2019
How does someone become an SEO expert? How does someone found a successful SEO consultancy firm? For Paul Teitelman, his road to SEO mastery and independence started by admitting he knew nothing about the industry.
Beginning in the late noughties, following his graduation in Marketing Management from Dalhousie University, Teitelman went to an Interactive Advertising Bureau job fair, pitched himself to his soon-to-be boss, and replied, “No! But I’m your man. I’ll learn it all,” when asked if he knew anything about SEO.
Thus began his tenure at Search Engine People, one of Canada’s first Search Engine Marketing companies. Here he entered as a Link Ninja and learned the trade by implementing SEO campaigns for both Fortune 100 and 500 companies as well as for local businesses. From this, he advanced to a managerial position, in which he led teams of SEO specialists who were responsible for ensuring clients would appear at the top of Google search pages. And then, in 2011, Teitelman left Search Engine People to make his own way, becoming the CEO and founder of his self-titled, Toronto-based SEO consultancy firm.
How did the move to independence pan out? Well, as of June 2019 he has hired his 25th employee, his team is kept busy servicing the needs of clients, and he experiments with pioneering SEO strategies and theories within his own blog network. Claiming that his firm offers “the best of both worlds” as a result of him having worked on both ends of the SEO spectrum, Teitelman explains that clients benefit from his offering of the transparency, promptness, and directness that are inherent with small firms; and that he reaps the reward of an agency price tag, a perk that comes with producing consistently successful SEO work.
When asked about how others could follow in his footsteps, he said, regardless of the industry, whether you’re an SEO expert or broker, that “you can’t stay static.” Emphasizing the necessity of having foresight when you leave your old job, Teitelman notes that entrepreneurs need to stay ahead of the curve of trends, be that an update to Google’s search result algorithm or a niche opening in the alternative finance market. As well as this, Teitelman highlighted the importance of being secure in that knowledge that when you leave to make it independently you will have a list of clients to take with you, who’ll keep you from leaving yourself high and dry.
And much like how the merchant cash advance scene in Canada has seen an increase in both interest and product knowledge amongst customers over recent years, as has SEO. Subject to myth-making and conjecture as a result of its technical lingo and specialized nature, SEO has long been the victim of misunderstanding according to Teitelman, who says those who are curious about the service “shouldn’t believe everything they read on the internet.”
Going on to say that “the more education customers get, the more exciting the industry becomes,” it’s clear that Teitelman is looking forward to the future of SEO. Time will tell if his offer back in 2008 will be matched by interested industries, curious about the possibilities that SEO promises and willing to “learn it all.”
Paul Teitelman is also speaking on a sales and marketing strategies panel at deBanked CONNECT Toronto on July 25th alongside Smarter Loans President Vlad Sherbatov and SharpShooter Funding Managing Partner Paul Pitcher.
“Do It Better Than How You Learned It”: How Paul Pitcher Came To Be In Canada
June 27, 2019
Few kids who dream of running their own international business actually grow up to live that fantasy. Even fewer end up working alongside their childhood heroes. Paul Pitcher is doing both, and he’s loving every minute of it.
Growing up in Annapolis, Maryland, the Managing Partner at First Down Funding and SharpShooter Funding studied at Severn School and immersed himself in sport. Under the eye of his father, Pitcher began playing basketball and baseball at the age of 4. Golf came later, and it followed him into his young adult life as he played at a collegiate level while enrolled at the University of Tampa, where he studied International Marketing and Finance. And upon graduation, Pitcher landed a job in Washington D.C., working in sales for the Washington Wizards and Capitals.
Sports accompanied him in each phase of his life, so it comes as no surprise that it is entwined with his current business ventures.
After leaving the Regional Sales Manager position he held with the Wizards and Capitals, Pitcher became a broker, eventually establishing First Down in 2012 – seeing it as a solution to a problem many business owners across the country face: acquiring capital. Offering funds via merchant cash advances, First Down provides financial aid to small and medium-sized businesses.
And after enjoying success in the United States, lightning struck on June 6th, 2015. Out of the blue, over 25 Canadian business owners applied for funding from First Down. Chalking it up to ads First Down had placed across social media, Pitcher decided to dive into the new, northern market, but only after consulting with the only Canadian he knew, WWE Hall of Famer Bret ‘Hitman’ Hart.
Having met the wrestler in 1993, Pitcher gambled on Hart remembering the 10-years-old kid in the Looney Toons t-shirt that he took a photo with two decades ago. And it paid off. Following discussions of what First Down did and how it met the needs of the Canadian market, Hart partnered with the company and now serves as commissioner to SharpShooter, the Canadian arm of First Down.
With the backing of a hero from his youth behind him, Pitcher expanded beyond the borders of the US, and with this came further support from sports stars. Recent years have seen CJ Mosley of the New York Jets, Jacoby Jones of the Baltimore Ravens, and the Shogun Welterweight Champion Micah Terill partnering with Pitcher.
Noting that the spirit and culture of sport has definitely bled into First Down and SharpShooter from both his own personal life as well as the lives of those athletes that are partnered to it, Pitcher affirms that healthy competition is integral to both sport and business.
Believing that it’s just as important to win as it is to develop the environment you are in, Pitcher is in the funding market for the long-run. And it is exactly this that attracts him to Canada. Comparing it to Baltimore in his home state, he sees the Great White North as a region that is less saturated with funding firms like you would find in New York or Chicago, in other words, he sees it as a place of opportunity, where there is room to grow.
Of course, with such opportunity there are growing pains, like the populace’s level of product knowledge as well as the building of trust between business owners and SharpShooter, but Pitcher welcomes it. Emphasizing his love for competition, he calls for more firms like his to enter the market, be they big or small, as according to him, it could only help build upon the culture of non-bank funding that has taken root in Canada.
“Whatever you do, do it better than how you learned it,” are among the final words Pitcher leaves me with, and with the other closing remarks hinting at further expansion beyond Canada, the Managing Partner seems to be living by this maxim. Be it the education he picked up in Tampa, the lessons learnt in sales, or even a chance encounter with a childhood hero, Pitcher appears to be aiming to continually build and expand upon what he has experienced.
Paul Pitcher is also speaking on a sales and marketing strategies panel at deBanked CONNECT Toronto on July 25th alongside Smarter Loans President Vlad Sherbatov and SEO Consultant Paul Teitelman.
Are The Bankers Taking Over Fintech?
June 27, 2019
For Rochelle Gorey, the chief executive and co-founder of SpringFour, a “social impact” fintech company, mingling with industry movers and shakers at this year’s LendIt Fintech Conference was just what the doctor ordered. “I went mainly for the networking opportunities,” Gorey told AltFinanceDaily.
SpringFour, which is headquartered in Chicago, works with banks and financial institutions in the 50 states to get distressed borrowers back on track with their debt payments. It does this by digitally linking debtors with governmental and nonprofit agencies that promote “financial wellness.
The indebted parties—more than a million of whom had referrals that were arranged by Gorey’s tech-savvy company last year—constitute not only household consumers but also commercial borrowers. “Small businesses face the same issues of cash flow as consumers, and their business and personal income are often combined,” she says. “If their financial situation is precarious, it’s super-hard to get credit, a line of credit, or a business loan.”
Although Gorey felt “overwhelmed” at first by the throng of 4,000 conference-goers at Moscone Center West in San Francisco—roughly the same number as attended last year, conference organizers assert— her trepidation was short-lived. It wasn’t too long before she was in circulation and having chance encounters and serendipitous interactions, she says, with “all the right people at the workshops and at the tables in the Expo Hall.”
Armed, moreover, with a “networking app” on her mobile phone, Gorey was able to arrange targeted meetings, scoring roughly a dozen, 15-minute tete-a-tetes during the two-day breakout sessions. These included audiences with community bankers, financial technology companies, and “small-dollar” lenders. “And it went both ways,” she says. “I had people reaching out to me”—just about everyone, it seemed, appeared receptive to “finding ways to boost their customers’ financial health.”
Gorey’s success at networking was precisely the experience that the event’s planners had envisioned, says Peter Renton, chairman and co-founder of the LendIt Fintech Conference. Organizers took pains to make schmoozing one of the key features of this year’s gathering. Not only did LendIt provide attendees with a bespoke networking app, but planners scheduled extra time for meet-ups. “We had around 10,000 meetings set up by the app,” Renton says, “about double the number of last year.”
AltFinanceDaily did not attend the LendIt USA conference on the West Coast this year. But the publication sought out more than a half-dozen attendees—including several financial technology executives, a leading venture capitalist, a regulatory law expert, and the conference’s top administrators—to gather their impressions. While informal and manifestly unscientific, their responses nonetheless yielded up several salient themes.
The popularity—and effectiveness—of networking was a key takeaway. Most seized the opportunity to rub elbows with influential industry players, learn about the hottest startups, compare notes, and catch up on the state of the industry. Most importantly, the event presented a golden opportunity to make the introductions and connections that could generate dealmaking.
“My goal this year was to strike more partnerships with lenders and fintech companies,” says Levi King, chief executive and co-founder at Utah-based Nav, an online, credit-data aggregator and financial matchmaker for small businesses. “We had great meetings with Fiserv, Amazon, Clover Network (a division of First Data), and MasterCard,” he reports, rattling off the names of prominent financial services companies and fintech platforms.
James Garvey, co-founder and chief executive at Self Lender, an Austin-based fintech that builds creditworthiness for “thin file” consumers who have little or no credit history, said his goal at the conference was both to serve on a panel and “meet as many people as I could.”
Self Lender is in its growth stage following a $10 million, series B round of financing in late 2018 from Altos Ventures and Silverton Partners. Garvey reports having meetings with Bank of America and venture capitalist FTV Capital “over coffee” as well as F-Prime Capital, another venture capitalist. “It’s just about building a relationship,” he said of making connections, “so that at some point, if I’m raising money or want to partner, I can make a deal.”
There was a concerted effort to recognize women, as evidenced by a packed “Women in Fintech” (WIF) luncheon that drew roughly 250 persons, 95% of whom were women. (“Many men are big supporters of women in fintech and we didn’t want to exclude them,” Renton says). The luncheon was preceded by a novel event—a 30-minute, ladies-only “speed-networking” session—which attracted 160 participants, reports Joy Schwartz, president of LendIt Fintech and manager of the women’s programs.
At the luncheon, SpringFour’s Gorey says, “it was empowering just to see lot of women who are senior leaders working in financial services, banks and fintechs.” The keynote speech by Valerie Kay, chief capital officer at Lending Club, was another highlight. “She (Kay) talked about taking risks and going to a fintech startup after 23 years at Morgan Stanley,” Gorey reports, adding: “It was inspiring.”
The women’s luncheon also marked the launch of LendIt’s Women In Fintech mentor program, and presentation of a “Fintech Woman of the Year” award. The recipient was Luvleen Sidhu, president, co-founder and chief strategy officer at BankMobile, a digital division of Customers Bank, based near Philadelphia, which employs 250 persons and boasts two million checking account customers.
I am honored to be the 2019 Fintech Women of the Year and thrilled that @BankMobile won Most Innovative Bank. It’s very exciting to be recognized by @LendIt Fintech with this prestigious award and I congratulate the finalists in all the categories. https://t.co/qjADuKEMrB pic.twitter.com/hFJVFw1fLS
— Luvleen Sidhu (@LuvleenSidhu) April 11, 2019
BankMobile, which also won LendIt’s “Most Innovative Bank” award, has an alliance with Upstart to do consumer lending and a partnership with telecommunications company T-Mobile. Known as T-Mobile Money, the latter service provides T-Mobile customers with access to checking accounts with no minimum balance, no monthly or overdraft fees, and access to 55,000 automated teller machines, also with no fees. (At its website, T-Mobile Money describes itself as a bank and uses the slogan: “Not another bank, a better one.”)
The impressive salute to women notwithstanding, their ranks remained fairly thin: just 733 attendees identified themselves as “female” on their registration forms, LendIt’s Schwartz says, a little more than 18% of total participants. Seventy-five of the 350 total speakers and panelists—or 21%—were female. (Schwartz also reports that another 157 registrants selected “prefer not to say” as their sexual orientation, while 22 checked the box describing themselves as “non-conforming.”)
In LendIt’s defense, AltFinanceDaily, who caters to a similar audience, regularly reviews its readership demographics using several tools. They have consistently indicated that women make up 18% – 23% of the total, in line with what LendIt experienced at its most recent event.
By all accounts, many panels were informative, jampacked and attendees were engaged. King, who moderated a panel on regulatory changes in small business lending, which dealt with such topics as California’s commercial “truth-in-lending” law and controversial “confessions of judgment” laws, says: “They didn’t have to lock the door but the room was pretty full and people seemed to be paying attention. I didn’t see people studying their cellphones.”
The Expo Hall was teeming with budding fintech entrepreneurs, financial services companies and multiple vendors hawking their wares. But as numerous fintechs were angling to forge lucrative symbiotic relationships with banks, some participants—even those who were hailing the conference for its networking and deal-making opportunities—lamented the heavy presence of the establishment.
The banks’ ubiquitousness especially vexed Matthew Burton, a partner at QED Investors, an Arlington, (Va.)-based, venture capital firm and a veteran fintech entrepreneur. Before signing on with QED last year, Burton had been the co-founder of Orchard Platform, an online technology and analytics vendor for fintech and financial services companies which was purchased by fintech lender Kabbage.
Not only did bankers seem to playing a more prominent role at the LendIt conference, Burton notes, but “big four” accounting firm Deloitte had signed on as a major sponsor. “The energy level seemed a bit lower than in past years,” Burton told AltFinanceDaily. “It’s not like people were depressed but it wasn’t bubbling with excitement. A couple of years ago we thought all these new fintechs would replace the banks,” he explains. “Now the discussion is over how to partner and collaborate with banks. It’s not as exciting as when everyone thought banks were dinosaurs.
“I couldn’t really tell if there were more bankers attending this year,” Burton adds, “but it sure felt like it.”
King, the Nav executive, told AltFinanceDaily: “It was a little bit subdued. I don’t know if it was nervousness about the economy or politics, but the subject of risk came up more often in side conversations with venture-backed businesses and banks and alternative fintech lenders. One large bank we deal with,” he adds, “told me it’s spending most of its time working on risk.”
Cornelius Hurley, a Boston University law professor and executive director of the Online Lending Policy Institute who participated in a standing-room-only session on state and federal fintech regulation, declares: “I’ve been to three of their conferences, including one in New York, and I would say that this one did not have as much pizzazz. It may be that the industry is maturing.”
For his part—when asked whether there was a palpable absence of passion this year—LendIt’s Renton told AltFinanceDaily: “I would say that it felt more businesslike. Fintech has had a lot of hype and we have had conferences that were ridiculously over-hyped in 2015 and 2016. And in 2017 (the mood) was much more somber. This one felt optimistic and businesslike.”
There were 750 bankers in attendance, almost one in five participants. “The number of bankers was not up significantly” over last year, Renton says, “but the seniority of the bankers was higher. We worked very hard to get senior bankers to attend this year.”
Renton was bullish on the closer ties developing between nonbank online lenders and banks. That was reflected as well in the several panels exploring ways to develop partnerships between the two sides. He noted that a session called “How Banks are Matching Fintechs on Speed of Funding and User Experience” drew a heavy crowd. “It brought more bankers than we’ve ever had before,” Renton says.
Moderated by Brock Blake, founder and chief executive at the fintech Lendio, the panel was composed of three bankers: Ben Oltman, the Philadelphia-area head of digital lending and partnerships at Citizens Bank; Gina Taylor Cotter, a senior vice-president at American Express (the highest-ranking woman at the company); and Thomas Ferro, a senior marketing manager at Bank of America. “The banks came to LendIt not just to learn but to decide whom they’re going to partner with,” Renton says. “Fintechs need banks and banks need fintechs. That is the narrative you hear on both sides.”
(Asked whether any banks sponsored this year’s conference, Renton replied: “They are not sponsoring yet in any number but we are working on that.”)
OnDeck, a top-tier fintech lender to small-businesses in the U.S., which has been making forays abroad to Australian and Canadian markets, is an enthusiastic champion of the fintech-bank union. So much so that it claimed LendIt’s “Most Promising Partnership” award for the cooperative relationship it struck with Pittsburgh-based PNC Bank, which uses OnDeck’s platform to make small business loans. (Among the partnerships that OnDeck-PNC beat out: Gorey’s SpringFour, which was named a finalist in the competition for its association with BMO Harris Bank.)
“We were the first fintech lender to strike a true platform relationship with a bank,” Jim Larkin, head of corporate communications at OnDeck says, noting that the PNC deal follows on the New York-based fintech’s similar, innovative arrangement with J.P. Morgan Chase. “Others may do referrals,” he explains. “What we do is actually provide the underlying platform to accelerate a bank’s online lending capabilities. We deliver the software and expertise to construct the right type of online lending engine.”
Meanwhile, there was avid interest about the stock performance of publicly traded fintechs—for example, Square and GreenSky—both of which had seen their share prices tumble and then recover.
Burton noted that, among venture-backed firms, the most excitement seemed to be coming from Latin America. “Everyone was very bullish on a Mexican company, Credijusto, an alternative small business lender that was written up the in the Wall Street Journal,” he says. “It’s not going public yet but it had a large debt-and-equity raise of $100 million from Goldman Sachs. And SoftBank Group announced a $5 billion Latin American tech fund.
“There was a lot of talk,” he adds, “about how money was flowing into Mexico and Brazil.”
Michele Romanow to Keynote AltFinanceDaily CONNECT Toronto
June 18, 2019Michele Romanow, a TV star on Dragon’s Den and Co-founder of Clearbanc, will be the keynote speaker at deBanked CONNECT Toronto on July 25th. She joins other industry executives speaking at the event from across the business finance industry in Canada.
Tech titan Michele Romanow is an engineer and a serial entrepreneur who started five companies before her 33rd birthday. A “Dragon” on CBC’s hit show Dragons’ Den, Michele is the co-founder of Clearbanc, which in 2018 gave entrepreneurs more than $100 million in funding; SnapSave, which was acquired by Groupon; and Buytopia.ca, ranked #3 on the Profit Hot 50 list of fastest growing companies. Named in WXN’s “100 Most Powerful in Canada” and listed as the only Canadian on Forbes’ “Millennial on a Mission” list, Michele brings her incredible entrepreneurial savvy to every stage.
Michele has driven new digital solutions to many of the world’s leading brands, including P&G, Netflix, Starbucks, and Cirque du Soleil, and she has advised Fortune 100s and governments on innovation, AI, blockchain, and the new economy. She was a finalist for the EY Entrepreneur of the Year Award; the RBC Canadian Women Entrepreneur Awards; and was a Cartier Women’s Initiative Award global finalist.
Awarded Angel Investor of the Year by the Canadian Innovation Awards, Michele is a prolific angel investor who has also co-founded the Canadian Entrepreneurship Initiative with Richard Branson to encourage more women entrepreneurs. Michele In the media, Michele’s work has been profiled in Forbes, The New York Times, Entrepreneur, The Globe and Mail, and Chatelaine.
During her Civil Engineering undergrad at Queen’s University, Michele founded The Tea Room, the first zero-consumer-waste coffee shop. She was also given the Queen’s Tricolour — the highest honour awarded by the university — and, after completing her Queen’s MBA, she founded Evandale Caviar, a vertically integrated commercial fishery.
Michele is currently a director for Vail Resorts, Freshii, League of Innovators, Queen’s Business School and Shad Valley, a transformational program that develops the entrepreneurial potential of exceptional Canadian youth.
Other great executives speaking at AltFinanceDaily CONNECT Toronto:
MCA Company Files 15 COJs Against a Medical Practice, Dispute Arises Over Alleged Forgery
May 29, 2019
A New Jersey physician was one day going about his usual business, and the next day found himself an unwitting judgment debtor for almost $2,000,000 based on more than a dozen forged Confessions of Judgment (COJs) of which he had no knowledge. That’s the scenario described in papers by the physician’s attorney suing New York-based Itria Ventures, LLC. Itria is a subsidiary of its more well known parent company Biz2Credit.
In the span of 19 months, Itria funded a medical practice 19 times (an average of once a month), putting the practice on the hook for millions of dollars in purchased receivables. In March 2017, Itria declared one of those agreements to be in default and filed a COJ in the Supreme Court of New York, successfully securing a judgment in the amount of $245,114. Despite this, Itria continued to enter into at least 3 more funding contracts with them after defaulting.
The relationship would sour as Itria attempted to enforce its New York judgment in New Jersey with vigor. According to Court papers filed in Bergen County, Itria sought to have a judgment debtor, a doctor, arrested after he allegedly did not respond to an information subpoena or attend a deposition. In September 2018, a judge denied Itria’s application for an arrest warrant as the parties were reportedly in discussions to resolve.
When those discussions failed, Itria claimed that 14 more of the 19 contracts were also in default as they went ahead and filed 14 new COJs against the medical practice parties in March 2019. All told, Itria’s judgments add up to around $1.9 million. And just as Itria had previously, they began the procedure to enforce them.
But there’s a twist. The COJs and the contracts might have forged signatures for one of the parties.
On April 18th, Itria Ventures was sued by the very same doctor they sought to have arrested.
“Those confessions of judgment appear to bear my signature and have been filed against me but are fraudulent and forgeries because I did not sign them and the signature on them is not mine,” the plaintiff argued. Itria is a co-defendant alongside several entities that make up the medical practice, two notaries, Itria’s attorneys, and the plaintiff’s own brother, who is also a doctor.
Plaintiff’s claims of forgeries are onerous given that notaries were present, but the evidence is compelling given that on several contracts a notary attested that he appeared before her to sign it when there is surprisingly no signature there at all.
“This is a fraud even the most sophisticated lawyers would have trouble spinning in their favor. This fraud is shocking to the conscience,” the plaintiff’s attorney argued.
In instances where plaintiff’s signature is present, plaintiff alleges that his brother forged his signature and that the notaries fraudulently went along with it. In addition to the alarming variations in his signature, the plaintiff’s attorney pointed out an instance where a signature appears to be not only forged but a photocopied forgery.
Accordingly, the plaintiff is seeking to have all the judgments as they pertain to him personally, vacated.
Itria wasn’t convinced the allegations held weight given that it was the first time forgery had been raised in 2 years of communications. Documents filed appear to show there have been discussions to resolve for some time. They separately pressed forward on May 13th to have a Court appoint a post-judgment receiver over the medical practice.
Itria has relayed to AltFinanceDaily that their enforcement efforts have been in compliance with all laws and court rules and that they’ve worked with these debtors in a cooperative fashion to attempt to provide them with the opportunity to resolve their financial difficulties. For example, Itria says they (a) provided these debtors with a reduced/modified payment plan, (b) provided them, for an extended period of time, with a de facto forbearance from enforcement to allow them to ‘catch their breaths,’ and to attempt to resolve their financial difficulties by seeking financing elsewhere or otherwise , and (c) at the debtor’s request, assisted them in attempting to obtain alternate financing for many of their business needs, not just to make Plaintiffs whole.
On May 29th, the judge ordered a preliminary injunction enjoining Itria from enforcing the 15 judgments against the plaintiff only and any other judgments “purportedly executed by plaintiff.” The catch is that the plaintiff must post a $1.3 million bond by June 7th. If it’s ultimately determined that the injunction was not warranted, the plaintiff will be responsible for all of Itria’s costs and damages related to the injunction. Itria is not enjoined, however, from enforcing the judgments against any of the plaintiff’s co-defendants.
The case is listed under Index Number 154067/2019 in The New York County Supreme Court.
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.
Does The Borrower Even Exist? Image Algorithms, Site Inspectors Spot The Fakers
May 24, 2019
Their product research lab was the real deal. That’s what a business seeking capital hoped to convince a lender of when they snapped a photo of a $450,000 microscope and sent it over to underwriting along with two dozen other photos of their warehouse.
Most of the pictures were genuine, but the microscope was not. Truepic, a virtual site inspection and photo verification company that the lender had relied on, algorithmically determined that the microscope was actually a photo of a photo, one that had been grabbed off the web.
If they had just emailed these photos directly to the lender, the loan would’ve been issued, but this image analyzing technology changed everything.
Truepic founder and COO Craig Stack said that they were able to identify the false ones because of software they have that can detect when a photo is being taken of a two-dimensional image. Truepic didn’t just obtain the photos, they were taken in real time using their mobile photo-taking app. In addition to detecting only two dimensions, Truepic also found the real photos online through a reverse-image search to show where the photos came from.
Photo verification isn’t brand new. Nationwide Management Services has been providing these very same services to their customers since 2015, according to its CEO John Marsh. Marsh started his company in 2005 and originally provided traditional on-site inspections with certified field agents taking pictures.
“You can’t tell the difference,” Marsh said of photos taken by a field agent, compared to those taken virtually by the owner of the store or office. In the virtual one, the merchant receives a text and clicks on a link that essentially turns the merchant’s phone into a live video feed for the lender.
Commonly, the lender wants to see, among other things, the company’s signage, credit card machine and merchant’s driver’s license. Using GPS technology, Nationwide Management Services can tell exactly where the merchant is, so they can’t be taking photos – in real time – of a different store.
Marsh still offers on-site inspection for clients, but mostly as discreet, unannounced visits to check up on a merchant that is having a hard time making payments. Sometimes a field agent will find that a direct competitor moved in across the street or the neighborhood is declining and there are a number of vacant stores, Marsh said.
Marsh’s virtual video verification product is instantaneous, allowing the lender to see the merchant’s space – and face – in real time, virtually eliminating misrepresentation of the merchant’s store. Stack said that Truepic also has a video verification product that they will be releasing in less than three weeks.
Marsh said that would-be merchant fraudsters get scared as soon as they hear about a real time virtual inspection.
“When we reach out to them for the virtual inspection, they go dark,” Marsh said.
Most of the deception Marsh has encountered is of merchants giving a P.O. Box address as the address of their “physical store.”
Gayle Juhl, President and CEO of Metro Inspections, said that one of her field agents found a merchant with a far more unusual distortion of its company address. The field agent went to the address of the merchant only to find a 1970s bright blue Volvo station wagon with a sign on it, parked in front of the address listed, which belonged to a completely different store.
The man seeking funding, who came out of the car-turned-store, was apparently confrontational, according to the field agent’s report.
Juhl said that she will coordinate a virtual inspection upon request, but that her company primarily does onsite inspections.
“You can’t replace a handshake and an eye-to-eye to see what’s really going on,” Juhl said.
This may be true, but Marsh said that it can take 24 to 48 hours to collect photos for his onsite inspections whereas it can take as little as four minutes with his virtual video or virtual photo services. (This depends on how many images the lender is looking to capture.) Granted, Juhl said that Metro Inspections’ on-site inspections can be collected and delivered on the same day it was requested, given that the request comes early enough in the day.
Stack, who has only been servicing the online lending industry for about five months, says that he has gotten financial services clients who are very excited about the speed of virtual inspections and the fact that they are far less invasive for the merchant. Rather than have a stranger come in to take pictures – raising questions among employees and customers – the business owner can discreetly photograph their space at their convenience. Stack’s company has never offered onsite inspections and says he never will.
“Our camera doesn’t lie,” he said.
