Lightspeed Accelerates Growth of its MCA Business
February 9, 2025Lightspeed Capital accelerated the growth of its principal issued for its merchant cash advance program, the company shared in its latest quarterly earnings report. Normally the company has more to say about this division but its attention was focused on an “executing a full transformation plan.”
As part of its previously-announced strategic review, the Company conducted an in-depth evaluation of its portfolio, including market attractiveness, competitive dynamics, and its right-to-win as well as evaluating the best ownership structure to navigate Lightspeed through a transformation. The Company has already set its transformation plan in motion, focusing on growth in retail in North America and hospitality in Europe, both leading growth engines, with a strategic focus on expanding locations and increasing software and payments ARPU, with the other business areas optimized for efficiency and aimed at driving a maximum profitability for the whole business.
The Company-wide transformation to deliver on the new strategy will focus on:
- Go-to-market: enhancing Lightspeed’s go-to-market strategy with targeted outbound efforts, field sales and local marketing expansion, and verticalized execution to maximize efficiency and improve win rates, including deepening supplier integration in focus verticals and deploying AI-driven customer acquisition across retail in North America;
- Product & Technology: investments focused on key growth areas—enhancing inventory management, forecasting, and supplier integration for retail in North America, while optimizing operations, guest experience, and analytics for hospitality in Europe;
- Capital Allocation: transformation initiatives to free up capital for investment in growth areas; and
- Share Repurchase: a share repurchase program to return up to $400 million in cash to shareholders, including the immediate execution of approximately $100 million3 under our current authorization, plus an additional $300 million, in each case subject to market conditions.
PayPal: Our merchants grow after taking a business loan from us
February 5, 2025
PayPal is feeling optimistic about its business loan program now that it has been reset on a path toward growth. “As the business matures, PayPal Business Loan offers more traditional merchant financing to match the increasing complexity and multichannel nature of larger businesses,” said CEO Alex Chriss during the Q4 earnings call. “Our business financing solutions increase loyalty and engagement, driving the PayPal flywheel. Merchants typically increase their PayPal volume by 36% after adopting PayPal Working Capital and 16% after taking a PayPal Business Loan. Our merchant lending originations were $3 billion in ’24, demonstrating our leadership and that there’s plenty of room to grow to support our customers.”
PayPal offers this product in the US, Germany, France, the Netherlands, UK, and Australia.
“The PayPal Working Capital product allows businesses to access a loan or cash advance for a fixed fee, based on their annual payment volume processed by PayPal,” the company states. “The PayPal Business Loan product provides businesses with access to short-term financing for a fixed fee or interest based on an evaluation of the applying business as well as the business owner. In the U.S., these products are provided under a program agreement with an independent chartered financial institution.”
Between them, PayPal is one of the largest online business lenders in the US.
NMEF Sets Unprecedented Milestones, Breaking All-Time Monthly, Quarterly, and Annual Origination Records
January 6, 2025JANUARY 6, 2025, NORWALK, CT – North Mill Equipment Finance LLC (“NMEF”), a leading independent commercial equipment lender and lessor headquartered in Norwalk, Connecticut, announced unprecedented performance milestones in originations for December, the fourth quarter, and the full year. Originations soared to an all-time high of $105.9 MM in the month of December, reflecting a remarkable 132% increase over December of last year. The fourth quarter closed with an extraordinary $252 MM in originations, while the full year reached a record-setting $654 MM, representing 21% growth compared to prior benchmarks.
David Lee, Chairman and CEO of NMEF, commented on the company’s historic success: “The fourth quarter was transformational for NMEF, with originations surpassing our previous quarterly record by an impressive 68%. This growth was driven in large part by the rapid expansion of our mid-ticket business, showing 178% growth year over year. Our evolution from a small-ticket subprime lender to a small and mid-ticket lender focused on near-prime opportunities reflects the success of our strategy and commitment to meeting the diverse needs of our partners. Furthermore, NMEF’s corporate-only product increased 11 points as a percentage of originations, underscoring our focus on mid-ticket portfolio enhancement.”
Mark Bonanno, President and Chief Revenue Officer of NMEF, attributed this exceptional performance to the company’s innovative culture and its robust network of partnerships. “This milestone is a testament to the incredible relationships we’ve built and nurtured over the years. Our ability to think creatively and work collaboratively with both new and long-standing partners has been instrumental in driving these results. We’re deeply grateful to our partner and referral network for their trust and collaboration, which enables us to continually push the boundaries of what’s possible in equipment finance.”
“We’re excited by the progress we’ve made this year. Through initiatives like integrating Taycor, expanding our credit appetite to include larger ticket sizes, and developing a true FMV program, our efforts to develop North Mill into a scalable platform for growth are beginning to show results. These advancements position us to support larger, more sophisticated transactions and deliver sustained growth in 2025 and beyond.” said Tom Lyle, COO of NMEF.
About North Mill Equipment Finance
NMEF originates and services small to mid-ticket equipment leases and loans, ranging from $15,000 and up to $5,000,000 for investment grade opportunities, and accepts A – C credit qualities and finances transactions for many asset categories including construction, transportation, vocational, medical, manufacturing, technology, franchise, renovation, janitorial and material handling equipment. NMEF is majority owned by an affiliate of InterVest Capital Partners. The company’s headquarters are in Norwalk, CT, with regional offices in Irvine, CA, Murray, UT and Voorhees NJ. For more information, visit www.nmef.com. Taycor Financial operates as an independent division of NMEF, with a focus on developing direct and vendor origination programs. For more information, visit www.taycor.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 from its main office in Las Vegas, NV. For more information, visit www.britecap.com.
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Top Stories of 2024 vs 2014
December 30, 2024A lot happened in 2024, but rather than just rehash it all out, let’s revisit the world of 10 years ago. In 2014, both OnDeck and LendingClub went public, Bitcoin landed in the mainstream, Square started funding, securitizations in the industry commenced, and the world was still not totally sold on the concept of MCA. Oh how things changed!
Smaller Funder? How to Get Fast Tracked With Big Investors
December 4, 2024Looking for big money? As a smaller funder your simple financial reports might not cut it when it comes to big investors. In fact, it’s a complaint frequently made by investment bankers and institutional funds looking to get capital deployed in the revenue-based financing space.
“Smaller originators face three key hurdles: first, the lack of institutional-grade portfolio performance and consistency; second, limited data operations and analytics capabilities; and third, a shortage of affordable resources and expertise to close these gaps and engage effectively with capital markets,” said Tomo Matsuo, Managing Partner of AdvanceIQ.ai., “AdvanceIQ.ai was launched to address these challenges head-on through tailored solutions like our new Portfolio Pulse product.”
The Portfolio Pulse is a simple yet robust tear-sheet product that delivers a high-level, third-party validated snapshot of portfolio performance. Designed as a cost-effective tool, it helps funders build credibility and engage institutional investors with confidence. Seamlessly integrating with most industry CRMs, it generates investor-ready metrics tailored for early-stage conversations, enhancing transparency and trust.
But Portfolio Pulse is just one piece of AdvanceIQ.ai’s broader suite of tools. From risk scoring and intelligent lead routing to dynamic portfolio analytics, AdvanceIQ.ai equips funders with the insights and resources to scale efficiently while building investor confidence. These offerings include tools like the SMB Risk Index (SRI), a proprietary scoring system designed for the SMB AltLending sector to predict and enhance asset performance.
Excerpts from Portfolio Pulse:
• Trailing twelve-month (TTM) origination metrics and performance trends.
• Distribution and performance insights segmented by key attributes, including the proprietary SMB Risk Index (SRI).
• Historical repayment trends via collection curve analysis.
“High-quality reporting is an essential first step for smaller funders to break into institutional markets,” Matsuo noted. “Our goal is to provide the transparency and insights that empower them to succeed.”
With deep experience in the SMB AltLending space, Matsuo is no stranger to the challenges funders face. “Having been involved in raising and managing hundreds of millions of dollars in both debt and equity, I’ve seen how difficult it can be for smaller originators to stand out. AdvanceIQ.ai’s offerings are designed to remove those barriers and position them for growth.”
Rewarding Loyalty in Revenue Based Finance
November 13, 2024
Everyone’s heard the pitch that if a deal goes well there could be better terms on the next one, but how much better are we talking about precisely? Well, after conducting an internal study, Pennsylvania-based Funding Metrics decided to actually codify incentives for success into a fully fledged loyalty rewards program that enables merchants to get a precise factor rate reduction, origination fee discount, and additional estimated remittances on subsequent advances.
“Early 2023 we took a deep dive into our customer experience and how it directly correlated to merchant retention,” said Melissa Flagg, Vice President of Operations for Funding Metrics. “We listened to the pain points our ISOs shared, with customer retention always driving the conversation. Most ISOs we spoke with seemed to face similar retention challenges and were coming up short with solutions.”
The challenge is that merchants tend to shop around on subsequent deals even if they are happy with what they got the first time. The loyalty program was the eventual outcome of what they learned and it’s open to merchants funded by Lendini and Quick Fix Capital. As Flagg tells it, there are three ways for merchants to accrue points. First, points simply for opting in, which they must do in order to take advantage of it. Second, additional points for each 1% they remit toward the purchased amount, and third, points for each renewal. There are six total milestones that range from Bronze Level to Diamond+ Level. While the tiers, conditions, and corresponding discounts are published right on their website, merchants can easily track their points through the Funding Metrics mobile app.
“There’s no need for a redemption email or request,” said Flagg. “Points don’t deduct, they continually accrue as long as merchants continue to remit, and discounts automatically associated with the loyalty level apply on their next offer.”
She added that it’s quickly been recognized as a great way to incentivize a merchant not to shop around. It’s also been used to secure a renewal or win back an old customer that had left. This logically helps the ISOs involved.
Most readers are already familiar with the Lendini brand through their constant mix of on- and offline marketing. Members of their team usually show up in large numbers at major industry events, for example. Flagg said that 2024 has been a big year for the company. “In Q2, we successfully launched Instant Offers, and we’re proud to report that we’re now averaging a turnaround time of under 5 minutes for offers up to $75,000,” she said. Their new mobile app, while still in beta, allows merchants to track offers, remittances, and engage with the Resolutions Team.
“Over the past two years, we’ve prioritized elevating the customer experience by creating accessible tools that empower merchants to navigate the financing process with ease and transparency,” Flagg said. “This is only the beginning. Funding Metrics is dedicated to continuously enhancing these experiences that put merchants in greater control of their business financing and making every step from offer to origination as seamless as possible.”
OppFi Encouraged By Early Results With Bitty
November 10, 2024OppFi achieved a new record in Q3.
“The record quarterly net income was a result of credit initiatives that continue to drive strong loss payment and recovery performance, marketing cost efficiency and prudent expense discipline across the organization,” said OppFi CEO Todd Schwartz during the quarterly earnings call. One part of that organization is Bitty Advance, which it acquired a 35% stake in this past summer. “We are encouraged by the early results and potential opportunity of this platform and the strength of our relationship with Bitty,” Schwartz said of the progress so far. “We continue to explore similar opportunities that would be accretive and align with OppFi’s strategic vision.”
One analyst on the call inquired further about what similar opportunities Schwartz might be referring to on the M&A front. Schwartz responded with the following:
I mean I think whatever it is, it’s got to be something that’s highly accretive. I mean, OppFi’s vision is to be a platform for digital alternative financial service products where we see large supply-demand imbalances in large addressable markets. There’s definitely different profiles of business out there, different situations are pretty — it’s pretty bespoke, but we’re prepared to handle either-or. So it has to make sense for us, though. And obviously, we’re going to protect and mitigate risk with anything we do to make sure that it’s successful and make sure that we’re going to be getting a return on our capital and it’s highly accretive to shareholders.
eBay: ‘We’ve Already Done $40M in MCAs’
November 3, 2024
eBay is coming in hot to the small business financing game. The company reported that it had connected merchants with $100M in funding YTD, over $40M of it being “business cash advances” through Liberis alone.
Liberis is a UK-based company that expanded into North America 4 years ago. It secured $112M in debt funding last year. The partnership between Liberis and eBay only started this past July. eBay’s other big funding partner is Funding Circle.
eBay’s role as a facilitator for funding follows what every other major e-commerce platform is doing. For example, Amazon, Shopify, Walmart, Lightspeed, and DoorDash all offer funding to sellers on their platforms. Technically, eBay was the first considering it had originally partnered up with Kabbage back in 2010. That relationship did not last, however.
