Payoneer Funds $80M in MCAs in Q1
June 17, 2024
Payoneer, the digital payments provider that also offers working capital on e-commerce platforms like Walmart Marketplace, originated $80M in merchant cash advances in Q1, according to the company’s recent quarterly earnings report. While the company did not draw attention to this stat, it appears in its Statement of Cash Flows. Payoneer originated $299M in funding to merchants throughout all of 2023, which would put the company below Funding Circle in terms of annual funding volume.
When it comes to Walmart, Payoneer offers up to 140% of a marketplace merchant’s average monthly Walmart volume and factor rates that range from 1.015 to 1.10.
“Payoneer will collect a pre-determined portion of each Walmart payout you receive via ACH bank debit from your bank account,” the website states. “Debits typically take place within 1 business day of each payment received from Walmart.”
The program is not new. The two first announced this relationship in December 2021. At the time, a senior director at Walmart said “Affordable working capital is more important than ever to help our sellers grow their business.”
SellersFi Surpasses $1B in Loans Since Inception, Experiences Success Through E-Commerce Funding
June 14, 2024The timing of it all was fortuitous for SellersFi. When the company announced in January that it had secured a partnership with Amazon to provide eligible Amazon sellers with access to credit lines, it was clear that its fresh equity raise and credit facility of up to $300 million were going to be put to use. SellersFi wasn’t the only partner, however, and Amazon still did most of the lending to its own sellers directly, a business it had been in for more than a decade, but it was still a big relationship to have. But then it got better. In March, Amazon announced that it would end its direct lending program and rely entirely on its partners instead. For SellersFi that meant it would have the opportunity to service even more sellers on the platform than before. Since then, SellersFi has quietly surpassed $1 billion in loans since inception.
“What we are seeing now is less competition,” said Ricardo Pero, CEO of SellersFi, in a call with AltFinanceDaily. He partially attributed that to the current interest rate environment which has impacted those with small margins. SellersFi, however, has experienced a lot of success. The company knows the e-commerce space particularly well, the only space it operates in, since its the only US lending platform also approved as a payment service provider member for Amazon. They started their relationship with Amazon as a service provider 3 years ago. While Pero said they have seen “nothing that points to a recession,” their experience suggests that even if one were to happen in the future, consumers would react by seeking out bargains on e-commerce platforms, reinforcing their position as the niche to be in. As readers may recall, a flight to e-commerce is also what happened during the pandemic.
E-commerce, however, is a broad umbrella, and Amazon is not alone in the universe. Millions of businesses rely on various platforms for e-commerce from basic templates with API connections to Shopify and more. Even big box brick and mortar retailers are waking up and rapidly inching their way into e-commerce. Walmart is just one example, which not only accommodates individual sellers on its platform but also offers merchant cash advances to them.
“The competitive landscape is changing for our clients,” Pero said. Pero added that they know what’s going on because they talk to these clients all the time and that even in the e-commerce business there are person-to-person relationships. “Customers mention their account managers by name,” Pero said. “We have a reputation as a partner to these merchants.”
One trend they’ve noticed over the last year or so is their strategy towards borrowing. While merchants have always typically used funds for things like advertising or inventory, the previous low rate environment enabled behavior where merchants could borrow first and then figure out how to spend the funds second whereas now that rates are higher there is a lot more of a deliberative approach to precisely how much they should get and what it will be used for in advance. It’s something they see all the time now and agree with. “You need to plan,” Pero said.
Lightspeed: ‘We plan to grow our MCA business cautiously’
June 6, 2024
Global e-commerce platform Lightspeed continues to see a lot of potential in the merchant cash advance space. It more than doubled the cash expended to originate MCAs quarter-on-quarter to $18.5M up from $8.3M.
“I’ll start by saying that when we look at our peers that are doing capital and have been doing capital for a long time as a part of their business, they’re giving out about 1% of their GTV (Gross Transaction Value) in merchant cash advance,” said Lightspeed CFO Asha Bakshani in the Q4 2024 FY earnings call. “If we were to do 1% of our GTV, that’s almost $1 billion in merchant cash advance. So, definitely a ton of growth potential for this business.”
Bakshani continued by saying:
What we plan on doing is growing this business very cautiously given the macro. As we’ve said before, we are in the perfect position to underwrite our customers for capital, determine the creditworthiness of our customers and how much they should be underwritten for, and we’ve had great success with the business so far, but again, growing it in a very steady and cautious manner. We don’t expect that we would use our balance sheet for several hundred million of merchant cash advances underwritten.
We’re already in talks with partners. There are lots of interested parties because they recognize that Lightspeed is in a great spot to underwrite customers. So, we’re already in talks with partners today. We have at any given point in time, $50 million to $60 million outstanding from this merchant cash advance business, and that may go up to $100 million, but we’re not planning to leverage our balance sheet for much more than that.
Cloudsquare Unveils Game-Changing Lender APIs for Streamlined Submissions
June 6, 2024New out-of-the-box integrations promises to revolutionize the deal submission process, boosting efficiency and cutting costs for alternative lending companies.
Los Angeles, CA – June 6, 2024 – Cloudsquare, a leading LOS/LMS platform and Salesforce consulting partner specializing in alternative lending solutions, announces the launch of 14 new Lender APIs integrated into Cloudsquare Broker, an alternative lending CRM powered by Salesforce. This significant advancement enhances the speed and efficiency submitting deals to lenders who accept portal submissions
The Lender APIs address common challenges in submissions, reducing delays and costs with a streamlined, automated solution. They integrate with the CRM’s Submission Channel, an AI-powered module that matches the right lenders for each deal, increasing approval rates by avoiding unnecessary declines.
Depending on the lender’s API capabilities, brokers gain access to features like real-time status updates, document retrieval, instant offers and decline reasons, further enhancing processing efficiency.
“With our new Lender APIs, users can experience a tenfold increase in submission speed,” said Jeffrey Morgenstein, CEO at Cloudsquare. “This not only saves our clients tens of thousands of dollars in processing payroll but also ensures they stay ahead of their competitors by operating at peak efficiency.”
Supported lenders include Bitty Advance, CAN Capital, Credibly, Expansion Capital Group, Fora Financial, Forward Financing, Headway, Idea Financial, Kapitus, Lendini, Mulligan Funding, OnDeck, PIRS Capital, and Rapid Finance.
“For customers who work with lenders not currently on the list, Cloudsquare offers the flexibility to add any lender to the submission framework, provided they have an API available,” said Paul Albuquerque, Director of Product at Cloudsquare. “It is our mission to elevate the entire industry and drive synergy through technology.”
This development underscores Cloudsquare’s commitment to innovative solutions that meet the evolving needs of the financial services industry, helping businesses operate more efficiently.
To learn more about how Cloudsquare’s Lender APIs can transform your submission process, visit https://link.cloudsquare.io/RYuO.
About Cloudsquare
Cloudsquare, is a robust LOS/LMS platform and premier Salesforce consulting partner specializing in solutions tailored for alternative lending. We pride ourselves on being the provider of choice for ambitious, forward-thinking organizations aiming to elevate their operations to the next level. Cloudsquare’s excellence has been recognized by industry leaders, is listed on the Inc. 5000 as one of America’s fastest-growing companies and is consistently rated as a top service provider on platforms like Salesforce AppExchange, G2, Clutch and Manifest. For more information, please visit https://link.cloudsquare.io/RYuO.
Staying Vigilant in the Funding Business
April 15, 2024There’s a lot of funny business going on these days, so here are some things for you and your merchants to look out for:
The LOC Bait and Switch
A scammer offers the customer an impossibly good deal on a line of credit that is contingent on first entering into some other product. After the customer enters into the first transaction, the LOC offer and the scammer disappear. If your customer is susceptible to falling for something like this, make sure to advise them ahead of time accordingly.
The Mystery Funder
Despite a customer claiming to work exclusively with you as a broker, at some point a third party mysteriously enters the process and offers a separate deal to them to compete with you. Although there could be many reasons for this happening both legitimate or otherwise, including the customer not being completely forthright about exclusivity, you should communicate with your customer beforehand about who or who not to expect a communication from. Also, there are methods you can use to mitigate this by plugging up common attack vectors like an email address or phone # on a submitted application. Allow an attorney to guide you on how to do this most effectively and legally.
The Debt Advisor
Beware the debt advisor who claims they are there to help a merchant reduce the obligations of their loans or advances as many do not understand the contracts they claim to advise on. Because of this, they can potentially push a customer into a much worse situation than they otherwise might’ve been in. A merchant’s best bet is to communicate directly with the source of capital on their own. Oftentimes a contract spells out the proper protocol to follow depending on what the situation is.
Pac-man
They got hot full packs for sale including bank statements, social security #s, and other data ready to send your way! Before engaging in any such transaction, please consult with an attorney about the potential implications of doing something like this. Same goes for you if you were thinking about “selling your declines.”
The Ghost
Brokers often complain about customers falling for obvious scams over the phone, including the classic LOC scam, however, brokers can be just as susceptible to the same tactics. Before working with any lender or funder, you should conduct a full range of due diligence on them. This includes investigating their precise address, who the owner is, what their background is, what their ISO contract says, what their merchant contract says, etc. Too often brokers are drawn in by a commission they believe they stand to make and a smooth talking biz dev rep they talked to on the phone and skip over all the fundamentals. If the funder turns out to be a scammer, then you’ve potentially placed customers with that scammer and put yourself doubly at risk. A commission isn’t worth waiving due diligence. The stakes are too high for this industry.
Amazon’s On-Balance-Sheet Business Loan Program Steady
February 11, 2024
Amazon’s business loan program was relatively steady in Q4 if its seller lending receivables are any indication. Those receivables totaled $1.3B, which was in line with where it has been throughout 2023. Compared to Amazon’s overall business, which generated $170 billion in sales in Q4 alone, its in-house lending business is rarely if at all mentioned.
Part of this is because Amazon has forged ties with third parties to service large swaths of its sellers. These parties include Parafin, Lendistry, and more recently SellersFi.
“Amazon is committed to providing our sellers with flexible and convenient access to capital, regardless of their size,” said Tai Koottatep, director and general manager, Amazon WW B2B Payments & Lending as part of the SellersFi announcement last month. “Through this lending option with SellersFi, we’re able to strengthen that commitment and offer sellers even more opportunities to grow their business.”
“Working with the Amazon Lending team has been an exceptional experience for SellersFi,” said Leonardo Felisberto, Head of Global Business Development and Partnerships at SellersFi during that same announcement. “Their dedication to empowering sellers aligns perfectly with our mission, and together, we’ve unlocked more possibilities for e-commerce entrepreneurs. We’re hopeful this can be another step toward supporting the growth aspirations of online sellers in the US and beyond.”
Northteq’s January Product Release Delivers Enhanced Lending and Pricing Solutions
January 23, 2024MINNEAPOLIS, MINNESOTA (January 23, 2024) – Northteq, Inc., a leading provider of Salesforce loan origination solutions, is thrilled to announce a range of new features and enhancements in our January Product Release. This release focuses on making operations smoother, expanding financial product options, and improving vendor and partner collaboration. It is all about making things better and easier in the world of equipment finance. We are excited about continuing to evolve our Aurora LOS and Partner Portal and know these enhancements will open new possibilities for our clients. Here is a glimpse of what we are rolling out:
Expanded Product and Pricing Offerings
- Enhanced Asset-Based Pricing: We are transforming the way you price in Aurora. The updated asset-based pricing feature, powered by TValue, allows for individualized pricing of each asset with different rates, residuals, and more. Asset pricing can be rolled up on the application or into a blended rate as suits your business needs.
- Line of Credit Capabilities: Introduce new revenue streams with our Line of Credit product featuring the same automated credit decision-making in Aurora that you love. After approval, you can auto-approve an application against an approved borrower line of credit.
- Enhanced Residuals: Experience a breakthrough in pricing flexibility with advanced residual pricing tables that accommodate both currency amounts and percentages, automatically calculating the corresponding value on the equipment record. The dynamic residual pricing feature enhancement is seamlessly integrated into program residuals, improving reliability and efficiency of pricing and quotes.
- Flexible Payment Frequency Options: Updated to offer a multi-select field, catering to a wider range of client preferences and requirements.
Vendor and Partner Portal Advancements
- Vendor Enabled TValue Pricing: We’re supercharging our Aurora Partner Portal with TValue’s industry-leading calculations and data. This means more accurate quotes and risk-based pricing options, right at your vendor’s fingertips.
- Streamlined Partner Portal Quotes: Improved integration and handling of quotes from the Partner Portal to the LOS for better efficiency and accuracy.
- Single-Page Borrower Application: An updated, more intuitive application process designed to improve completion rates and user satisfaction.
But that’s not all. We’re also rolling out enhancements across our Salesforce partner apps and integrations including Ocrolus, Middesk, TValue, Paynet, Experian, Transunion, Equifax, and OFAC. Expect improvements in user experience, performance enhancements, and essential bug fixes.
Our January 2024 release is part of Northteq’s continuous commitment to refining and advancing our platforms. As we innovate and adapt, we look forward to more impactful enhancements in our upcoming releases this year, each one bringing fresh advancements to the industry. This update is a key part of our ongoing mission to align our technology with the ever-changing market needs and to continuously improve the equipment finance lending experience. Check out the full list of upgraded products and features here.
This is just the beginning of what we have planned for the year. Stay tuned for what’s next at Northteq – we’re just getting started on a year full of innovation!
About Northteq
Northteq, Inc. is a Minneapolis, Minnesota-based fintech company that has helped over 175 lenders provide their customers, vendors, and employees with intuitive, thoughtfully designed lending solutions. Aurora, Northteq’s flagship product, is an automated, Salesforce powered loan origination system and partner portal. They also offer turnkey Salesforce apps created through key partnerships with fintech industry leaders including Middesk, PayNet, FICO, Equifax, Experian, D&B, TimeValue, LexisNexis, Nintex, Ocrolus, Plaid, and many more.
Northteq is now primarily owned by Arthur Ventures, a respected Minneapolis-based early growth capital firm known for leading investments in B2B software companies. This partnership positions Northteq for continued growth and innovation. Since 2013, Arthur Ventures has partnered with over 50 companies across the United States and Canada. For more information, please visit northteq.com.
Broker Battle Finds a Champion
January 14, 2024At the Miami Beach Convention Center in Miami Beach, Florida, thousands of viewers packed a hall to witness the first ever Broker Battle™ at AltFinanceDaily CONNECT. After the rules of the competition were explained, six broker contestants waited eagerly for their turn to face four judges and with that a chance to win a grand prize of $5,000. Their goal? Choose from one of three pre-defined sales scenarios and show off their knowledge and abilities to the judges. Here’s what happened:
The Broker Battle was introduced
Broker Battle judge Daniel Dames (Bitty Advance) held up a Title belt
Irving Betesh (Advance Funds Network) had the distinction of going first. He came prepared!
The contestants continued one by one alphabetically by last name
The conversational role playing on the stage covered the gamut, ranging from explaining APRs and contract terminology to diagnosing customer needs or trying to earn a customer’s business. Below, judges Jared Weitz (United Capital Source) and Cheryl Tibbs (Equipment LeaseCo Inc) listen in to a contestant’s pitch.
Mike Brooks (Best Connect Capital) came in with his own style
Corey Digi (Lexington Capital Group) put up a strong showing
Stanley Mitchell (CLM Financial) goes to work
Danielle Rivelli (United Capital Source) showed off her experience
Anthony Truglia (CapFront) made it known the competition wasn’t over yet
The judges had to add up their scores for each contestant to find out which TWO would make it into the final championship battle
Second from the right is judge Leo Vargas (Triton Recovery Group).
Anthony Truglia and Danielle Rivelli are declared the two finalists after racking up the highest scores
The final sales scenario is revealed!
Both contestants have to compete on stage at the same time! Oh my!
The contestants are sent offstage so the judges can deliberate
And the winner is…
Anthony Truglia!
All photos from the Broker Battle here
All photos from the rest of AltFinanceDaily CONNECT MIAMI here
AltFinanceDaily would like to thank all of the amazing broker contestants for participating in something bold and brand new. Thank you to Anthony Truglia, Danielle Rivelli, Corey Digi, Irving Betesh, Stanley Mitchell, and Mike Brooks. Gratitude is also directed towards the judges for their efforts, Cheryl Tibbs, Daniel Dames, Jared Weitz, and Leo Vargas.
AltFinanceDaily hopes that this competition inspires all brokers to become better, to further master their knowledge of available products, legal compliance, style, and confidence. A video highlight reel of the competition is in post-production.
Interested in more from AltFinanceDaily? Contact us at info@debanked.com or call 212-220-9084.
