IOU Partners with FINSYNC to Fuel Growth
November 27, 2018
Montreal-based IOU Financial announced yesterday that it is partnering with FINSYNC in an effort to improve their customers’ experience and broaden access to new customers. FINSYNC is a cash flow management software and platform that allows businesses to collect income, pay bills, process payroll, automate accounting, and access financing through FINSYNC’s Lending Network.
“FINSYNC’s innovative cash flow management solution helps business owners better assess the opportunity to access working capital based on past and projected cash flow,” said Christophe Choquart, VP of Strategic Partnerships at IOU Financial. “This is a totally new way to [support] growing businesses.”
FINSYNC provides almost all financing-related services except for the actual financing. According to its website, FINSYNC has partnerships with a number of other alternative funders, including OnDeck, Breakout Capital, BFS Capital and The Business Backer.
“This partnership greatly enhances the convenience of applying for working capital,” said Robert Gloer, President and COO of IOU Financial. “It gives merchants insight into what a cash infusion would look like [before they take out a loan.”
Through this partnership, IOU Financial’s marketing efforts will introduce potential merchants to FINSYNC’s payment, payroll and accounting services, while FINSYNC will offer IOU Financial an enhanced user experience, according to IOU Financial CEO Philip Marleau. He said that, for now, neither company is exchanging money with one another. It is purely a mutually beneficial partnership.
IOU Financial offers business loans of up to $300,000 to small business merchants in the U.S. and Canada. The company, which is traded publicly on the Toronto Stock Exchange, had a strong third quarter, with $36.1 million in originations, an 85% increase from the prior year. The lender’s average loan is $100,000 with a 12 month term, although they do offer terms up to 18 months.
Founded in 2009 by Gloer and CEO Phil Marleau, the company also has an office in Atlanta and has a total of about 40 employees.
Brief AltFinanceDaily San Diego Recap
October 6, 2018
More than 300 people attended the first AltFinanceDaily CONNECT event on the west coast at the Andaz Hotel in San Diego. The half-day learning and networking conference drew people in the small business finance space from across the country, including New York, Philadelphia, Detroit, Houston, Salt Lake City, and cities in Florida and all throughout California.
Sam Bobley, CEO of Ocrolus, which provides technology solutions mostly to direct funders, was among the first to check in before the official start time at 1:30 p.m. He came in from New York.
“We went to Broker Fair in Brooklyn and made a lot of connections,” Bobley said. “We go to the other events, LendIt and Lend360, which are great, but they’re fairly broad. There, 1-2 out 5 people might be relevant [to online lending.] Here, everyone is. There’s no wasting time.”
The learning component of the day focused on sales and dealing with new regulations, primarily coming out of California.
“We wanted to learn about [the status of CA regulations],” said Kyle Readdick, CEO of Synergy Direct Solution in San Diego, a lead generator and funder in San Diego. “It’s obviously a concern.” He attended with his brother and CFO, Travis Readdick.
On the sales sides, Jennie Villano of Kalamata Advisors, Matt Price of Reliant Funding and Ilya Fridman of BFS, gave advice during the “Tips for ISOs” seminar. Technology and CRMs was one area of particular focus among the panelists as a must-have to scale.
“I’m so happy to be here,” said Mike Brooks, ISO relations manager with Smart Business Funding who flew in from New York. “I’m here to meet people, make contacts and make some money.”
Photos will follow soon. You should also follow us on instagram.
$400M A Year: Fora Financial / US Business Funding Deal to Make Fora an Originations Leader
June 5, 2018
Fora Financial’s newly acquired stake (a significant one) in US Business Funding will put them on track to originate $400 million a year, the company said. Those numbers will place them on the list with industry titans like BFS Capital, Strategic Funding and National Funding.
The co-founders of Fora were previously featured on AltFinanceDaily’s Jan/Feb 2016 magazine issue.
US Business Funding (USBF), who is based in Santa Ana, CA facilitates different financing products for small businesses including vendor programs, capital equipment loans, and leasing solutions.
“This is an exciting time for all of us at US Business Funding,” said USBF CEO Peter Ribeiro in a published statement. “We have rapidly built one of the top sales organizations in the industry, and now we have the opportunity to leverage the expertise and resources of Fora Financial to fuel our growth even further. Jared and Dan have established Fora Financial as one of the top lenders in the space, and we are motivated to build on our terrific relationship with them to create even more opportunities for our companies to succeed.”
Broker Fair 2018 Story Continued
May 18, 2018A continuation of Broker Fair 2018 through photos:
We’ll publish the entire cache of them in the coming weeks.
JOIN US OCTOBER 4TH IN SAN DIEGO AT THE ANDAZ FOR A SPECIAL HALF-DAY INDUSTRY NETWORKING EVENT
Couldn’t find yourself in any of our photos? We’ll publish the full album in the following weeks.
Welcome to Broker Fair
May 13, 2018Update: Thanks to everyone who attended, participated, and sponsored!
Registration on Monday starts at 7am where you will be able to pick up your badge. The continental breakfast will be available at 8am and the opening remarks begin at 8:45am.
The lunch, sponsored by National Funding, begins at 12. There will be a kosher option available.
Later at the end of the day, the cocktail reception at Westlight, which is upstairs on the 22nd floor, will begin at 5:30pm. Westlight offers amazing outdoor views of the Manhattan skyline. That event is sponsored by RapidAdvance and all you need to enter is your Broker Fair badge.
The agenda will also be available on the backside of your badge.
Thank you also to our Gold Sponsors: National Business Capital, CFG Merchant Solutions, BFS Capital, and CanaCap
How A New Hampshire Teen Launched A Lending Company And Climbed Into The Inc. 500
March 17, 2018Josh Feinberg was not a complete newbie when he started in the lending business in 2009, but he also had a long way to go to find success. His dad had been in the business for 15 years and shortly after graduating high school, Josh started to work in equipment financing and leasing at Direct Capital in New Hampshire, his home state. He then had a brief stint working remotely for Balboa Capital, but he wasn’t sure that finance was for him.
He was 19, with a three year old daughter, and he took a low paying job working at a New Hampshire pawn shop owned by his brother and a guy named Will Murphy.
“I was making $267 a week at the pawn shop and I was having to ask friends to help me pay my rent for a room,” Feinberg said. “So at that point, I realized that something needed to change.”
One day, while working at the pawn shop, Feinberg saw a Facebook post from a restaurant owner in search of financing for equipment. With a background in financing, he said to himself: “I wonder if I could take an application and bring it to one of the sources I know and they could pay me a commission?’”
That question prompted Feinberg to present to his brother and Murphy the idea to start a finance company. Feinberg said he drew up a business plan in a day and a half and his brother and Murphy agreed to give him $3,000 to start the company. That was November of 2012.
“They gave me a spot down in the basement of their shop, which was anywhere from 47 to 52 degrees,” Feinberg said. “I had my jacket, my computer and I was making 400 calls a day.”
After three months of not funding any deals, Feinberg said he almost gave up. He was also focused mainly on the equipment finance market because that’s all he really knew.
“Then come to find out that I talked to somebody that had a need for working capital and I realized that I could find sources [for] capital,” Feinberg said.
So he worked with a few different sources to find capital for this client. The deal went through in 24 hours and it paid about $7,000 in commission.
“I didn’t have any money and I was like, ‘this is awesome,’” Feinberg said. “So I [kept] making 400 calls a day, knowing that this could potentially change my life.”
And it did. After a year, Feinberg’s company, Everlasting Capital, made $110,000 in commissions and $3.5 million in volume. Within that first year, he also hired three people and moved from the basement of the pawn shop in Rochester, NH to a 600 square foot office in the same town. (The current office is also in Rochester, but in a larger space.)
This lightning fast trajectory is by no means common. That’s why Everlasting Capital made it onto 2017’s Inc. 500 list, the iconic list of America’s fastest growing private companies. By year two, Everlasting Capital earned $640,000 in commissions, generating $14 million in volume, and by year three it earned $1.6 million in commissions with $18 million in volume. Ultimately, over a three year period ending in 2016, Everlasting Capital experienced 1,361 percent growth, placing them at No. 323 on the Inc. 500 list.
How did they do it? Feinberg said that creating a company and an office environment that employees enjoy is really critical, as is recognizing employees for their hard work.
“As long as we hit our goals which we have every year,” Feinberg said, “we take our company on a trip at the end of each year.” (Trips have included Las Vegas and Puerto Rico.)
More specifically, Feinberg said that the company’s success had a lot to do with building relationships with senior level people at top funding companies like Pearl Capital and BFS Capital. These relationships gave them higher [approved] volume, better buy rates and the ability to pay out good commissions to ISOs.
“This opened up a whole new aspect of our company,” Feinberg said. “Now, in addition to working with direct clients, we had an ISO division as well.”
But Feinberg said he wanted to create a reputable company to ensure that ISOs could feel comfortable working with them, knowing that Everlasting Capital was not backdooring their deals. So they created a portal for ISOs, called EverHub, which allows them to track their deals at every step along the way.
“We had to think outside the box to come up with a platform that was completely transparent and made it viable to work with another broker to get deals done,” Feinberg said.
There have definitely been hurdles along the way – most notably, employee retention.
“We hired and fired about 20 people in the second year,” Feinberg said. “We wanted to see if quantity would increase sales. Come to find out, it’s more quality than quantity.”
Partnership has been another challenge. The leadership team at Everlasting Capital is now Feinberg and Murphy. Feinberg’s brother, who was Murphy’s initial partner at the pawn shop (which has since been sold), is no longer involved in it.
Feinberg said that what makes for a good partnership is communication, early and often. And being able to hold partners accountable for different responsibilities.
“Partnerships are tough in business – they tend to get a little hairy, a little crazy at times,” Murphy said.
“Like myself and Josh, we have some different views on a lot of different things, but we take our different views and we meld them together to provide the best outcome for our employees and all the people we work with. Some may see that as a downside, but it’s actually a real strength.”
2017 Small Business Financing Leaderboard
March 14, 2018Thanks to several companies filing their annual earnings statements and Funding Circle disclosing their USA origination figures for 2017, we’ve been able to put together a leaderboard in the small business financing space. This list is not comprehensive and omits key players like PayPal Working Capital and Amazon Lending.
| Company Name | 2017 Originations | 2016 | 2015 | 2014 |
| OnDeck | $2,114,663,000 | $2,400,000,000 | $1,900,000,000 | $1,200,000,000 |
| Kabbage | $1,500,000,000 | $1,220,000,000 | $900,000,000 | $350,000,000 |
| Square Capital | $1,177,000,000 | $798,000,000 | $400,000,000 | $100,000,000 |
| Yellowstone Capital | $553,000,000 | $460,000,000 | $422,000,000 | $290,000,000 |
| Funding Circle (USA only) | $500,000,000 | |||
| BlueVine | $500,000,000* | $200,000,000* | ||
| National Funding | $427,000,000 | $350,000,000 | $293,000,000 | |
| Strategic Funding | $393,000,000 | $375,000,000 | $375,000,000 | $280,000,000 |
| BFS Capital | $300,000,000 | $300,000,000 | ||
| RapidAdvance | $260,000,000 | $280,000,000 | $195,000,000 | |
| Credibly | $180,000,000 | $150,000,000 | $95,000,000 | $55,000,000 |
| Shopify | $140,000,000 | |||
| Forward Financing | $125,000,000 | |||
| IOU Financial | $91,300,000 | $107,600,000 | $146,400,000 | $100,000,000 |
*Asterisks signify that the figure is the editor’s estimate
What’s a Broker To Do? Industry Execs Offer Their Insight
March 12, 2018
Below are excerpts from separate interviews with four industry executives when asked for tips or advice for brokers:
“I would just say to be in it for the long haul. Play the long game. Be the kind of quality partner that you would want in return. There are some brokers and referral sources in this space who see merchants only as a commission check, not as the going concern and business entities that they are. Some brokers are playing the short game, which is unfortunate, because brokers can be in a very powerful position with their clients (merchants) – they need to use that power wisely. If one were to carefully look at a business and its working capital challenges, and then tried to do what was in the best interest of that business in the long run, a broker could be creating a revenue stream for a longer period of time – on a healthier business – and in return creating a more sustainable brokerage platform for themselves. Be open and transparent – sometimes losing a deal due to full transparency can lead to many multiples of that volume with a loyal funding partner.”
– Bill Gallagher, President and Managing Partner, CFG Merchant Solutions | Read full interview
“Choose industries that you excel in—and own them.
Concentrate your marketing efforts on your core customers and target those that meet a lender’s criteria. It’s not the quantity of leads you deliver, it’s the quality—and that will save you time and money. Look for customers in growth stages, not those that are desperate for funds to stay afloat. This will also result in more renewals.
And find a lending partner with a strong brand, as this opens doors to new customers.”
– Michael Marrache, CEO, BFS Capital | Read full interview
“It is not an easy business and not for everyone. It takes quite some time – years – to either build an organization or to become a seasoned pro that truly understands the space. It is also very fast paced and ever changing, so you have to really commit and take the space seriously if you want to be successful.”
– James Webster, CEO, National Business Capital | Read full interview
“Brokering is a tough marketplace right now. I don’t want to say [it’s] saturated, but it’s getting pretty close…Everyone’s getting a million phone calls and mailings and the marketing is going crazy, and the expense is going up. So you really have to find a way to differentiate yourself.
That’s really the biggest thing about being a broker, besides quality service. It’s more: What kind of niche can I get into? How can I break into the market without having to spend like a million dollars a month on marketing? The biggest thing is: What can you do differently?”
– Evan Marmott, CEO, CanaCap | Read full interview
