Payoneer Funds $80M in MCAs in Q1

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.”

Cloudsquare Unveils Game-Changing Lender APIs for Streamlined Submissions

New 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.

At the AFBA Conference

I’ll be moderating a panel on “Hot Topics in Revenue Based Finance” at the Alternative Finance Bar Association (AFBA) conference early Tuesday morning at the office of Covington & Burling in Times Square, NYC. (Agenda here) This is the AFBA’s 6th annual conference. The first day (June 3) of the two-day event was only open to attorneys, while business people are permitted to attend on day two (June 4).

Panelists include:
• Heather Francis, Elevate Funding
• John Viskocil, Fora Financial
• Mary Donohue, Revenue Based Finance Coalition
• Marshall F. Goldberg, Glass & Goldberg

Among the major speakers of the day will be Andrew Smith, a partner at Covington & Burling LLP, who was formerly the Director of the Bureau of Consumer Protection at the FTC.

How Everybody Suddenly Became a Direct Funder

It’s hard to distinguish a broker from a funder these days especially in an environment where seemingly reliable evidence might not indicate what you think it does. For instance, I recently made an off-the-cuff post about “white label funding” on social media that opened up a lot of eyeballs to a practice that’s been happening behind the scenes for years that could totally change what you think you know about the business, and help explain why deals might be spreading further beyond what a broker intended. For instance, the catchphrase “of course we’re direct, just check our lawsuits out in the courts,” cannot be relied upon to indicate one is direct at all. Say what!

Here’s how white labeling came about, what it means (roughly speaking), and how it works. Please note there are certainly many iterations and variations to it:

More than ten years ago, the MCA arms race to recruit ISOs became ultra competitive and everyone began looking for an edge. Some tried high commissions or faster approvals or higher risk funding or customer service and so on and so forth. Others got more creative, turn the ISOs themselves into funders and leverage their incredible abilities to sell themselves! If a broker was called Cool Funding Co, then the funder might organize an LLC or register a DBA with an extremely close spelling, like Cool Funding Capital, LLC or Cool Funds Co, Inc, something that otherwise wouldn’t raise any eyebrows if one was dealing with Cool Funding Co. The real Cool Funding Co, white label entity in hand from a funder, could now market itself as “direct” and take to the interwebs and telephones to solicit deals from fellow brokers. When Cool Funding Co would get the deal, they would direct it to the real funder, who then prepares a contract with the white labeled name that looks very much like Cool Funding Co. Cool Funding Co gets a cut of every deal funded and also the honorary and distinguished advantage of being a funder in a market full of brokers! They can even syndicate on them which perhaps makes it look and feel even more direct!

Thus kicked off an extraordinary boom of white labeling, which carries through from beginning to end. If a deal defaults under the Cool Funding Capital, LLC contract, then that’s the name that will appear as a plaintiff in the court system. Hence, court records can be misleading to an outside observer who aren’t aware of this practice. You might be dealing with Cool Funding Co, but Cool Funding Capital is actually another funder entirely who actually did the deal behind the scenes.

Not content to let just one funder dominate this market, dozens of funders followed by offering white label services to brokers to front as a funder. This would allow brokers to shop a deal around to all those they have a white label relationship with and create the appearance that whomever approved it was actually them in the end. For a time, not offering white labeling was considered a major disadvantage because then brokers would have to reveal some other company’s name on the contract, risking the possibility that whichever broker they had solicited would cut them out of the process in the future and go truly direct.

The only tell would be that suddenly Cool Funding Co sure seemed to have a lot of legal names, like Cool Funding Capital, Cool Funding Two, Cool Merchant Funding, Cool Cap, and more, both on their contracts and in the court system, all indications but not necessarily definitive proof of white labeling. And not to say that any of this is deceptive or bad or immoral. White labeling exists in many industries and at the end of the day it allowed really good sales people to capitalize on the relationships with people who already liked them. It was smart, genius even. And if the deals get funded and everyone is happy, who cares?

Even some funders got in on it too, shopping out their declines to other funders only to put out a contract in front of their broker with a white label, leaving them to have no idea that someone else is actually doing the deal. Again, this isn’t necessarily deceptive, and can easily be marketed as a benefit. Instead of a broker having to waste time submitting a deal to five funders, they can submit to just one that they really like and the funder will get it done whether on their own balance sheet, through syndication, or through a white label somewhere else. The broker will only have to deal with that one relationship. The deals get done. Everybody wins.

The ironic thing is that white labeling became such a common feature that few people even talk about it anymore. White labeling can even be done in-house in which a funder today can just be a composite of several different syndication funds all while being white labeled under one marketable brand name. The point is that determining who is direct is not easily determined, and especially not from “looking someone up in the courts.” If there is one solid takeaway from this information its to be informed about what is possible and to help you ask better questions with potential relationship partners.

Ask questions things like these:

• Do you rely on white labeled contracts?
• Do you rely on syndication? If so, from who, where?
• How many of your own underwriters do you have? Can I speak to them?
• How much of your own money do you put in the deal?
• If I look up the legal entity on your funding contract, who will show as the owner?

Red flags for a possible white label or broker:

• Says they can fund any and every type of deal
• Multiple commission structures
• Relies entirely on statements like “look me up in the courts” for authenticity

And there you have it. Be careful out there. A great way to cut through the nonsense is to get to know your relationships in person! There are also plenty of funders who don’t white label at all because they don’t want to deal with any of the risk or complexities that come with it.