All Registered Sales-based Financing Providers in Virginia (As of 3-29-23)

Is the revenue-based financing provider you do business with registered to operate in Virginia? On July 1, 2022, Virginia’s commercial financing disclosure law went into effect and with that the necessity to register one’s business. As of March 29, 2023, 101 companies had registered. This is the official list of registered sales-based financing providers as of that date (yellow means it has been added since our last update):

• Advance Servicing Inc.
• Accredited Business Solutions LLC dba The Accredited Group
• Advance Funds Network LLC dba Advance Funds Network
• AdvancePoint Capital LLC dba advancepoint
• Ally Merchant Services LLC
• Alpine Funding Partners, LLC
• Business Capital LLC
• Byzfunder NY LLC dba Tandem dba Nano-FI
• Bridge Capital Services, LLC
• CFG Merchant Solutions, LLC
• Clarify Capital II LLC dba Clarify Capital
• Cloudfund VA LLC dba Cloudfund LLC
• Capflow Funding Group Managers LLC
• Clear Finance Technology (U.S.) Corp. dba Clearco
• Coast Premier LLC dba Coast Funding
• Commercial Servicing Company, LLC
• Corporate Lodging Consultants, Inc.
• Crown Funding Source LLC dba Crown Funding Source
• Diesel Funding LLC
• Direct Capital Source Inc.
• Dealstruck Capital LLC
• EBF Holdings, LLC
• Essential Funding Group Inc
• Errant Ventures LLC
• FC Capital Holdings, LLC FundCanna
• Fidelity Funding Group LLC
• Front Capital LLC
• Finova Capital, LLC
• Fintegra, LLC
• First Data Merchant Services LLC
• First Path Capital Ventures LLC dba First Path Capital
• FleetCor Technologies Operating Company, LLC
• Flexibility Capital Inc.
• Fora Financial East LLC
• Forward Financing LLC
• Fox Capital Group Inc.
• Fundamental Capital LLC
• Funding Metrics, LLC dba Quick Fix Capital
• Good Funding, LLC
• Granite Merchant Funding, LLC
• Invision Funding LLC
• Itria Ventures LLC
• Jaydee Ventures, LLC dba 1 West Capital dba 1 West Commercial
• Kapitus LLC
• Knight Capital Funding III, LLC
• Lexington Capital Holdings Ltd
• LG Funding LLC
• Legend Advance Funding II, LLC dba Legend Funding
• Liberis US Inc.
• Libertas Funding, LLC
• Liquidibee 1 LLC dba Liquidibee LLC dba Altfunding.com
• Loanability, Inc.
• Millstone Funding Inc.
• National Funding, Inc.
• Nav Technologies, Inc.
• Orange Advance LLC
• Pearl Alpha Funding, LLC
• Pearl Beta Funding, LLC
• Pearl Delta Funding, LLC
• Proto Financial Corp.
• PWCC Marketplace, LLC
• Parafin, Inc.
• PayPal, Inc.
• Payability Commercial Factors, LLC
• Pinnacle Business Funding LLC dba Custom Capital USA dba EnN OD Capital
• Platform Funding LLC
• Prosperum Capital Partners LLC dba Arsenal Funding
• QFS Capital LLC
• RFG USA Inc.
• Rival Funding, LLC
• Riverpoint Financial Group Inc.
• Rocket Capital NY LLC
• ROKFI LLC
• Ruby Capital Group LLC
• Rapid Financial Services, LLC
• Reliant Services Group, LLC
• Retail Capital LLC dba Credibly
• Revenued LLC
• Rewards Network Establishment Services Inc.
• Secure Capital Solutions Inc.
• Sky Bridge Business Funding, LLC
• SMB Compass LLC dba SMB Compass
• Sunrise Funding LLC
• Santa Barbara Tax Products Group, LLC
• SellersFunding Corp.
• Sharpe Capital, LLC
• Shine Capital Group LLC
• Shopify Capital Inc.
• Shore Funding Solutions Inc.
• Streamline Funding, LLC
• Stripe Brokering, Inc.
• The LCF Group, Inc.
• Unique Funding Solutions LLC
• United Capital Source Inc.
• Upfront Rent Holdings LLC
• Upper Line Capital LLC
• Vader Servicing, LLC
• Velocity Capital Group LLC
• Vivian Capital Group LLC
• Vox Funding, LLC
• ZING Funding I, LLC

Big Short Seller’s Allegations About Block Don’t Make Block Look Too Good

Block, the parent company of Square Loans, suffered a rough day in the market (down 15%) on Thursday after an activist short seller made bombshell allegations about the way Block conducts its business. Hindenburg Research, the short seller, posted a report of alleged findings it had uncovered over a period of two years. In Block: How Inflated User Metrics and “Frictionless” Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion, the report focuses almost entirely on alleged shenanigans with Cash App. Block has often been referenced in the pages of AltFinanceDaily because of its massive small business lending subsidiary, Square Loans, which last year originated $4 billion in funding to merchants. That subsidiary was not the subject of the report.

While one can read the report on their own and form their own opinion, which the authors hope to profit from by Block’s stock going down, it should be noted that the timing of its release is a little suspicious. Block, for all the bells and whistles it has in payments and lending, is at its core these days, a crypto company. Block generated $7.1B in revenue just off of Bitcoin alone in 2022, perhaps making it an easier target given the string of recent events.

3/12/23

• Regulators shutter Signature Bank. Rumors abound that it was less about solvency and more about governmental dislike of its crypto clientele.

3/22/23

• Coinbase reveals that it received a Wells Notice from the SEC
• Tron founder Justin Sun sued by the SEC
• Several celebrities including Lindsay Lohan charged by the SEC for failing to disclose compensation they received for crypto promotions
• The President published his annual Economic Report which referenced crypto with astounding frequency

3/23/23

• Hindenburg Research releases its report about Block, causing the company stock to plummet 15% in a day. Although the focus is not on crypto, Block’s big revenue generator is Bitcoin, which generated $7.1B in revenue for the company in 2022.

All Registered Sales-based Financing Providers in Virginia (List)

Is the revenue-based financing provider you do business with registered to operate in Virginia? On July 1, 2022, Virginia’s commercial financing disclosure law went into effect and with that the necessity to register one’s business. As of March 8, 2023, this is the official list of registered sales-based financing providers:

• Advance Servicing Inc.
• Accredited Business Solutions LLC dba The Accredited Group
• Advance Funds Network LLC dba Advance Funds Network
• AdvancePoint Capital LLC dba advancepoint
• Ally Merchant Services LLC
• Alpine Funding Partners, LLC
• Business Capital LLC
• Byzfunder NY LLC dba Tandem dba Nano-FI
• Bridge Capital Services, LLC
• CFG Merchant Solutions, LLC
• Clarify Capital II LLC dba Clarify Capital
• Cloudfund VA LLC dba Cloudfund LLC
• Capflow Funding Group Managers LLC
• Clear Finance Technology (U.S.) Corp. dba Clearco
• Coast Premier LLC dba Coast Funding
• Commercial Servicing Company, LLC
• Corporate Lodging Consultants, Inc.
• Crown Funding Source LLC dba Crown Funding Source
• Diesel Funding LLC
• Direct Capital Source Inc.
• Dealstruck Capital LLC
• EBF Holdings, LLC
• Essential Funding Group Inc
• Errant Ventures LLC
• FC Capital Holdings, LLC FundCanna
• Fidelity Funding Group LLC
• Front Capital LLC
• Finova Capital, LLC
• Fintegra, LLC
• First Data Merchant Services LLC
• FleetCor Technologies Operating Company, LLC
• Flexibility Capital Inc.
• Fora Financial East LLC
• Forward Financing LLC
• Fox Capital Group Inc.
• Fundamental Capital LLC
• Funding Metrics, LLC dba Quick Fix Capital
• Good Funding, LLC
• Granite Merchant Funding, LLC
• Invision Funding LLC
• Itria Ventures LLC
• Jaydee Ventures, LLC dba 1 West Capital dba 1 West Commercial
• Kapitus LLC
• Knight Capital Funding III, LLC
• Lexington Capital Holdings Ltd
• LG Funding LLC
• Legend Advance Funding II, LLC dba Legend Funding
• Liberis US Inc.
• Libertas Funding, LLC
• Liquidibee 1 LLC dba Liquidibee LLC dba Altfunding.com
• Loanability, Inc.
• Millstone Funding Inc.
• National Funding, Inc.
• Nav Technologies, Inc.
• Pearl Alpha Funding, LLC
• Pearl Beta Funding, LLC
• Pearl Delta Funding, LLC
• Proto Financial Corp.
• PWCC Marketplace, LLC
• Parafin, Inc.
• PayPal, Inc.
• Payability Commercial Factors, LLC
• Pinnacle Business Funding LLC dba Custom Capital USA dba EnN OD Capital
• Platform Funding LLC
• Prosperum Capital Partners LLC dba Arsenal Funding
• QFS Capital LLC
• RFG USA Inc.
• Rival Funding, LLC
• Riverpoint Financial Group Inc.
• Rocket Capital NY LLC
• ROKFI LLC
• Ruby Capital Group LLC
• Rapid Financial Services, LLC
• Reliant Services Group, LLC
• Retail Capital LLC dba Credibly
• Revenued LLC
• Rewards Network Establishment Services Inc.
• Secure Capital Solutions Inc.
• Sky Bridge Business Funding, LLC
• SMB Compass LLC dba SMB Compass
• Santa Barbara Tax Products Group, LLC
• SellersFunding Corp.
• Sharpe Capital, LLC
• Shine Capital Group LLC
• Shopify Capital Inc.
• Shore Funding Solutions Inc.
• Streamline Funding, LLC
• Stripe Brokering, Inc.
• The LCF Group, Inc.
• United Capital Source Inc.
• Upfront Rent Holdings LLC
• Upper Line Capital LLC
• Vader Servicing, LLC
• Velocity Capital Group LLC
• Vivian Capital Group LLC
• Vox Funding, LLC
• ZING Funding I, LLC

The Merchant Cash Advance Journey from Broker to Funder

As merchant cash advances have become a popular financing option for small businesses in recent years, it has quickly become obvious how lucrative it can be to make the transition from working the phones to working the deals.

The transition from broker to funder can provide significant benefits: by becoming a funder, you have the opportunity to control the entire process from start to finish. Driving the deals, you have the opportunity to make more money, and can establish relationships with banks and payment processing systems that align with your business goals. You can choose a CRM system that best fits your needs and invest in a strong legal and accounting infrastructure to ensure compliance and accountability. Additionally, as a funder, you have the ability to diversify your portfolio and make informed decisions on the types of deals you want to fund, which can lead to higher returns and more stable growth.

While many brokers have the gift of the gab and expertise to sell the advances, they may not have the necessary knowledge of systems and processes in place to manage the risk and operational aspects of the business to go to the next level. Additionally, funders, more than brokers, have the relationships with banks, CRM systems, collection firms, and legal entities that are necessary to run a successful merchant cash advance funding business. The lack of these critical components can limit the growth potential of a broker.

The evolution from a broker to a funder is not just a matter of expanding the business, but it requires a complete overhaul of the systems, processes, and legal frameworks. In this article, let’s explore the key steps that a broker needs to take to become a successful merchant cash advance funder.

Step 1: Having The Right Bank Account

Having a proper bank account is the first step towards becoming a merchant cash advance funder.

Traditional banks, such as Chase and Bank of America, are not built for the rapidly brave new world of financing options, and instead cater to the old models. If they see (what they deem to be) ‘irregular’ incoming and outgoing payment just as you begin offering your first few deals, they can cause you a lot of stress, and even shut your account.

Researching all the options available before you begin funding deals is crucial to build up your business and to avoid stress down the road.

Step 2: Finding The Best ACH Payment Processor

The best way to accept the daily payments owed to you is by working with an ACH payment processor that understands the MCA space. While some traditional banks do offer ACH ‘pulling’ for free, their service is often tied to the amount you have sitting in your account at the bank, which means it’s not working for you to make more. For example, some stipulate that your account needs to have three times the amount that you’re planning to pull daily, just sitting there. So if you’re pulling $200,000 a day, now you have to have $600,000 just sitting there in reserve, which you can’t use to fund other deals you could be making money on.

Instead, finding ACH payment processors that specifically understand the business and your needs will free you up to strive to collect as much as you can, every single day. While it might cost you a little bit, you have the option to now make that calculation of whether it’s better to have free ACHs or have the money available to fund deals and make money off of. A wise man would tell you the latter is the right way to go.

Step 3: Picking A CRM System

A CRM system is an essential tool for tracking the deals, payments, and collections. There are about 8-10 mainstream CRM systems that cater to merchant cash advance funders, and the choice of the CRM system depends on the volume of deals you fund, the presence of syndicators, and the type of deals you fund.

Pick a system that best serves your needs: how it accounts for sub deals and tranches, whether it helps you identify the best and worst performing deals, and if it generates the reports you need to make the most informed choices for your business going forward.

Step 4: Setting Up Your Legal Framework

Setting up a legal framework for contracts is an important step in the journey from a broker to a funder. A proper legal framework ensures that the contracts are enforceable and protects your interests.

It is worth consulting with a lawyer familiar with merchant cash advance to help you prepare thorough contracts for the businesses you advance, your ISO’s and brokers, to ensure you are secure from any attempts to avoid payment and backdooring on your own deals.

Step 5: Collections

In an ideal world, every deal a MCA business funds would get paid pack easily and smoothly, but frequently, that is not the case. Too often, business owners prove why they needed the advance in the first place, and repeat the mistakes and bad habit that puts them in a perilous financial position once again.

If they don’t pay you, your business will quickly begin to suffer and face increasing cash flow problems if you don’t handle it quickly, so having a reliable collection system is crucial for the success of a merchant cash advance funder. It’s good to ensure you understand your options to give yourself the best chance of recovering what you’re owed, including working with a third-part collections firm. The choice of a collection firm depends on the success rate and the level of support provided. A good collection firm should have a well-prepared collection attorney, provide timely support and have a strategy to collect on delinquent merchant cash advances.

Step 6: Accounting

Proper accounting is essential for tracking the overall health and viability of your company. It’s also especially important if you have a partnership or investment in place.

Better Accounting Solutions has been the leading accounting firm in the MCA industry for over a decade, and seen how successful a company can be when all their books are in order and the tremendous pressure and stress caused when it’s not.

Working with an accountant that is familiar with the industry and systems will help you ensure your business is legally compliant, trending in the right direction, and that all deals are in a good place.

Step 7: Lead Sourcing

You’ve set up the business, now you need customers!

There are several ways to find people and businesses who could use a merchant cash advance from your new business. You could reach out to family and friends, research and cold-contact people online or work with lead-generation agencies who will send you lists of hot prospects. Additionally, if you’ve already done all the previous steps listed here, then you can speak to the people you’re already familiar with in the industry to point prospects your way. For example, Better Accounting Solutions has drawn on our years of experience in the industry to connect new funders with brokers we know and trust.

Typically, if you’re a broker becoming a funder, than you already have the relationships with people who can direct customers to your new venture, but I always advise our clients to avoid backdooring or doing something with even the slightest inference of unethical business practices; its bad karma and can only hurt you down the line.

So there you have it, the seven steps of going from broker to funder, and taking your merchant cash advance journey to the next level. Wishing you the best of luck!