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The Top 10 States for SBA 7(a) loans by loan count, cumulative over the last 10 years (2014-2023), sourced from Lumos Technologies. The average loan size for the last 10 years in these 10 states ranges from $269 thousand (Ohio) to $763 thousand (Georgia) The average loan size for the past 10 years for the total SBA program is $457 thousand.

From Forbes: Almost from its inception, the IRS and employers have experienced headaches from the employee retention credit (ERC). Much of the frustration now stems from the agency’s long processing times. According to the government, it needs more time to review and weed out dubious ERC claims from legitimate claims. But this explanation is of no help to employers with valid claims who contend the agency should act more quickly. As these frustrations grow, the IRS finds itself mired in more litigation involving the ERC. On December 1, 2023, a California employer filed a lawsuit against the agency alleging that its ERC guidance violated the Administrative Procedure Act. Shortly thereafter, on January 12, 2024, a Texas employer filed a lawsuit contending that the IRS had failed to issue an ERC refund even though the company had waited roughly two years. In a more recent lawsuit, an Arizona company has taken aim at the IRS’ decision to impose a moratorium on processing ERC claims that were submitted on or after September 14, 2023. See Stenson Tamaddon, LLC v. IRS, No. 2:24-cv-01123 (D. Ariz.). After filing a complaint for declaratory and injunctive relief on May 14, 2024, the company filed a motion for a preliminary injunction on May 30, 2024, asking the court to stop the moratorium. The government filed its response on June 14, 2024. In its response, the government raises numerous procedural arguments, including that the company lacks standing to bring its claims and that the government has not waived its sovereign immunity. Notably, the government also contends that the moratorium has not harmed employers—they remain free to file refund suits in federal court, provided the statutory six-month waiting period has passed, and will receive interest on their claims if they are meritorious. Although the dispute between the parties in Stenson Tamaddon LLC is interesting, perhaps more interesting are certain statements made by IRS Deputy Commissioner Douglas O’Donnell (Deputy O’Donnell) in an attached declaration supporting the government’s response. In that declaration, Deputy O’Donnell highlights the various headwinds the IRS has experienced in attempting to process pending ERC claims. He also provides some insights into what the agency intends to do to try to clear the backlog. Regarding causes for the delays, Deputy O’Donnell cites two dominant factors: the IRS’ archaic system for processing ERC claims and the sheer number of ERC claims the agency received. He notes that because ERC claims were generally filed via amended paper returns, the agency must scan each return into an “aged Correspondence Image Inventory (CII) system,” which cannot independently analyze them. Rather, that analysis must come from an individual IRS employee who “manually review[s] each amended return to determine whether it includes an ERC claim, and [who] must mark it with special coding to indicate that it is an ERC claim.” Read full story: https://www.forbes.com/sites/matthewroberts/2024/06/17/in-pending-litigation-irs-reveals-strategy-for-managing-erc-backlog/

From Techcrunch: Since fintech startup Brex’s inception in 2017, its two co-founders Henrique Dubugras and Pedro Franceschi have run the company as co-CEOs. But starting today, the pair told TechCrunch in an exclusive interview, the San Francisco-based corporate credit card and expense management company is shifting to a more traditional — and what they say should be a more agile — model of just one CEO at the helm. Franceschi will become the sole CEO while Dubugras will become chairman of Brex’s board. In an in-depth conversation, the two co-founders gave us a peek into what the new structure will look like, the company’s current state of finances and how it has managed to reduce its cash burn. The close friends started working together as co-founders of another company, Brazilian payment processing startup Pagar.me, in 2012 at the wee age of 16. (That company ended up getting acquired by Stone Pagamentos for “tens of millions of dollars” — before the two had even gone to college.) While both founders could code, they quickly realized that Franceschi was the “better coder.” Rather than having one person manage a part of the organization like product and engineering and the other one manage sales and marketing, they decided to split their duties as external and internal co-CEOs (a decision they touched on in this episode of the Found podcast last year).  The model worked so well at that company, they said, that they decided to employ the same strategy when they founded Brex after dropping out of Stanford to participate in the YC Winter 2017 cohort. Ups and downs The once high-flying company has been on a roller-coaster ride in recent years. Two years ago, it was valued at $12.3 billion after raising $300 million and had poached former Meta exec Karandeep Anand to serve as its chief product officer after having led Meta’s business products group. (He was then named the first president of the company in November of 2023.) In January, Brex laid off 282 people, or about 20% of its staff. That was after an October 2022 layoff of 136 people, or 11% of its staff, across all departments as part of a restructuring. Today, it has 1,000 workers. There’s also been a lot of shuffling among Brex’s management. Sam Blond left his role as chief revenue officer in 2022 to join Founders Fund (a position he departed in March). Earlier this year, Brex announced that its COO, Michael Tannenbaum, was transitioning from his role to become a board member. At that time, Camilla Morais, who was SVP of global operations, was promoted to COO. And it was announced that Cosmin Nicolaescu was transitioning from his role as CTO to an adviser position this summer. Read full story: https://techcrunch.com/2024/06/12/fintech-brex-abandons-co-ceo-model-talks-ipo-cash-burn-and-plans-for-a-secondary-sale/

Published today on our blog! @Carolyn McClure https://www.funderintel.com/post/our-interview-with-carolyn-mcclure-of-loeb

From the Times Union on July 5th: Lawyers involved in the federal bankruptcy cases involving embattled Albany financier Kris Roglieri and his now-defunct commercial lending firm Prime Capital Ventures may have reached a financial settlement to pay off creditors. Terms of the negotiations are not yet available but an attorney involved in the case recently notified Bankruptcy Court judge Robert E. Littlefield Jr. that those involved in the matter have agreements to resolve Roglieri’s bankruptcy and the bankruptcy of his firm. “We are pleased to report that Mr. (Paul) Levine as permanent receiver of the debtor and Christian H. Dribusch as Chapter 7 trustee of the estate of Kris Roglieri, have been able to craft a term sheet for a path forward which, in (Levine and Dribusch’s) view, is the best way to maximize the recovery to creditors in both cases,” attorney Stephen Donato, an attorney for Prime Capital Ventures, wrote in a letter to the judge. “It is anticipated that a motion for approval of the term sheet will be filed shortly.” The disintegration of Roglieri’s company prompted his creditors to file lawsuits over the last year alleging he stole millions of dollars for loans they never received. In May, Roglieri was arrested by the FBI and charged with one count of wire fraud in connection with the company. Before it was shut down, Prime Capital Ventures offered up large, interest-only commercial lines of credit in exchange for large cash deposits of roughly 20 percent of the loan. Federal prosecutors handling the case against Roglieri have so far pursued just a single count of wire fraud, but it is alleged in both the criminal complaint and previously filed lawsuits that Roglieri took the cash deposits and spent them on luxury cars, watches and artwork. FBI raided his Queensbury home over the winter as part of the criminal investigation to seize a dozen cars, But Roglieri’s estate has millions of dollars in assets that include other cars, antiques and collectible watches. Much of Roglieri’s debts are tied up in tax and legal bills. https://www.timesunion.com/business/article/roglieri-prime-capital-ventures-bankruptcy-cases-19556000.php

SAN FRANCISCO, Sept. 17, 2024 (GLOBE NEWSWIRE) -- Fundbox, a leading embedded capital platform for SMBs, announces a new credit facility with Cross River, a technology infrastructure provider that offers embedded financial solutions, and Waterfall Asset Management, a global alternative investment advisor. The agreement brings Fundbox’s total annual origination capacity to over $2B, including existing capacity. The financing facilities will support Fundbox’s mission to empower the SMB economy by meeting the working capital needs of small businesses, primarily through embedded experiences in the tools they use every day. Fundbox’s cross-platform data sharing and cutting-edge underwriting technology enable SMB platforms to offer capital to their customers right within their products. The backing of Cross River and Waterfall will further enable Fundbox to develop innovative products to help platform partners deliver the funding their small business customers need. “Small businesses need capital more than ever before. The number of US small businesses grew 3x the rate of the US consumer population in the last decade, while bank funding for SMBs has fallen 15% year-over-year,” said Renuka Nayani, Fundbox CFO. “Credit capacity from Cross River and Waterfall help ensure we are well-capitalized to meet this need. We are thrilled to work with these established institutions to help close the trillion-dollar gap in small business funding.” Full story below: https://www.globenewswire.com/news-release/2024/09/17/2947664/0/en/Fundbox-Secures-Warehouse-Capacity-from-Cross-River-and-Waterfall-Asset-Management.html

Two Democratic senators have urged regulators to ban the use of the Federal Deposit Insurance Corp. name or logo by firms that provide products only eligible for pass-through FDIC insurance and establish clear rules for banking-as-a-service companies. In a letter sent Wednesday, Sens. Elizabeth Warren, D-MA, and Chris Van Hollen, D-MD, highlighted that the partnerships between banks, BaaS providers like Stripe, Finastra, Synapse, and Marqueta and fintechs like Venmo, Cash App, Yotta, and Chime pose a threat to consumer safety and soundness. They asked the heads of the Federal Reserve, Office of the Comptroller of the Currency, and the FDIC to exercise their power under the Bank Service Company Act and the Federal Deposit Insurance Act to directly monitor the organizations and bring enforcement action against the companies if they violate the established rules. “The rapid growth of these partnerships risks harming consumers while posing a broader threat to the stability of our banking system and the economy,” the senators wrote. “The risks are clear.” Revenue from BaaS is expected to reach $17.3 billion in 2026, according to the letter.  Bank-fintech partnerships “can involve elevated risks,”  including providing misleading or insufficient information to end users, the senators wrote. Warren and Van Hollen pressed the heads of the federal agencies to prohibit the use of misrepresentations related to FDIC insurance. Companies like Yotta, they wrote, put more emphasis on “FDIC-insured” in large text on their websites while explaining what the term means – that the money is held in an account eligible for pass-through FDIC insurance of up to $250,000 through the partner bank – in smaller text. https://www.bankingdive.com/news/lawmakers-warren-van-hollen-push-crackdown-fintech-ban-false-claims/727005/

Good article for those who need a refresher or are just trying to keep up with the law changes in several states. Connecticut and Kansas recently joined California, New York, Florida, Utah, Virginia, and Georgia in enacting laws requiring lenders to provide consumer-like financing disclosures for certain commercial financing transactions. Like other jurisdictions’ so-called “Business Truth in Lending” laws, Connecticut and Kansas’s newly enacted laws cover, at a minimum, traditional business-purpose loans, along with accounts receivable financing, factoring, and merchant cash advances. Both laws took effect July 1, 2024, but Connecticut took a “no-action position” on companies providing the required disclosures until Sept. 30, 2024. This GT Alert is intended to remind industry participants of the changes in these state laws requiring such disclosures and, potentially, registration with a state regulatory agency. Connecticut SB 1032, a commercial financing registration and disclosure law, requires providers of “sales-based financing” to provide disclosures to commercial borrowers beginning July 1, 2024, and register with the Connecticut Department of Banking by Oct. 1, 2024. The law defines “sales-based financing” as “a transaction that is repaid by the recipient to the provider over time (A) as a percentage of sales or revenue, in which the payment amount may increase or decrease according to the volume of sales made or revenue received by the recipient, or (B) according to a fixed payment mechanism that provides for a reconciliation process that adjusts the payment to an amount that is a percentage of sales or revenue.” At a minimum, the term brings accounts receivable financing, factoring, and merchant cash advances within its scope. Significantly, the disclosure and registration requirements only apply to sales-based financing amounts up to $250,000. Moreover, the law exempts the following entities from the requirements: • Any bank, out-of-state bank, bank holding company, Connecticut credit union, federal credit union, out-of-state credit union, or any subsidiary or affiliate, as defined in applicable Connecticut law; • Any person acting as a technology services provider to an entity exempt under SB 1032, as long as the technology services provider is not involved in or profiting from the commercial financing transactions made by the exempt entity; • A lender regulated under the federal Farm Credit Act; • Any person or provider who extends or brokers a commercial financing transaction secured by real property; • Any person or provider who extends or brokers a lease, as defined in applicable Connecticut laws; • Any person or provider who extends or brokers a purchase-money obligation, as defined in applicable Connecticut laws; • Any person or provider who extends not more than five commercial financing transactions in Connecticut in a 12-month period; • Any person or provider who extends or brokers a commercial financing transaction entered into pursuant to a commercial financing agreement or commercial open-end credit plan of at least $50,000, in which the recipient is (i) a dealer, as defined in applicable Connecticut laws, or an affiliate of such a dealer, or (ii) a motor vehicle rental company, or an affiliate of such company; or • Any person or provider who extends or brokers a commercial financing transaction relating to the sale of products or services that such person or provider manufactures, licenses, or distributes, or whose parent company, subsidiary, or affiliate manufactures, licenses, or distributes. Disclosure Requirement Since July 1, 2024, non-exempt commercial financing providers and commercial financing brokers have been required to provide the following disclosures when extending a specific offer of financing in Connecticut: • The total amount of the financing; • The disbursement amount; • The finance charge; • The total repayment amount; • The estimated time period required for periodic payments; • The payment amounts and frequency, or a payment schedule and the amount of the average projected payments per month; • A description of all other potential fees and charges not included in the finance charge; • Any finance charge the recipient is required to pay if the recipient prepays the repayment amount, with some exclusions; • Any additional fees, not already included in the finance charge, if the recipient prepays the repayment amount; • A description of collateral requirements or security interests; • Whether the provider will pay compensation directly to a commercial financing broker out of the financed amount and, if so, the amount of the compensation; and • If the provider requires the recipient to pay off the balance of an existing commercial financing from the same provider, the amount of the new commercial financing that is used to pay off the portion of the existing commercial financing that consists of prepayment charges required to be paid and any unpaid interest expense that was not forgiven at the time of renewal. The Connecticut Department of Banking published guidance and a commercial financing disclosure form a few weeks prior to the July 1, 2024, effective date and issued a “no-action position,” stating that it will not take enforcement action for a provider’s failure to provide the required disclosures for specific offers of commercial financing issued from July 1 to Sept. 30, 2024. Providers have until Oct. 1, 2024, to comply with the disclosure requirement, which coincides with the date upon which such providers must be registered with the Department of Banking for such activities. Please note that the exact disclosures required may vary based on the specifics of the financing transaction. To ensure compliance, market participants should consider reviewing the entire text of SB 1032 and consulting with legal counsel to ascertain the exact disclosures required with respect to any applicable financing transaction. Registration Requirement The Connecticut Department of Banking recently released applications through the Nationwide Multistate Licensing System & Registry (NMLS) for a Commercial Financing Broker Registration and Commercial Financing Provider Registration. The applications are relatively light and do not require providers to submit much supplementary information beyond what is contained in the company MU1 Form. Providers may wish to submit their applications in short order, as the state will require all non-exempt providers to register with the Department of Banking by Oct. 1. FULL STORY https://www.gtlaw.com/en/insights/2024/9/new-commercial-financing-laws-take-effect-in-connecticut-kansas?utm_source=mondaq&utm_medium=syndication&utm_content=articleoriginal&utm_campaign=article

Iron Horse Credit (“Iron Horse”), a leading non-bank, asset-based lender, is pleased to announce it has secured a $40MM senior credit line from Forbright Bank and MA Asset Management (formerly Blue Elephant Capital Management) with an additional $30MM accordion. Iron Horse has also locked in an additional $5MM of Subordinate Capital from PruVista Capital.  These new facilities will allow IHC to continue the expansion of its loan origination footprint and fuel growth initiatives. With the completion of these transactions, Iron Horse will continue to provide asset-based debt capital solutions to small-to-medium sized enterprises that regularly face capital constraints and cannot easily access traditional sources of financing through banks. “We are pleased to have collaborated with the Forbright Bank, MA Asset Management & PruVista Capital teams to successfully establish this credit facility,” said Bill DiPaula, CEO of Iron Horse Credit. “These relationships enhance our capacity to accomplish our strategic growth plans.” https://www.sfnet.com/home/industry-data-publications/the-secured-lender/tsl-express-daily-articles-news/tsl-express-daily-articles-news/2024/07/29/iron-horse-credit-secures-a-%2440-million-senior-credit-facility-and-%245mm-of-subordinate-capital?utm_source=iContact&utm_medium=email&utm_campaign=tsl-express&utm_content=TSL+Express+-+Tuesday%2C+July+30%2C+2024

The Internal Revenue Service (IRS) issued yet another update regarding the processing of Employee Retention Credits (ERC), warning taxpayers to thoroughly check their claims for “warning signs” of incorrect information. These warning signs flag claims as being fraudulent to the service, and the IRS is offering more opportunities to correct or withdraw such claims before further “compliance efforts” are announced in “the coming days.” Last month, the IRS announced that the moratorium was over and it would again begin processing low risk ERC claims. While many in the tax world begroaned the IRS for not simply processing those low-risk claims, it was still seen as a good sign that the claims were again going to be processed. Concerning to most taxpayers, however, was that 85% of the claims held by the IRS were seen as medium or high-risk claims and would undergo further scrutiny. Last week’s announcement by the IRS details further signs that the IRS will consider claims to be fraudulent, or “incorrect,” and asks taxpayers to review their claims—processed and unprocessed—to ensure they do not exhibit these signs. The five warning signs published by the IRS last week are in addition to the seven warning signs they previously warned the public about. Businesses and individuals with pending claims are being asked to review paid and unprocessed claims for these warning signs to ensure they are accurate. Anyone finding these warning signs or having questions about their claims is asked to speak with a trusted tax professional. The IRS again touted the ERC Withdrawal Program as a way for taxpayers to remove those claims they now believe may not fit the requirements of the program. Resolving incorrect claims now can help taxpayers avoid audits, repayment, penalties and interest. The service stops short of suggesting that these claims were filed with the intent to deceive. Instead, the IRS has doubled down on criticism of various so-called ERC promotors who they believe are the cause for the influx of high-risk claims. IRS communications regarding ERC claims often target so-called Promoters, accusing them of purposefully luring taxpayers to file claims for which they are not eligible. “The IRS continues working aggressively to pursue improper claims as well as increase payments going out to businesses with legitimate claims on these complex credits,” said IRS Commissioner Danny Werfel. “As we prepare for the next major announcement, we want businesses to be aware of common errors our compliance teams are seeing, many of which reflect bad advice coming from promoters. The IRS continues to urge people with pending claims or previously approved payments to talk to a trusted tax professional rather than a promoter and see if any of these red flags apply to them.” https://www.forbes.com/sites/irswatch/2024/08/05/spotlight-shifts-to-warning-signs-in-latest-erc-update-from-irs/

Just as the SBA opened up comments to their new Working Capital Pilot program the trade group SFnet wrote a letter to the SBA with its thoughts on the issues this program they felt would cause. Their main point from the letter is that the unintended consequences "will be to put the SBA’s Working Capital Pilot Program in direct competition with those(ABL) existing private lenders, many of whom are our members, who presently lend in the identical marketplace which the Proposed Rule intends to serve." Download the letter here

We have been getting spammed by this company through our contact us form endlessly and want to ask if anyone else has been getting these emails?? Heres the youtube channel we found https://www.youtube.com/channel/UC8vx4_DVv54_fX56VXTH5UQ Seems like Joshua Cohen is the owner. Heres a review about another company mentioned on that channel http://orlandoseogroup.com/your-new-secret-weapon-josh-cohen-absolutely-scam/ Any other info about them please provide below?