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A new report by PYMNTS Intelligence and commissioned by Visa called "How Embedded Lending Can Boost Growth and Stability for Small Businesses" was just released. In the video below I review the report to point out some of the highlights and details. This report is important for those trying to adapt and stay ahead of the changing ways of commercial finance, alternative lending, and fintech.

Recently I had the opportunity to meet Carolyn McClure of Loeb at an event and wanted to learn more about her and share that with you. So the following is an interview with Carolyn that covers what Loeb does, how she got into the industry, our lightning round of off-topic questions, and more! Shane Mahabir: First, please tell me who you are, where you're from and based, and why you are in Finance. Carolyn: My name is Carolyn McClure and I have 26 years of experience working as a direct lender in the alternative finance industry, based out of St. Augustine FL with Corporate HQ in Chicago, IL. I enjoy working in finance as I can speak with a variety of business owners every day and learn about their businesses, their working capital needs, and how I can assist them. What were you doing before this? I have worked with many forms of finance from factoring to supply chain finance, purchase order funding to asset-based loans. Tell me more about what your company does, the products you offer, and guidelines. Since 1880, Loeb has provided auction and liquidation services for machinery and equipment, appraisals since the 1960’s and asset-based loans, lines of credit and sale leasebacks since the 1990’s. We also offer debtor-in-possession financing. Capital Stack Preferences:  Senior, 1st position on machinery and equipment. Preferred Structures: Asset-based loans, lines of credit and sale lease backs against M&E (only), covenant free, 2-to-3-year terms amortized over 4 to 5 years. Loan Amounts: $1MM to $20MM forced or orderly liquidation value, 60% to 90% advance depending on the industry (i.e. out in an oilfield/coal mine is 60%, rolling stock 75% to 80%, manufacturing/bolted to the ground 80% to 90%). We are an auctioneer, so we are basing our loan approval on the secondary market, the demand and the liquidation value. We will not decline for credit score, financials, revenue, cash flow, etc. If there is a demand for the M&E, we will fund the company. Return Profiles: Prime + 5 to 10%, 4 points at close with 2 points going to the broker, appraisal/due diligence, and legal due when term sheet is signed. 4 weeks to fund from signed term sheet. Industry Preferences: We are industry agnostic except we do not work in aviation, rail, marine, farm, or with IT. We do not lend against equipment made in China or proprietary equipment invented by that company. Additionally, we provide auction, liquidation, and appraisal services. We pay 10% of the gross margin for these referrals. For financing, we pay 2% of the loan amount. No broker agreements, it is written on the term sheet and closing statement. And what do your days consist of? The majority of my day is spent connecting with referral sources. I am also tasked with the initial review process of an applicant and presenting of the term sheet. What are your goals for this year? Growing our loan portfolio, facilitating auctions, appraisals, and liquidations Biggest challenges right now? We are extremely busy so it is imperative that our referral sources are familiar with our products and when we will be a good fit for the client. What types of things keep you motivated? I am self-motivated and I enjoy the sales cycle, every day comes with new momentum. Now it's time for the lightning round! What's your largest deal in your career? $18MM Do networking events help you? Absolutely, people buy from people. Do you use generative AI? Never Will you ride in a driverless car? Maybe down the block, I love to be in control, so I won’t last long in this environment. What is your favorite country you have visited? South Africa If you could go anywhere, where would it be? Australia Should there be laws for politicians prohibiting insider trading? 10000% Do you prefer Bitcoin or gold? Neither Last question. Regarding the commercial finance industry, which is a large umbrella of lending products, what if anything would you change? I would change one thing, it would be to implement a national credit database to track business owners' loan activity, collateral, credit scores, financials, tax returns etc. Similar to what is done on the consumer side. What's the best way for folks to get a hold of you? Carolyn McClure​​​​ VP of Business Development ​773-496-5712 (Direct/Mobile/Text)​ carolynm@loebequipment.com ​loebequipment.com

eBay, the global e-commerce giant, has taken a significant step to support its seller community by launching a new financing product called Business Cash Advance, according to a press release on July 10th. This innovative offering, developed in partnership with Liberis, a leading embedded finance platform, aims to provide U.S. eBay sellers with quick and flexible access to working capital Key features include: • Funding up to $1 million available in as little as 24 hours • Streamlined, 100% online application process • Flexible payment schedules aligned with sales cycles • No minimum payments or early payment penalties • Transparent reporting through eBay Seller Hub The program addresses common challenges faced by small businesses in securing financing, offering: • Pre-approved funding from $500 to $1 million • Rapid fund transfer, typically within 12-24 hours • Personalized application experience Avritti Khandurie Mittal, VP at eBay, emphasized the company's commitment to fueling seller growth through tailored financing solutions. Rob Straathof, CEO of Liberis, highlighted their focus on providing fast and responsible financing to empower eBay sellers. This initiative reflects eBay's dedication to supporting its global seller community across 190 markets, and they already have term loans through Funding Circle, potentially stimulating growth in the broader e-commerce ecosystem by removing financial barriers for small and medium-sized businesses. Read the full Press Release here.

An article published today by the Boston Business Journal revealed the strategic partnership between Forward Financing and the Initiative for a Competitive Inner City (ICIC). This collaboration aims to bridge the capital-access gap for underserved small businesses, creating a synergy between immediate financial support and long-term business education. It is an issue that I frankly think more can be done and is not discussed enough. The partnership was born from a meeting between Justin Bakes, co-founder and CEO of Forward Financing, and Steve Grossman, CEO of ICIC. Both leaders recognized a shared mission: to support and uplift businesses that are often overlooked by traditional financial institutions. As Jessica Roden, Senior Director of Marketing and Strategic Planning at Forward Financing, aptly put it, “Our mission is all about saying 'yes' when others are saying 'no,' and trying to help these underserved businesses.” Forward Financing, a Boston-based fintech company, specializes in revenue-based financing, a model that offers capital to businesses in exchange for a percentage of their ongoing gross revenue. This innovative approach is particularly beneficial for small businesses that struggle with credit constraints or other barriers to traditional financing. With a workforce of over 400 employees globally, Forward Financing has positioned itself as a key player in the financial technology sector, dedicated to supporting small businesses. ICIC, headquartered in Roxbury’s Nubian Square, is renowned for its efforts to accelerate small-business growth in under-resourced communities. Through technical assistance and research, ICIC served over 3,000 businesses in 2023, most of which were BIPOC- and women-owned. This commitment to fostering inclusive economic growth is at the heart of ICIC’s mission. The partnership between Forward Financing and ICIC is transformative, offering Forward Financing’s customers access to ICIC’s tuition-free educational programs. Notable among these are "Building for Growth," a national, virtual executive education program designed for BIPOC- and women-owned construction firms, and the "Inner City Capital Connections" (ICCC) program, a flexible “mini-MBA” executive leadership training. These programs aim to help small-business owners develop sustainable growth strategies and build long-term resilience. One of the standout features of this collaboration is the holistic support provided to small businesses. Forward Financing’s customers not only receive immediate financial assistance but also gain access to a network of mentors and peers. This community support, combined with practical business education, equips entrepreneurs with the knowledge and tools needed for enduring success. Participants in the educational programs also benefit from financial incentives, such as a $1,000 reduction on their current balance or next round of funding with Forward Financing. In 2023, 80 Forward Financing customers applied for ICIC’s programs, with over 30 actively participating. As the partnership enters its second year, both organizations are eager to increase participation and further their positive impact on underserved communities. The partnership between Forward Financing and ICIC, as detailed in the Boston Business Journal, is a powerful example of collaborative efforts to close the capital-access gap. By providing both financial support and educational resources, these organizations are empowering underserved small businesses to achieve sustainable growth and success. As they continue to work together, their efforts will contribute significantly to the vitality and resilience of underserved communities across the nation.

We normally send out The Funding Curve each Thursday but since that is July 4th this week we decided to send it out Wednesday and also to publish it on our Blog. We hope you have a happy and safe July 4th! There were some interesting stories in the past week that you should be aware of and that's why we bring you this newsletter. Hope you enjoy it! Don't forget to share it with like-minded individuals. Recent Top Stories Stay up-to-date with the latest news and trends Samson MCA sues Boston Market and wins Boston Market has collapsed in a wave of lawsuits and other legal filings over unpaid bills. The fast-casual chain has thus far avoided bankruptcy court, and its structure is a complex tangle of LLCs around the country, many with different listed owners. That has left creditors effectively fighting over whatever assets they can find. North Avenue Capital starts SBA 7a lending For nearly a decade, NAC has exclusively served rural American businesses providing tailored financing options through the USDA Rural Development Loan Programs. Johanna Garcia ready to change plea in $200M MJ Capital fraud case See below in the Blog. Plaid growing its enterprise business Plaid got its start as a company that connects consumer bank accounts to financial applications but has since been gradually expanding its offerings to also include lending, identity verification, credit reporting, anti-fraud and payments. US filings for jobless claims inch up modestly The number of Americans filing for unemployment benefits inched up last week and remain historically low, however, the total number of people collecting jobless benefits continues to grow. Our Latest Blogs Johanna Garcia ready to change plea in $200M MJ Capital fraud case The MJ Capital saga is winding its way through the court system with the latest updates from Johanna Garcia's case in late June being a Notice of Change of Plea hearing scheduled for July 9th. Stay tuned for coverage of the hearing including on our Instagram: @funderintel Industry Stocks to Watch These are prices from July 3rd before the market opened. Small Business Stats Source: Bluevine BOSS Report Bluevine surveyed over 1,100 small businesses nationwide - with annual revenue between $100,000 and $5 million More SMBs will seek access to capital this year (45%) compared to 2023 (38%). Of those seeking access to capital in the year ahead, 55% are looking for a new credit card and 55% are seeking a new lender.

The Kansas Legislature has passed a new commercial financing bill, the Commercial Financing Disclosure Act (SB 245/ SB 345). This legislation aims to increase transparency in commercial financing transactions for Kansas businesses. It was supported by the Revenue Based Finance Coalition (RBFC). The bill passed the House today with a vote of 115-8. Of the 8 'Nay' votes, 6 were Republican and 2 Democrats. It now awaits Governor Laura Kelly's signature. Key Points of the Kansas Commercial Financing Disclosure Act Requires lenders to disclose certain information about commercial financing products, including the total cost of capital Mandates registration with the state bank commissioner for entities offering commercial financing Grants regulatory authority to the commissioner to oversee compliance Empower the Attorney General to enforce the provisions of the Act "Violations would be punishable by a civil penalty of $500 per violation, but not to exceed $20,000 for all aggregated violations. If a person violates the Act after receiving written notice of a prior violation from the Attorney General, the new violation would be punishable by a civil penalty of $1,000 per violation, but not to exceed $50,000 for all aggregated violations." Following a National Trend This legislation aligns with the trend of commercial finance disclosure laws across the United States. Many states are enacting laws aimed at increasing transparency and protecting businesses in commercial financing transactions. Next Steps With passage by both chambers, the bill now goes to Governor Kelly to be signed into law.

Get ready to dive deep into the world of revenue-based financing (RBF), the financing product fueling small businesses, with none other than Andrew Mallinger, COO of PIRS Capital, on our exclusive live podcast! Mark your calendars for February 8th, 1 PM EST, and join us on Zoom as we unlock the secrets to the revenue based financing industry. Andrew, a veteran in the small business and financial services space since 2010, has spearheaded the remarkable transformation of PIRS Capital. Reimagined in 2015, PIRS has skyrocketed to become one of the top funders by volume in the RBF industry - a testament to Andrew's visionary leadership and expertise. In this power-packed session, we'll unravel the magic of RBF and its crucial role in propelling SMB success and boosting the overall economy. Brace yourself for insights like: Why RBF is shaking up the traditional financing landscape Andrew's 2024 outlook for the RBF industry: What trends will dominate? What challenges and opportunities lie ahead? Unlocking the keys to success in the RBF world: Learn the secrets to crafting the perfect pitch, maximizing funding potential, and navigating the RBF landscape with confidence. Live Q&A: Get your burning questions answered directly by Andrew! Whether you're just starting your RBF journey or a seasoned pro seeking advanced strategies, here is your opportunity to ask some questions. This is your chance to gain actionable insights, insider knowledge, and expert guidance from an industry veteran. Ready to secure your spot for this knowledge explosion? Sign up for the podcast now! P.S. Click HERE to learn more about PIRS Capital.

For many years there have been talks, efforts, and even some limited access blacklists for commercial finance brokers. The efforts stem from the poor business practices, scam artists, and criminals working in the commercial finance industry albeit a small portion of the stakeholders. New laws have been passed and proposed all across the country with more to follow as a result of some of the business practices. Some of the laws require business loan brokers to register with the state, Virginia being one of them. A registration though as it's designed currently doesn't provide anything except basic contact information about that broker company. This is where a blacklist comes in. So how would a blacklist be constructed and would it even be useful? Would there be one blacklist for all the commercial finance related companies or only for specific segments like brokers? Current Options There are no legitimate, accessible blacklists for commercial loan brokers that I am aware of nor a website that houses a blacklist or similar functionality. There may be a behind-the-scenes list that people pass around to influence decisions but that doesn’t seem like a legitimate way of doing things. The BBB is almost irrelevant. Review sites like Trustpilot are rarely referenced when researching new partners and they don't have many of the features that I feel are necessary. There are dozens of platforms online where anyone can write about bad players in any industry, Reddit being the largest forum. I recently come across a Whatsapp Group that was an MCA Blacklist group, created to report all of the scammers in the MCA( aka revenue based finance) industry specifically. I decided to join to see what the group would be like although I was very skeptical. In short, it was nonsense. The owner of the Group did not identify himself after being asked several times which was the first red flag. It didn't seem like he had much experience. With over 150 people in it after a few days, no reports of any sort of scams. It was mostly promoting funding companies, lead services, or other chatter that was worthless. Surprised? I certainly wasn't. This type of group would only be for the lowest common denominator of people who find entertainment in that environment. Plenty of people sit back and read without participating like myself but there was no real value. No living history could be counted on cause it could be deleted at a moment's notice. So after some back and forth with the creator of this group where he didn’t abide by his own rules, deleted messages of some, played arbiter of comments, and even threatened people, I moved on. It was worthless and just another group. Questions to be answered Many commercial loan brokers and other stakeholders who are in online forums operate with fake names and are willing to change company names as quickly as needed to escape damage done to their online presence. This creates a problem. For a blacklist to work you would need real names to be effective. That is one of many challenges to be solved. Here are others: How would this all work? Who would be the owner and manage the list? A third party who is not a broker or funder? Would it be a website where users generate the content? Would the real names of the users who report complaints be verified? How would the blacklist be accessible? As a publisher, they could be protected by Section 230 but still could be sued in an attempt to force real names to be revealed. Lawsuits with that intention may not be successful but there are real costs involved. These questions and many others have to be answered to build anything worthwhile. In the past people who tried a blacklist were unqualified or they did not execute in a way that would constitute a legitimate blacklist. Funder Intel started with something along the lines of a blacklist with ratings and reviews, good or bad, from user-generated content but decided for several reasons, including some of the above, to do away with all of those features and pivoted to the commercial finance resource, education, and media platform we are now. Key things needed Credibility of the owner of the list/website Transparency Relevancy of use. For example, if I see someone on the blacklist do I cancel their ISO agreement? Resolving complaints of anyone that is mentioned in the blacklist Manipulation of the blacklist Liability of the owner of the blacklist. Is this an actual business? Because it takes money to operate and conflicts of interest can develop when money is at stake. Some see a blacklist for brokers could be similar to Data Merch, the company that provides a database of merchants who have either defaulted on their MCAs or have had some other problems like fraud reported in their history. I won't go into length about Data Merch as that could be a whole other topic. Sure their data is useful but do funders trust it 100%? It has been said that there is manipulation by users of Data Merch who would report a default just so the client is listed on Data Merch and others would NOT fund them. I can't verify if that is true but I am pointing out potential issues with a blacklist. Have there been any legal challenges to Data Merch from merchants? If a merchant was listed on there incorrectly and they found out it not only prevented them from getting funding but there was slander or defamation then there could be a lawsuit. This ties into what the responsibility of a commercial finance broker blacklist would have to deal with. If a broker was listed on it and they felt it was incorrect, they could challenge that in court. Who has the backing to defend themselves on that level? With all of that said, would any of this have a lasting impact on your business? It could. There are thousands of stakeholders and it's best to know as much as possible about anyone you would potentially work with when hundreds of thousands if not millions of dollars are at risk. For now, you will have to scour the web and see what you can find.

In a strategic shift that was anticipated, Funding Circle US announced in a press release today that it has agreed to sell its entire United States small business lending operation. The buyer? They happen to be a company that was started in the same office I was in when working for Knight Capital Funding from 2014-2016. That company is iBusiness Funding, now a division of Ready Capital Corporation (NYSE: RC). The owner of Knight started iBusiness Funding, LLC in 2015 and operated from that same Miami Beach office until they moved to Fort Lauderdale. After that, iBusiness Funding and Knight Capital were acquired by Ready Capital in 2019. Just a few days ago, iBusiness Funding put out a press release announcing their new signage on a building in downtown Fort Lauderdale that they say is the largest in the city, plus some other announcements. The transaction, valued at £33 million in cash, is expected to close by the end of June, subject to standard closing conditions. This news comes just months after Funding Circle CEO Lisa Jacobs declared the company's intention to streamline operations by exiting the US market and focusing on achieving profitability within its UK business. The sale of the US division aligns with this plan, allowing Funding Circle to fully dedicate resources to the UK market, where they anticipate reaching profitability in the second half of 2024. For iBusiness Funding, the acquisition presents a significant growth opportunity. By absorbing Funding Circle's US business, including its loan portfolios, iBusiness gains a wider customer base and strengthens its position as a leading provider of SBA small business loans, particularly for loans under $500,000. Its flagship product, LenderAI, features end-to-end SBA lending functionality from origination through servicing. Both companies highlight a shared commitment to supporting underserved borrowers, with iBusiness CEO Justin Levy expressing his enthusiasm for welcoming the "exceptional FC USA team" to the iBusiness family. It remains to be seen how Funding Circle's UK operations will perform post-divestiture, but the company projects strong growth with a net income increase of 15-20% CAGR and profitability margins exceeding 15% over the medium term.

Fintech Nexus, initially established as LendIt in 2013, has announced its shutdown after a decade of significant influence in the fintech landscape, according to an announcement from its founders. Originating as a platform for small gatherings, it quickly expanded to host 31 major global events. This impressive growth was curtailed by financial challenges after the pandemic which caused them to take on additional financing — both debt and equity, leading to the sale of its event operations in 2023 to Fintech Meetup. They tried to make a successful digital media business without the events but ultimately it didn't work. The closure of Fintech Nexus marks the end of an era for many in the fintech industry who have relied on their insights and coverage. Over the years, the platform has been a go-to source for the latest trends, news, and analysis in areas such as banking, crypto, Web3, and more. Despite the closure, the legacy of Fintech Nexus lives on through the 'Fintech One-on-One' podcast, continuing to offer valuable insights into the fintech industry. For more details, you can read the full article here.

In this video, I catch up with James Jones, CEO of Entre Funding and Bizzlyelite, who found our site after attending the course offered by Commercial Capital Training Group (CCTG) owned by Kris Roglieri. As we have covered on our blog, Kris Roglieri is now in jail being held without bond for fraud charges brought by the FBI. We find out what James is up to in his business, what he felt when he heard about the Roglieri situation, and what can be gleaned from it all since it is not a good look on the industry. Contact: James Jones 909-310-5458 bizzlyelite.com james@entrefunding.com

There you are working on financing a multimillion-dollar real estate project that is your career dream when a lender appears to have the answers for your project's financial needs. You put a deposit down, as agreed, that will be held in an Interest Credit Account to get the Line of Credit that you are promised. However, once you send millions as a deposit to the lender you wait weeks for the funds. They never arrive. This is what happened to many when dealing with Kris Roglieri, Prime Capital Ventures and Berone Capital Fund, according to a 117-page complaint that alleges fraud in not delivering on the lines of credit nor returning the deposits each client gave to Prime. These deposits totaled over 60 million dollars. Just a day after the complaint was filed on Feb 1st, the FBI raided the home of Kris Roglieri, owner of Prime Capital Ventures, and his business partner Kimmy Humphrey, stemming from a lawsuit that accuses them and several other entities, including Commercial Capital Training Group (CCTG), National Association of Commercial Loan Brokers (NACLB), Prime Commercial Lending, the Finance Marketing Group, and Berone Capital Fund LP, of fraud, among other allegations. This is shocking news to those like myself, who have met Kris Roglieri, gone to his NACLB events, seen him online in several videos for CCTG, and have only had positive experiences with him. The ramifications are significant. Certainly, we will let it all play out in court, however the evidence is damming. The other company involved is Berone Capital Fund LP, a hedge fund based in Atlanta, Georgia. The two members listed for that company are Jeremiah Beguesse and Fabian Stone. In 2022, they started doing deals as Prime Capital Ventures. The lawsuits for not fulfilling the LOC obligations started in 2023. They piled up quickly. The case that got a bankruptcy proceeding going against Prime was brought by COMPASS-CHARLOTTE 1031, LLC, and two other plaintiffs. Prime was forced into bankruptcy as a result. Once the case made its way through the court system a judge appointed Paul A. Levine, of Lemery Greisler LLC, as Receiver of Prime Capital Ventures, LLC and Berone Capital. I read through the 117-page complaint so you don’t have to. The following are the key findings. Key points Prime Capital Ventures, formed in Delaware, set up a fund to offer financing in Lines of Credit to companies for real estate projects. They were to supply the LOC to the borrowers once deposits were received. They never did, happening on multiple occasions starting in 2022. The other defendant hedge fund Berone Capital Fund, LP. Prime and Berone entered in to a joint venture on August 16, 2022, whereby Berone was the Managing Member and Prime the so-called “PC Member". Berones members are Jeremiah Beguesse and Fabian Stone. Prime and Roglieri were sued for the return of deposits. There was non-communication and subsequent legal action was taken. Prime is blaming Berone. However, according to documents, Prime has not produced any records between Prime Capital and Berone to corroborate such a statement. If it was Berone ripping Prime off since early 2023, then why did it continue after the first issue? That doesn’t make sense without Prime knowing something is going on. “At least nine would-be borrowers in 2022 or last year made multimillion-dollar deposits but never received loans nor received their deposits back”. Forced bankruptcy in December by lawsuits of three of the plaintiffs. The Bankruptcy Trustee determined that bank statements submitted to him by Prime were fraudulently created. Money from most of the original bank accounts money was deposited in to should have stayed in those accounts until the completion of the line of credit, however, millions were transferred to accounts for Kris Roglieri and his entities. Not much has been found. The total missing is over 90 million dollars (updated). The Receiver has checked bank accounts for Berone with little luck. Money was tracked to have been spent on luxury cars, jewelry, a house, and private jet trips. Among the purchases by Kris Roglieri: a 2.2 million dollar Richard Mille Tourbillon Skull timepiece(see below) a rare Maserati MC12 Paid Cash for a $3.75 million house No criminal charges filed yet, but with this FBI raid and Kris’ lawyer telling everyone Kris is getting criminal defense counsel, charges are likely. The raid was in part likely to confiscate assets that could be sold by the defendants and thus remove the possibility of some of the deposits being returned to their rightful owners. The house that Kimmy Humphrey was living in was owned by Kris Roglieris company, who paid $3.75 million cash in Jan 2023, as detailed in the evidence. Among the entities owned by Kris Roglieri is one called FUPME, which is an acronym for 'F!$K You Pay Me', which now seems very ironic given that he is being forced to pay others he is accused of defrauding. The company that uses that name FUPME makes merch including stickers that he puts on his cars (as shown below). Kris Roglieri's Instagram account called @teamloansharks is also profiled on other YouTube channels showing off his car collection, which was entered in as evidence. From the complaint $2.2 million watch There is so much to cover and new information will be brought out soon. Here are links to several sources: https://www.timesunion.com/business/article/lawyer-fbi-raids-home-ceo-albany-lender-kris-18662632.php https://uspto.report/TM/90612775 Roglieri Unveils Prime Capital Ventures, Prime Commercial Lending’s Newest Fund — DealMaker Magazine (dealmaker-magazine.com) $52M Missing in Commercial Lender’s Involuntary Bankruptcy (therealdeal.com) Trustee in Prime Capital Ventures involuntary bankruptcy case 'can't find' $52M - Albany Business Review (bizjournals.com) Prime Capital Ventures accused of fraud, creditors push for involuntary bankruptcy - Albany Business Review (bizjournals.com)