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The world of small business lending is fraught with challenges, and fraud is among the most pressing. With the rise of Merchant Cash Advance (MCA) funding, the industry continuously tries to prevent attempts by unscrupulous individuals to exploit the system. MCA funders have always been on high alert, and the actions of six defendants in a case that has now secured guilty pleas underscore the importance of their vigilance. It's worth noting that while the press release from the DOJ about the recent guilty pleas did not specify the name of the merchant cash advance funder involved, a review of court records identified the company as Caymus Funding, Inc. According to the press release, the most recent defendant to plead guilty in this case is Ryan P. Mullen, a 42-year-old resident of Jayess, Mississippi, who admitted his guilt in a conspiracy to commit wire fraud and money laundering. The proceedings took place in the Eastern District of Louisiana before U.S. District Judge Jane Triche-Milazzo, as announced by U.S. Attorney Duane A. Evans. The intricate plot involved Ryan P. Mullen conspiring with Duane Dufrene, Dillon Arceneaux, Lance Vallo, Grant Menard, and Zeb Sartin. They used multiple shell corporations based in Louisiana, which had no assets, to deceive Georgia-based Caymus Funding, Inc. Mullen and Dufrene played pivotal roles in setting up Arceneaux, Vallo, Menard, and Sartin as the proprietors of these shell corporations. They then fabricated vendor accounts for these corporations and, with the assistance of another accomplice, produced counterfeit bank records. Posing under an alias, Mullen portrayed himself as a broker for these very shell corporations he had a hand in creating. The scheme reached its climax when Mullen, with the help of another broker, presented the falsified vendor accounts and bank records to Caymus Funding, Inc. to secure funding. The company, deceived by the fraudulent documents, wired millions of dollars in advances to Arceneaux, Vallo, Menard, and Sartin. A portion of these funds was then laundered back to Mullen and Dufrene. The businesses, which were non-existent from the start, were then shut down, leaving Caymus Funding, Inc. with a staggering loss of approximately $6.4 million. Arceneaux and Sartin have already pleaded guilty and will be sentenced on November 1, 2023. The sentencing for Dufrene is scheduled for January 17, 2024. They face potential imprisonment for up to five years on the wire fraud conspiracy charge and up to twenty years for the money laundering conspiracy. Fines could amount to $250,000 and $500,000 for the wire fraud and money laundering counts, respectively. So when funders ask merchants for more information such as documents, to link their bank account, to get a site inspection, whether their broker coached them on anything, or anything else, this case is a shining example of why.

In the ever-evolving landscape of commercial finance, asset-based lending (ABL) has emerged as a resilient and adaptive financing solution. Historically, ABL has been a go-to option for businesses in need of working capital, especially those with tangible assets. However, the modern era, marked by rapid technological advancements and the rise of fintech, has breathed new life into this age-old financing method. The resurgence of ABL can be attributed to several factors. For one, the global economic landscape has been punctuated by periods of uncertainty, from trade tensions to global pandemics. In such times, traditional lending criteria can become stringent, making it challenging for businesses to secure loans. ABL, with its focus on assets rather than creditworthiness, offers an alternative pathway. According to a recent report by Allied Market Research, the global asset-based lending market was valued at a staggering $561.5 billion in 2021. This figure is projected to soar to $1,721.38 billion by 2031, indicating a Compound Annual Growth Rate (CAGR) of 12.2%. Such growth is not just a testament to the effectiveness of ABL but also the trust businesses place in it. The advantages of ABL are manifold. Firstly, it provides businesses with the liquidity they need without delving deep into their credit histories. This is especially beneficial for startups or companies that have faced financial hiccups in the past. Secondly, ABL offers flexibility. The loan amount is directly tied to the value of the assets, allowing businesses to borrow more as their assets grow. Enter fintech. The fusion of finance and technology has revolutionized many sectors, and commercial finance is no exception. Fintech solutions have streamlined the ABL process, making it faster and more efficient. Automated asset valuations, real-time monitoring, and predictive analytics ensure that lenders have an accurate picture of the borrower's assets, reducing risks and enhancing trust. Furthermore, fintech platforms offer a seamless borrowing experience. Gone are the days of tedious paperwork and long waiting periods. Modern ABL platforms provide instant approvals, transparent terms, and easy access to funds, all at the click of a button. The U.S. business landscape further underscores the potential of ABL. With 99.9% of businesses in the U.S. being classified as small businesses, according to Forbes, the need for flexible financing solutions is evident. ABL, with its asset-centric approach, fits the bill perfectly. However, like all financial instruments, ABL is not without its challenges. Interest rates and fees, for instance, can vary. While some lenders offer competitive rates, others might charge a premium, especially if they perceive the loan to be high-risk. It's crucial for businesses to shop around, compare terms, and leverage fintech platforms that provide real-time rate comparisons. In conclusion, asset-based lending, backed by the power of fintech, is poised to play a pivotal role in the future of commercial finance. As businesses navigate the complexities of the modern economy, ABL offers a beacon of hope, ensuring that assets, whether tangible or intangible, are not just dormant entities but active contributors to financial growth.

It was worth the trip from South Florida! The amount of value I got beat all expectations. I was able to catch up with friends, to meet longtime clients in person, and form potentially new partnerships, which was very much worth it in the end. Leads, sales, marketing The panel I was fortunate enough to participate in had many different perspectives and tools to help brokers improve their lead generation. How to generate more leads is the question that usually comes up when speaking with brokers at some point and there is more than one way to be successful. From my perspective the ones with consistent efforts in what they are best at but also think outside the box a certain percentage of the time will do very well in the long run. Well received first Brokers Expo The event was done very well, from the venue to the speakers, vendors area, and cocktail reception, I thought the Funders Forum and RBFC team did a wonderful job. More people getting into the industry daily I spoke to several people that are fairly new to the industry. Even had one of my broker course graduates come all the way from Las Vegas! still many veterans around but it's good to get new blood into the alternative business lending industry. Technology solutions galore Everywhere you look there is a technology company that is helping solve problems for brokers and funders OR brokers and funders adding technology to their services. Generative AI was of course a hot topic where there is now almost an overload of options. Some people don’t know exactly what they should focus on using so they may even stand back for a while until things shake out for winners that take hold in that sector. I think that might be a mistake as you don't want to fall too far behind. So until the next one, thank you to the Brokers Expo and RBFC for putting on a great event! If you aren't aware of their events, look into the next one which is the Funders Forum + Broker Expo, on March 5-7th, 2024 at the Hard Rock Hotel and Casino in Hollywood, Florida. Here are just a few pics from the Expo (For the full Photo Gallery click here. )

In the alternative business finance arena, the old adage "time is money" holds a sacred truth. Every moment spent in deliberation or awaiting approval is a moment of lost opportunity. The fintech domain, backed by Artificial Intelligence (AI), is spearheading a financial renaissance, sculpting a future where funding solutions are swift, precise, and equitable. This metamorphosis is not just a boon for business owners but a paradigm shift for industry stakeholders. Let's delve into how AI is redefining the contours of business lending. Predictive Proficiency: The Clairvoyant Lending Lens For industry stakeholders, the ability to accurately predict credit risk is the cornerstone of prudent lending. The advent of AI has transformed this cornerstone into a keystone, with predictive analytics offering a clairvoyant lens into borrower credibility. Tools such as FICO’s Falcon employ machine learning to distill a more nuanced understanding of risk, thereby refining credit decisioning. Speedy Sanctions: The Express Lane to Loan Approvals In the fast-paced realm of fintech, speed is the essence. Gone are the days when loan approvals were a test of patience. With AI's automated data analytics, the express lane to loan approvals is now open, reducing the time from weeks to hours, if not minutes. This agility not only propels business growth but elevates the lending practice to a realm of efficiency. Fairness in Finance: Bridging the Bias Gap The human element in lending, albeit essential, sometimes carries the baggage of unconscious bias. AI, when programmed with an equity lens, serves as an impartial adjudicator, assessing loan applications based solely on data. This fairness fortifies the foundation of trust between lenders and borrowers, fostering a more inclusive financial ecosystem. With that said, there may still be ways to have bias in systems so they should be carefully built. Lending Software Luminary: The Dawn of Digital Decisioning The fintech landscape is aglow with innovative lending software, platforms like Paypal and OnDeck being the luminaries. These digital arenas, driven by machine learning, are not just streamlining the loan process but are setting a new gold standard in digital decisioning. Their user-centric interfaces and real-time analytics are crafting a seamless journey for both lenders and borrowers. Embarking on the AI-Infused Journey: The Road Ahead For stakeholders in the alternative business finance sector, embracing the AI-infused journey is not a mere trend, but a trajectory toward transcendent transactional experiences. The understanding and adoption of AI tools and practices are paving the road to a more robust, responsive, and resilient financial framework. Engage with the Epoch: Your Invitation to the Future As we stand on the cusp of this financial epoch, the promise of a more streamlined, equitable, and efficient lending process is not just an aspiration but a tangible reality. Industry stakeholders should explore the myriad of possibilities AI heralds, and step into a future where the symbiotic synergy of fintech and AI propels the alternative business finance sector into a new era of excellence.

In the commercial finance ecosystem, specialty finance companies have emerged as crucial pillars, particularly for small and medium-sized businesses (SMBs), navigating through the economic tides with strategic financial activities. While CFG Merchant Solutions, Fora Financial, ClearCo, FundFi, and Lighter Capital are examples within this sector, their financial activities provide insights into the specialty finance (Revenue Based financing) market's health and trajectory. Fora Financial, known for its flexible financing solutions for SMBs, recently closed a $130 million revolving credit facility and a $10 million investment-grade rated corporate note, despite the prevailing challenges in the capital markets. This strategic move not only solidifies its capital base but also enhances its ability to support the SMB community amidst the unpredictable economic cycle. Lighter Capital, another pivotal player in the specialty finance sector, has also made significant strides, securing a $130 million credit facility to further its mission of providing non-dilutive, revenue-based financing to technology startups, particularly in the SaaS, technology services, subscription services, and digital media sectors. The firm, which has provided hundreds of millions of dollars in financing via more than 1,100 rounds of growth capital without startups having to sell equity, designed its financing model to offer adaptable payment terms, term financing featuring fixed monthly payments, and contract financing. Melissa Widner, CEO of Lighter Capital, emphasized the importance of alternative financing, especially considering that venture capital firms fund a small percentage of technology companies. Widner noted, “One of the biggest challenges has been just educating companies that there is an alternative to dilutive financing.” Lighter Capital’s new financing vehicle is expected to fund hundreds of early-stage companies across the U.S., Canada, and Australia, providing financing from $50,000 to $4 million with an average financing of $600,000. While Fora Financial and FundFi have recently bolstered their financial positions, CFG Merchant Solutions secured a significant capital raise earlier this year, showcasing a sustained momentum in the sector. These financial activities extend beyond their individual market positions, signifying a broader narrative of resilience and adaptability, ensuring that SMBs have the financial support to navigate through various business phases and challenges. The specialty finance market has evolved into a vital partner for SMBs, providing them with the financial lifelines required to navigate through operational and expansion-related challenges. This, in turn, fosters a culture of innovation and sustainable business practices, ensuring that the economic ecosystem, particularly in the realm of SMBs, remains vibrant and robust. The impact of the specialty finance sector is far-reaching, stimulating economic activity through enhanced spending, production, and service provision, while also fostering job creation and innovation among SMBs. This propels the economic wheel forward, ensuring stability, growth, and prosperity even amidst economic uncertainties. As these specialty finance companies continue to navigate through economic challenges, their strategic financial activities are symbolic of a steadfast commitment to nurturing and sustaining the entrepreneurial spirit within the SMB community. Thus, ensuring that the economic ecosystem remains vibrant and robust, now and in the future.

The time is almost here. The Brokers Expo being held in New York City is coming up on October 10th. Tickets are almost out, so if you haven't already registered then do so now and join many industry members at this exclusive gathering in the heart of Manhattan’s Financial District. This event is designed for brokers with an agenda that is complete with experts and topics that should have an immediate impact on your business. There will be exhibitors and networking throughout the day with a reception to follow. I'm excited to join the Marketing and Sales panel that is in the afternoon, so don't miss it! But in all seriousness, thank you to the Funders Forum & Brokers Expo team for inviting me and for all they are doing for the industry. It will be great to see everyone!

MIAMI – Last Friday, on the 25th, the legal proceedings surrounding the alleged Ponzi scheme of MJ Capital Funding, LLC, took a decisive turn. Johanna Michely Garcia, the company's former CEO, was formally indicted on charges of wire fraud, mail fraud, and money laundering, bringing to the forefront a case that has been in the public eye for over a year. While the initial shock of the scandal has long since subsided, the indictment serves as a sobering reminder of the challenges facing the merchant cash advance (MCA) sector. MJ Capital Funding, once a trusted name for small and medium-sized businesses seeking short-term financing, is now emblematic of the need for reform within the industry beyond the recent commercial financing disclosure laws that were signed by the governor. The indictment details allegations that from October 2020 to August 2021, Garcia, alongside Pavel Ramon Ruiz Hernandez and others, misled investors with promises of funding MJ Capital's MCAs. They are also accused of enticing new recruits with attractive commissions to further their scheme. Ruiz Hernandez has already pleaded guilty and awaits his sentencing, while Garcia's legal battle is set to continue with a court appearance on August 28, 2023. If convicted, she could face up to 20 years in prison for each count. The collaborative efforts of U.S. Attorney Markenzy Lapointe, Special Agent Jeffrey B. Veltri, the U.S Securities and Exchange Commission, and Florida’s Office of Financial Regulation underscore the gravity of the situation and the broader implications for the MCA industry. While the news about MJ Capital Funding no longer shocks the MCA community, it does emphasize the pressing need for introspection and action. Stakeholders across the board, from investors to MCA providers, must rally together to champion transparency, ethical conduct, and robust due diligence processes. The goal? To ensure that the actions of a few do not cast a shadow over an industry that has the potential to empower countless businesses. The MJ Capital Funding case is more than just a legal proceeding; it's a clarion call. As the industry moves forward, it must prioritize trust and integrity, ensuring that such incidents become a thing of the past and that businesses can rely on MCAs with confidence.

On September 6, 2023, OnDeck Canada (ODC), a leading online lender to small businesses, announced a significant revamp of its Line of Credit (LOC) product, aiming to provide unparalleled flexibility to its clientele. This move comes at a time when the misrepresentation of business loans as lines of credit is prevalent, not only in Canada but also in the US. The revamping of ODC's LOC product incorporates features such as fixed or variable repayment programs, instant fundings via Interac e-Transfer, and a novel Dual Financing feature. This initiative by ODC is a testament to the existing market demand for genuine, flexible financial solutions, especially Business Line of Credit (BLOC) products. However, the path to offering BLOCs is laden with challenges, particularly for fintech companies. One primary deterrent has been the cost of capital. The nature of BLOCs, which allow borrowers to draw, repay, and redraw funds as needed, can be capital-intensive for lenders. While this revolving credit facility is attractive to businesses, it poses a risk to lenders due to the uncertainty of returns and the need for substantial capital reserves. Furthermore, the margins from BLOCs are often narrower compared to other business loan products. The competitive pricing necessary to attract customers to BLOCs squeezes the profitability for the lender, making other types of business loans more financially appealing to offer. Additionally, the origination process of BLOCs presents its own set of hurdles. Many lenders rely on brokers to source deals, which can lead to increased origination costs and potential misalignment of interests. On the flip side, direct marketing to potential customers necessitates a hefty upfront investment in marketing and customer acquisition, creating a significant barrier to entry, particularly for fintech startups or smaller entities. Despite the clear demand for authentic BLOC products, these challenges have deterred some fintech companies from entering the market or offering BLOCs as Bluevine did years ago. However, the market dynamics are gradually changing. The bold step taken by ODC in Canada exemplifies a viable pathway to offering genuine BLOCs while addressing the prevailing market misrepresentation issue. This initiative also illuminates the potential awaiting new entrants in the US market willing to navigate through the challenges associated with offering BLOCs. The US market holds a lucrative opportunity for fintech companies that can strategically tackle the cost of capital, margin, and origination challenges. By leveraging technological advancements, optimizing operational efficiencies, and devising innovative marketing strategies, new entrants can significantly mitigate these challenges. Furthermore, adhering to regulatory compliance and educating potential customers on the true essence and advantages of a BLOC over term loans or revenue based financing could significantly differentiate new entrants, fostering a transparent and trustworthy commercial lending environment. In conclusion, the evolution of ODC's LOC product in Canada serves as a beacon of opportunity amidst challenges for fintech entities in the US. As the demand for genuine, flexible, and transparent BLOC products continues to burgeon, the time is ripe for innovative fintech companies to step in, overcome the hurdles, and seize the market opportunity to not only thrive but also contribute towards a more transparent and reliable commercial lending ecosystem in the US. https://www.ondeck.ca/press-releases/ondeck-canada-unveils-true-line-of-credit-with-real-time-withdrawals-via-interac-etranfer/

Join Us! Mark your calendars for our next Live Podcast with our guest Kate Fisher, Partner at Hudson Cook LLP, this Thursday the 28th of September. Why Attend? Kate is an expert on the legal side of commercial finance, where she'll be sharing her insights about the most recent topics that have been affecting the industry, issues that will make an impact on your funding business, compliance, the RBFC, and fielding some of your questions. Don't miss this opportunity! Share with your colleagues and friends. Podcast Details: Date: Thursday, September 28th Time: 1 pm EST Where: Zoom

We're thrilled to announce an upcoming event that you won't want to miss! Webinar Details: Date: Thursday, September 14th Time: 1 pm EST Where: Zoom Why Attend? We're honored to have Scott Crockett, the Founder and CEO of Everest Business Funding and Board President of the Revenue Based Finance Coalition, as our guest. Scott is a renowned figure in the commercial finance and alternative lending industries, and he'll be sharing his insights, experiences, and the latest trends that are shaping our sector. What's in Store? Deep Dive into Commercial Finance: Understand the challenges and opportunities in the world of commercial finance. Brokers Expo Announcement: Scott will also be discussing the upcoming Brokers Expo hosted by the Revenue Based Finance Coalition. Scheduled for October 10th in New York City, this event promises to be a significant gathering for industry professionals. Don't miss out on the details and how you can be a part of it! Q&A Session: Have questions? Scott will be addressing queries, so it's a golden chance to get answers straight from an industry expert. Who Should Attend? Whether you're a seasoned professional, a newcomer to the industry, or simply curious about commercial finance and alternative lending, this webinar is for everyone. We welcome all to join and be part of this enlightening session. How to Register? Click the button below to be directed to the signup page. Once registered you will receive an email with the Zoom meeting information. Mark your calendars and ensure you're free at 1 pm EST on September 14th. We're excited to see you there and delve deep into the world of commercial finance. Let's learn, network, and grow together!

Affiliate Alert: We may earn a commission if you purchase through our links, at no extra cost to you What Is Hubspot Businesses that are focused on growth may enhance their interactions with leads and customers with HubSpot's CRM. The software seeks to make it simple to integrate team strategy and promote conversion by utilizing the power of skillfully designed sales, marketing, customer support, content management, and operations capabilities. In order to build a user experience that fits the way teams operate, users may also connect with over 875 integration applications, APIs, and solution partners through the software. For both small and enterprise-level companies, HubSpot is promoted as the perfect tool to aid with business growth. Features One of the key benefits of using Hubspot for small businesses is the all-in-one nature of the platform. It provides a range of features for marketing, sales, and customer service, all in one place. This makes it easy for businesses to manage their customer interactions and grow their customer base. Features include: Click-to-call Email templates Live chat Meeting scheduler Real-time notifications, such as when a lead opens your email Pipeline management Lead management Deal tracking Workflow automation Customer data insights Up to 1 million contacts Customer support Productivity and sales activity reports Pros Hubspot also offers a range of tools for email marketing, social media management, and content management. This allows businesses to create and distribute engaging content to their customers and prospects, and to track the success of their campaigns. Another pro of Hubspot is its integration with other tools and services. It can be integrated with popular CRM platforms, such as Salesforce and Zendesk, as well as other marketing and sales tools, such as LinkedIn and Mailchimp. This allows businesses to manage their customer interactions and data across multiple platforms, making it easier to track and analyze customer behavior. Also, it is easy to use & constantly evolving. Cons One potential disadvantage of Hubspot is the cost. For smaller businesses, the platform is not cheap, and the starter plan won't get you access to all of its features. However, the investment may be worth it for businesses that are serious about growing their customer base and improving their customer relationships. No telephone support with the free plan. Pricing In terms of pricing, Hubspot offers a range of subscription plans, where you can begin using it for Free and then go to $45 per month for the Starter plan. It goes to $800 per month for the Professional plan. Each plan offers a different set of features and tools, so businesses can choose the plan that best fits their needs and budget. Conclusion Overall, Hubspot is a powerful software platform that can help small businesses grow and manage their customer relationships. It offers a range of tools and features that can help businesses create and distribute engaging content, manage their customer interactions, and track the success of their marketing and sales efforts. It is very suitable for most small businesses even with budget concerns because it will handle almost everything you need from a CRM and more. At a minimum, I would recommend testing out HubSpot to see if it will work for your business. Let us know what you think down below in the comments.

The commercial finance sector, with its vast transactions and intricate dealings, is far from immune to fraud. It might be more common than ever. As loan brokers and direct lenders navigate this complex terrain, the importance of vigilance and advanced tools cannot be overstated. We shed some light on the cutting-edge technologies aiding fraud detection, the potential pitfalls in financial and bank statements, and the essential inquiries lenders must make to business owners. Harnessing Technology for Fraud Detection The digital age has ushered in a plethora of tools tailored to combat fraud. A standout among these is software adept at detecting alterations in bank statements. By discerning deviations from a statement's original form, lenders can ensure the authenticity of the financial data they receive. Furthermore, the advent of virtual site inspections has revolutionized the verification process. Companies now offer services where lenders can virtually "visit" a business, assessing its legitimacy without ever leaving their office. This not only expedites the loan approval process but also adds an additional layer of security. Spotting the Warning Signs in Financial Documents The specter of identity theft remains a pressing concern. Cases where rogue employees exploit an owner's credentials to secure personal loans are not unheard of. Such malicious endeavors can wreak havoc on a business's financial standing and tarnish the owner's reputation. Lenders should remain alert to: Mismatches in personal details. Unusual surges in loan applications from a single source. Financial data inconsistencies across varied documents. Due Diligence: A State-Specific Requirement It's noteworthy that recent commercial finance regulations, emphasizing the significance of due diligence, are state-specific. Certain states now mandate brokers and lenders to exercise a heightened level of scrutiny prior to loan approvals. This regulatory push aims to maintain transparency and trust within the financial ecosystem. Engaging Business Owners: Key Questions Direct interactions with business owners can unveil crucial insights. Lenders might consider posing some of the following questions: What is the intended purpose of the loan? Could you expand on your business's financial trajectory over the past year? Were there any major financial shifts or occurrences recently? Are there any ongoing legal battles? Would there be any reason you would lose the majority of your customers? Lenders' Best Practices Consistency remains a cornerstone in the battle against fraud. Lenders are advised to: Maintain rigor in their evaluation processes. Steer clear of altering established procedures. Regularly upgrade their technological arsenal. Amass detailed data on business owners to aid in future decisions. Staying updated with technological breakthroughs not only fortifies defenses against fraud but also refines the loan decisioning mechanism, ensuring deserving businesses secure timely financial backing. Conclusion The quest to detect fraud in commercial finance loans demands a blend of state-of-the-art technology, unwavering vigilance, and meticulous due diligence. As the realm of commercial finance continues to evolve, being proactive and informed remains the most potent strategy against fraudulent endeavors.