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Great conversation recently with Lou Calderone , President of Vox Funding . (Follow us on YouTube so you don't miss exclusive videos there) Many often sell RBF/MCA on speed: "offers in 20 minutes", "funds in 4 hours," "same day wires." But Lou raised a critical point during our interview: at what point does speed become a liability? In a market defined by tightening margins, questionable business practices, the "race to the bottom" on speed might be the most dangerous game an operator can play. We dug into: Why operational discipline beats raw speed. The risks that keep Presidents up at night (hint: it's not just credit defaults). Why repeat business is the only metric that proves your product actually works. If you are operating in the alternative finance space, you need to hear Lou’s take on the shift from "Competitive" to "Selective." Vox Funding website 1 (800) 614-8799 support@voxfunding.com

The skinny: The SBA has suspended nearly 7,000 borrowers in Minnesota from all federal lending programs following an internal review that flagged $400 million in suspected fraud linked to PPP and EIDL loans. The federal government just effectively "fired" 7,000 small business borrowers in Minnesota. In a move that has sent shockwaves through the lending community, SBA Administrator Kelly Loeffler  announced a massive suspension of 6,900 Minnesota-based borrowers, barring them from accessing any future SBA capital. The agency alleges these entities are tied to nearly $400 million in fraudulent PPP and EIDL loans  originating from the pandemic era. But the scope of this action, and the aggressive language coming from Washington, suggests this is about more than just bad loans. It looks like a declaration of war on a state's financial infrastructure. The Facts: What We Know The Numbers:  The SBA flagged 7,900 specific loans  (PPP and EIDL) valued at approximately $400 million  as having "suspected fraudulent activity." The Penalty:  The 6,900 borrowers connected to these loans are now suspended . This is the "death penalty" for government capital, they cannot receive 7(a) loans, disaster relief, or grants. The Wider Freeze:  Administrator Loeffler didn't stop at the borrowers. She also halted $5.5 million in annual federal support  to Minnesota’s SBA resource partners (SBDCs, Women’s Business Centers), effectively defunding the support network for legitimate  businesses in the state. The Catalyst:  The crackdown follows explosive allegations regarding widespread fraud within Minnesota’s Somali community daycare centers and the fallout from the Feeding Our Future   scandal , which federal prosecutors have described as a $250 million theft of taxpayer money. Compliance Cleanup or Political Retaliation? The sheer ferocity of this move forces us to ask a difficult question: Is this standard oversight, or is it a political maneuver to punish a blue state administration? We need to look at the facts without the partisan lens to understand the risk for lenders. 1. Is the "State-Wide" Strategy Normal? The Data:  Fraud happens everywhere. Florida and California had massive PPP fraud numbers. Yet, we have never seen the SBA freeze funding for an entire state's resource network based on the actions of specific bad actors. The Question:  Why Minnesota? Is the fraud truly "endemic" to the state's regulatory culture as Loeffler claims, or is this a targeted strike against Governor Tim Walz’s administration? 2. The Timing is Suspiciously Perfect The Context:  This announcement comes days after a viral video by a conservative influencer exposed alleged daycare fraud in the state, and amidst Governor Walz’s declining political fortunes (he recently ended his bid for a third term). The Question:  Did the SBA just happen to finish a multi-year audit this week, or was this file pulled from a drawer to capitalize on a viral news cycle? 3. The "Weaponization" of Compliance The Reality:  Whether you agree with the politics or not, the tactic  is clear. The administration is using access to capital as a lever to force political change at the state level. The Question for Lenders:  If the SBA is willing to "redline" an entire state's support network due to fraud allegations, which state is next? New York? Illinois? If you are a lender with a heavy concentration in a politically adverse state, is your portfolio suddenly at higher risk of an indiscriminate federal audit? According to the 2024 and 2025 SBA Small Business Profiles, there are approximately 525,000 to 560,000 active small businesses in Minnesota. APPLY TODAY FOR THE NEW PLATINUM CARD The Bottom Line: There is no doubt that fraud occurred in Minnesota on a massive scale (the Feeding Our Future convictions prove that). However, the response, cutting off support for legitimate businesses and using "shock and awe" suspensions, marks a new era of weaponized compliance . In 2026, credit risk isn't just about the borrower's bank account. It's about their zip code and who is sitting in the Governor's mansion.

Federal Judge Amy Berman Jackson has ordered the administration to continue funding the CFPB, blocking a legal maneuver that attempted to cut off the agency's budget due to the Federal Reserve operating losses. If you were hoping the Consumer Financial Protection Bureau (CFPB) was about to quietly run out of cash and fade into the sunset, we have bad news. In a pivotal ruling handed down today, U.S. District Judge Amy Berman Jackson  ordered the Trump administration to continue funding the CFPB, effectively blocking a strategic attempt to starve the agency of its operating budget. The "Starvation" Strategy Explained To understand today's ruling, you have to look at the unique way the CFPB gets paid. Unlike most agencies that beg Congress for money every year, the CFPB draws its funding directly from the Federal Reserve . This structure was designed to make the agency independent. But recently, Acting Director Russell Vought  (appointed by the Trump administration with the explicit goal of reigning in the regulator) found a loophole. The Argument:  The law says the CFPB is funded from the Fed's "combined earnings." The Loophole:  Since 2022, the Federal Reserve has technically been operating at a loss (due to interest rate environments). The Move:  Vought’s team argued that because the Fed has no "earnings" (profits), there is legally no money to transfer to the CFPB. It was a clever, technical kill-switch designed to zero out the agency’s bank account by January 2026. The Ruling: "Starving" the CFPB is Illegal Judge Jackson didn't buy it. In her 32-page decision released today, she slammed the administration's argument as a "manufactured" crisis designed to achieve what they couldn't do through Congress: eliminate the agency entirely. She ruled that the Fed's temporary operating loss does not negate the statutory obligation to fund the consumer watchdog. The order mandates that funding must continue "seamlessly," ensuring the agency can pay its 1,400 employees and, crucially for our audience, continue its examinations and enforcement actions. Look Ahead While appeals are certain (the D.C. Circuit will hear arguments on February 24, 2026), the agency has the cash to keep operating right now.

NEW YORK, NY, 12/26/25: CFG Merchant Solutions® Reinforces Commitment to Seamless, Compliant Funding for ISO Partners Ahead of California SB 362 New disclosure requirements met with streamlined processes that protect speed, clarity, and funding efficiency for our ISO partners.  New York, NY —  CFG Merchant Solutions® announced its full operational readiness for California Senate Bill 362 (SB 362), set to take effect January 1, 2026. While the legislation expands commercial financing disclosure requirements statewide, CFGMS has proactively implemented compliance-ready systems designed to preserve fast, frictionless funding for its ISO partners  without disrupting sales velocity or merchant experience. A Pro-Active Approach to Compliance Without Compromise for ISO Partners  CFG Merchant Solutions® has taken a pro-active, partner-first approach to CA SB 362 implementation by integrating compliance directly into its funding infrastructure. This ensures that expanded disclosure requirements do not slow down deal execution or capital delivery. CFG Merchant Solutions® Is Fully SB 362 Compliant   We have trained our sales, underwriting, and operations teams to follow SB 362  requirements consistently and accurately.  We are fully prepared to provide merchants and partners with all required disclosures and supporting documentation.  These enhancements allow ISO partners to move directly from  offer to funding with the same speed and confidence they have grown to expect from CFGMS, while remaining fully compliant with CA SB 362. Clear Expectations, Faster Execution for ISO Partners To ensure seamless compliance across all origination channels, CFG Merchant Solutions® expects ISO partners to: Avoid the misleading use of “interest” or “rate”. Ensure sales teams are properly trained to stay compliant.  CFGMS will continue to provide guidance, tools, and training resources to support partners as the effective date approaches. CFG Merchant Solutions® Commitment to Transparency and Compliance   If you have questions about SB 362, APR disclosures, or compliance expectations, please reach out to your CFG Merchant Solutions® representative or reach out directly to our compliance department at   compliance@cfgms.com .  More guidance will follow as implementation continues. Thank you for your continued support and cooperation.   Not yet a CFGMS ISO Partner? Sign up in seconds:  https://cfgmerchantsolutions.com/partnerships   MEDIA CONTACT NICK DEFEIS HEAD OF MARKETING, CFGMS NDEFEIS@CFGMS.COM

If we had to summarize the business lending industry in 2025 with one word, it would probably be "Audacious." This year wasn't just about rates and regulations. It was about billion-dollar frauds, news anchors turned felons, and SEC complaints that read like bad screenplays. You, the Funder Intel audience, clearly have a taste for the dramatic, and the data proves it. We crunched the numbers on our traffic, and the results are in. From regulatory headaches to true crime thrillers, here are the Top 9 Most Viewed Blogs of 2025 , ranked in ascending order. Scroll down to see what took the #1 spot (hint: it cost Wall Street $2.3 billion). 9. The "Carroting" Scheme & Global Headwinds Article:   LOC carroting scheme arrests | Falling US Dollar impact | SME lending | Legislative news Kicking off our list is a classic "mixed bag" of industry intel. While the macroeconomic talk about the falling dollar was important, what really grabbed your attention was the arrest of bad actors running a "Carroting" scheme—dangling fake Line of Credit offers to hook desperate merchants. It was a grim reminder that in this industry, if an offer looks too good to be true, it’s probably a trap. 8. The SBA Flips the Switch Article:   SBA Reinstates Guarantee Fees Effective March 27th Nothing gets the broker community clicking quite like a fee change. When the SBA announced the reinstatement of guarantee fees back in March, it sent a ripple through the ecosystem. This story was pure utility—you needed to know when the costs were going up so you could set expectations with your borrowers. A dry topic? Maybe. Crucial for your wallet? Absolutely. 7. The Fall of the Kingpin Article:   Par Funding CEO Joseph LaForte Sentenced in $404M Fraud Case The Par Funding saga finally reached its conclusion. Joseph LaForte, the man at the center of the $404 million scheme, was sentenced, bringing to a close one of the most aggressive enforcement actions in industry history. This story was a "must-read" for anyone wanting to know just how hard the DOJ is willing to swing the hammer when alternative lending crosses the line into racketeering. 6. The Guilty Plea (That Wasn't the End of the Story) Article:   Breaking: Kris Roglieri pleads guilty $55m judgment ordered Kris Roglieri's name appears twice on this list, proving he was the undisputed main character of 2025's legal drama. At #6, we have the guilty plea. After months of denials and legal maneuvering, the "Prime Capital" founder finally admitted to the fraud and was hit with a staggering $55 million judgment. It was a massive story, but surprisingly, not even the most viewed Roglieri update of the year... 5. Texas Drops the Hammer (HB 700) Article:   Texas Governor Signs HB 700 Into Law; What Funders and Brokers Must Do Next While fraud grabs headlines, regulation changes business models. The signing of House Bill 700 in Texas was the single biggest compliance shift of 2025. Requiring registration and disclosure for commercial financing in the Lone Star State forced ISOs and Funders to scramble. This article was your playbook for survival, explaining exactly what you needed to do to keep writing deals in Texas without getting fined. 4. "Yo Homie!" (The SEC’s Best Reading Material) Article:   Yo Homie! The MCAs are crankin! new SEC complaint shows You couldn't make this dialogue up. When the SEC released the complaint detailing the inner workings of a massive MCA fraud, the text messages were... colorful. The phrase "Yo Homie! The MCAs are crankin!"  became an instant industry meme, proving that even while committing securities fraud, some people just can't resist bragging via text. A hilarious, terrifying read that went viral for all the wrong reasons. 3. The Anchorwoman’s Downfall Article:   Stephanie Hockridge: From News Anchor to PPP Fraud Trial Inside the Blueacorn Scandal It had all the elements of a Netflix documentary: A glamorous TV news anchor, a fintech startup (Blueacorn), and a massive PPP fraud scheme. The trial of Stephanie Hockridge captivated the industry because it showed how deep the "easy money" rot of the pandemic era really went. You didn't just read this one for business intel; you read it for the sheer spectacle. 2. Bail Denied: The Roglieri Saga Peaks Article:   Federal Appeals Court Denies Bail for Kris Roglieri Trial Date Set Interestingly, the process  was more popular than the result . The Roglieri story that grabbed the #2 spot wasn't his guilty plea, but the dramatic denial of his bail. The image of a high-flying CEO being deemed a flight risk and kept behind bars while his empire crumbled resonated deeply. It was the moment the industry realized: He isn't getting out of this. Get Your AmEx Platinum Card Today 1. The Main Event The $2.3 Billion Vanishing Act: First Brands and the Factoring Fraud That Shocked Wall Street Here it is. The most read, most shared, and most shocking story of 2025. When First Brands  imploded, it didn't just take down a company; it punched a $2.3 billion hole in the factoring industry. This wasn't a "small business" scam; this was institutional-grade deception that fooled some of the smartest money on Wall Street. Why was this #1? Because of the scale. It was a reminder that whether you are funding $10k MCAs or $100M factoring lines, the risk of fraud is the constant shadow in our business. If you missed this deep dive, go back and read it now, it is the definitive case study of 2025. Here is to a profitable, and hopefully slightly less "interesting", 2026.

As a broker in the alternative business finance space, your value isn't just finding capital, it's explaining it. When you present a merchant cash advance/revenue-based/sales-based financing offer to a client, the immediate pushback is almost always on price. Merchants that are used to bank APRs often experience "sticker shock" when they see the total payback amount of sales-based financing. Your job is to move the conversation from "cost" to "value" and "ROI." The best way to do that is with radical transparency and clear math. Stop Scribbling on Napkins Trying to explain daily remittances and factor rates over the phone is a recipe for confusion and lost deals. You need a professional, centralized tool to walk your merchant through the numbers. We built the Funder Intel MCA Calculator  to be that resource. Use it during your consultation calls. Plug in the funded amount, the buy rate, and the estimated term with  your client. Show them exactly how the payment is derived. If you need to compare multiple offers or play around with the numbers from an underwriter's perspective, you can use our advanced Underwriting Calculator . When a merchant can visualize the numbers clearly, trust increases. They stop fixating on the "rate" and start focusing on what the capital will do for their business. Use the calculator to help them determine the ROI: "If this $50k advance costs you $15k, but allows you to buy inventory that generates $100k in profit, the math works." Equip yourself with better tools. Bookmark our merchant cash advance calculator and use it to close more deals with confidence.

In 2026, funders are more selective than ever about who they allocate capital to, and that scrutiny extends well beyond borrowers to the sales partners who originate deals . While many brokers still believe deal volume is the primary driver of success, most funders now rely on a more sophisticated KPI framework focused on efficiency, reliability, and long-term performance. These internal metrics quietly determine which brokers receive faster approvals, higher limits, and stronger relationships. Understanding these KPIs is no longer optional for brokers who want to scale sustainably. For Illustration Purposes 1. Approval-to-Funding Ratio This KPI measures the frequency of approved deals that actually fund. A high ratio signals: Proper borrower qualification Accurate expectation setting Strong follow-through Funders consistently favor brokers who submit fewer deals that close over brokers who submit large volumes with low conversion. 2. Documentation Accuracy & File Completeness Incomplete or error-filled submissions create operational friction. Funders track: Number of stip re-requests Time spent correcting files Consistency of packaging Clean submissions often receive faster decisions even when risk profiles are similar. 3. Deal Fallout Rate High fallout rates suggest: Weak borrower commitment Poor communication Inaccurate pre-qualification This KPI directly impacts underwriting efficiency and capital deployment planning. 4. Post-Funding Performance (The Hidden KPI) One of the most important metrics, the loss ratio, measures how deals perform after funding . Funders monitor: Early defaults First-90-day payment behavior Renewal quality Brokers whose deals perform poorly post-funding often see reduced offers over time, even if approvals remain strong. 5. Consistency Over Raw Volume Consistency allows funders to: Forecast capital needs Allocate underwriting resources Offer better terms confidently Erratic submission patterns are harder to support operationally, regardless of volume. 6. Professionalism & Communication Responsiveness, transparency, and professionalism directly impact trust. Funders remember: How issues are handled How quickly brokers respond Whether risks are disclosed upfront These qualitative factors often influence decisions when metrics are close. Verdict The most successful brokers in 2026 are those who understand how funders internally measure performance. Optimizing for funder KPIs doesn’t just improve approvals; it strengthens long-term relationships, improves economics, and creates sustainable growth in a competitive market.

In this exclusive interview, Rohit Arora , CEO and Co-Founder of Biz2Credit , joins Funder Intel for an in-depth conversation on the state of small business lending and where the market is headed next. We discuss how Biz2Credit performed in 2025, how many businesses the platform funds annually, and which products and services business owners and partners are finding the most value in today’s market. Rohit also shares insights into Biz2Credit’s newly introduced line of credit, how it’s being received, and what brokers should know about referring deals to this product. The conversation goes deeper into broader industry trends, including how artificial intelligence is shaping underwriting, decisioning, and the future of lending. Drawing from Biz2Credit’s Small Business Earnings Report, Rohit explains the key signals that could influence the outlook for small business financing in 2026. This interview is a must-watch for business loan brokers, lenders, fintech professionals, and anyone interested in the evolving small business lending landscape. 👉 Learn more about Biz2Credit

Forget waiting 3-5 business days for your loan to hit your account. Starting in 2026, approved borrowers will have funds loaded onto a Mastercard, instantly usable anywhere, before they leave the lender's website. For the last decade, the alternative lending industry has been obsessed with one metric: Speed to Fund . We moved from weeks to days, then days to hours. But even the fastest approval process eventually hits the same bottleneck: the ACH clearing house. You approve the merchant at 4:00 PM on a Friday. The wire cutoff is missed. The merchant doesn't see the funds until Tuesday morning. In our world, that friction kills deals. Yesterday’s announcement from Mastercard  and lending tech heavyweight LoanPro  isn’t just another partnership press release, it is the blueprint for killing that bottleneck permanently. By 2026, the "Loan on Card" model will make the concept of "waiting for a wire" obsolete. The Mechanics: Turning Capital into Currency The partnership introduces a concept called "Loan on Card."  Here is the breakdown for the ISOs and Funders reading this: Instead of wiring $50,000 to a merchant’s bank account (where it sits commingled with other funds), you provision a virtual Mastercard instantly upon approval. The Merchant  gets a notification on their phone. The Card  is added to their Apple/Google Wallet immediately. The Spend  can happen seconds later, at a supplier, a vendor, or anywhere Mastercard is accepted. Crucially, this is not a credit card . It is a term loan  or advance  dressed up as a card. The repayment structure remains the fixed-term or remittance-based model you already use, but the delivery mechanism  has shifted from slow rails (ACH) to fast rails (Card). Why Lenders Should Care (Beyond Speed) Speed is the obvious win, but the hidden value here is Control . When you wire cash, you lose visibility. You have no idea if that $50k went to buy inventory or to pay off a competitor’s balance. With "Loan on Card," lenders gain: Spend Intelligence:  You can see exactly where the capital is being deployed. Contextual Underwriting:  Real-time spend data allows for smarter renewals. If you see a contractor buying lumber at Home Depot, you know they are working. If you see them at a casino, you know there could be a problem. Brand Stickiness:  Every time they tap their phone to pay, they see your  brand on the digital card, not just a generic deposit in their bank ledger. The "Super-App" Race We are seeing a convergence. Expense management platforms (like Brex or Ramp) started with cards and moved into lending. Now, pure-play lenders are using tech like LoanPro to move into cards. The Mastercard x LoanPro alliance signals that in the next 12-24 months, the distinction between "Lender" and "Issuer" will vanish. If you aren't offering your merchants a way to spend their capital instantly, you are going to lose the deal to a shop that does.

PayPal’s recent filing to become a bank in Utah marks a significant step in the evolving relationship between fintech companies and traditional banking. This move signals more than just regulatory compliance; it opens new doors for PayPal to expand its business lending capabilities and deepen its role in financial services. Why PayPal Wants to Become a Bank PayPal has long been a leader in digital payments, serving millions of consumers and businesses worldwide. However, operating as a non-bank financial institution limits its ability to offer certain financial products and services directly. By becoming a bank, PayPal gains the ability to: Accept deposits directly from customers Offer a wider range of loan products with potentially lower costs Access Federal Reserve services and deposit insurance through the FDIC Reduce reliance on partner banks for regulatory compliance and capital requirements Utah is a popular state for fintechs seeking bank charters due to its favorable regulatory environment and strong financial services infrastructure. PayPal’s choice of Utah aligns with other fintechs that have pursued similar paths to gain more control over their financial offerings. Expanding Business Lending Opportunities One of the most exciting prospects of PayPal’s bank charter is the potential to enhance its business lending services. PayPal has already provided $30 billion in loans and working capital advances to its business clients through PayPal Working Capital and other financing products. These offerings have helped more than 420,000 small and medium-sized businesses (SMBs) access quick funding based on their PayPal sales history. With a bank status, PayPal can: Offer more competitive interest rates and longer-term loans Develop new credit products tailored to diverse business needs Improve underwriting processes using its vast data on merchant transactions Provide seamless integration of banking and lending services within its platform This could make PayPal a more formidable player in the SMB lending space, challenging traditional banks and alternative lenders alike. The Broader Trend: Fintechs Becoming Banks PayPal’s move is part of a larger trend where fintech companies are either applying for bank charters or acquiring existing banks. A recent example is Enova’s acquisition of Grasshopper Bank , a digital bank focused on lending to small businesses and startups. This acquisition highlights how fintechs are seeking to combine technology-driven lending with the regulatory advantages of a bank charter. This trend reflects fintechs’ desire to: Gain regulatory clarity and stability Control the customer relationship end-to-end Expand product offerings beyond payments and lending Compete more directly with traditional banks For business lending professionals, this means the competitive landscape is shifting. Fintechs with bank charters can offer faster, more flexible, and often more accessible financing options, leveraging technology and data in ways traditional banks may find challenging to match. Business loan analytics dashboard What This Means for Business Lending Industry Professionals The entrance of PayPal as a bank will likely accelerate innovation in business lending. Here are some key takeaways for industry professionals: Increased Competition: Traditional lenders will face more competition from fintech banks offering streamlined loan processes and integrated financial services. Data-Driven Lending: PayPal’s access to transaction data allows for more accurate risk assessment and personalized loan offers, raising the bar for underwriting standards. Faster Access to Capital: Businesses may benefit from quicker loan approvals and funding, as fintech banks can automate many lending steps. New Partnerships: Banks and fintechs may explore partnerships to combine strengths, such as fintechs providing technology platforms and banks offering regulatory expertise. Regulatory Considerations: As fintechs evolve into banks, regulatory scrutiny is expected to increase, necessitating compliance teams to adapt to new frameworks. Looking Ahead PayPal’s bank charter filing is a clear signal that fintech companies are moving into full-service financial institutions. This evolution will reshape business lending by making credit more accessible, tailored, and integrated with daily business operations. PayPal’s move also invites a broader conversation about the future of banking and lending. As fintechs gain banking powers, the lines between traditional banks and technology companies will blur, creating new opportunities and challenges for all players involved.

Forward Financing completed its first $170 million asset-backed securitization in December 2025, expanding total debt facilities to $620 million. The Boston-based fintech lender, which has provided over $4.3 billion to 85,000 small businesses since 2012, saw the transaction oversubscribed by 2x with Guggenheim Securities as lead advisor. Forward Financing Closes $170M Asset-Backed Securitization Forward Financing, a Boston-based small business lender, has completed its inaugural asset-backed securitization totaling $170 million. The transaction brings the company's total debt capacity to $620 million and marks a significant evolution in how the fintech funds its lending operations. The facility includes a three-year revolving period with three classes of notes and was oversubscribed by more than 2x, signaling strong investor confidence in Forward's portfolio quality. Guggenheim Securities led the transaction as sole structuring advisor and placement agent. Since its founding in 2012, Forward has provided over $4.3 billion in capital to nearly 85,000 small businesses nationwide. Implications for small business capital access Securitization represents a maturation milestone for alternative lenders. By packaging loans into securities sold to institutional investors, Forward gains access to cheaper, more stable capital compared to traditional warehouse lines or direct lending. This reduces funding costs, improves margins, and provides runway for scaling operations—critical advantages in a competitive small business lending market. The 2x oversubscription suggests institutional appetite for small business loan exposure remains robust despite economic uncertainty. For the broader alternative finance sector, successful securitizations validate business models and open doors for similar players to tap capital markets. However, this also raises scrutiny: regulators and investors will closely monitor performance data, default rates, and underwriting standards as these portfolios mature. For small businesses, increased institutional funding could translate to more available capital and potentially better pricing as competition intensifies among lenders. About Funder Intel Funder Intel is a commercial finance media, education, and research platform covering SBA lending, fintech, revenue-based financing, and business loan underwriting. Our content is designed for business owners, brokers, lenders, and fintech professionals seeking accurate, industry-informed insights.

In a bold strategic move that could reshape the alternative lending landscape, Enova International (NYSE: ENVA) announced today it has entered a definitive agreement to acquire Grasshopper Bank for approximately $369 million in a cash-and-stock transaction. The deal unites one of the nation's leading online lenders with a cutting-edge digital bank, creating a financial services powerhouse uniquely positioned to serve underserved consumers and small businesses. Enova Transaction Overview The acquisition brings together two complementary fintech innovators. Enova, a Chicago-based online lending giant with over 20 years of experience and more than $65 billion in loans originated to over 13 million customers, will acquire Grasshopper Bancorp, Inc. and its wholly owned subsidiary, Grasshopper Bank N.A. Founded in 2019, Grasshopper Bank has rapidly grown into a client-first digital banking platform with $1.4 billion in total assets and approximately $3 billion in deposits as of September 30, 2025. The New York-based bank specializes in Banking-as-a-Service (BaaS), API banking platforms, commercial lending, SBA loans, and consumer banking services. The transaction is expected to close in the second half of 2026, pending Grasshopper shareholder approval, regulatory approvals from the OCC and Federal Reserve, and other customary closing conditions. Following the close, Grasshopper Bank will operate as a bank subsidiary of Enova, which will become a newly formed bank holding company. From the Investor Presentation Market Reaction: Stock Surges on Strategic Vision Investors enthusiastically embraced the news, sending Enova's stock soaring . The company's shares jumped to a new 52-week high of $151.94 during today's trading session, up approximately 11% from yesterday's close of $141.40. This sharp rally reflects Wall Street's confidence in the strategic rationale behind the deal. Over the past year, Enova's stock has delivered remarkable returns of 47.48%, significantly outperforming the S&P 500's 17.09% gain. The company's market capitalization now stands at approximately $3.76 billion, solidifying its position as a mid-cap financial services leader. What This Means for the Business Lending Industry This acquisition represents far more than a simple consolidation play; it's a strategic transformation that addresses critical pain points in the business lending ecosystem. 1. The Bank Charter Advantage: Navigating New State Regulations Perhaps the most significant aspect of this deal is Enova's acquisition of a national bank charter. For years, alternative lenders have operated in partnership with banks or under state-by-state licensing regimes. This acquisition changes the game by allowing Enova to: Offer centralized, scalable lending and deposit products directly through a national bank charter Expand its geographic footprint and product offerings across more states Simplify regulatory compliance and operational complexity Access more diverse and potentially lower-cost funding sources through deposit-taking capabilities The Texas HB 700 Exemption: A Case Study in Strategic Timing The timing of this acquisition is particularly strategic given the rapidly evolving state regulatory landscape. Texas House Bill 700 , which took effect on September 1, 2025, exemplifies the regulatory challenges facing non-bank lenders. The law imposes stringent requirements on providers of commercial sales-based financing, including merchant cash advances and revenue-based loans: Mandatory registration with the Texas Office of Consumer Credit Commissioner Comprehensive disclosure requirements for transactions under $1 million A near-impossible requirement that providers hold a first-priority perfected security interest in merchant deposit accounts before using ACH debits Potential civil penalties of $10,000 per violation However, HB 700 includes a critical exemption that applies to "a bank, out-of-state bank, bank holding company, credit union, federal credit union, out-of-state credit union, or any subsidiary or affiliate of those financial institutions." By becoming a bank holding company through the Grasshopper acquisition, Enova would be exempt from HB 700's burdensome requirements and from similar laws being enacted in states like California, Utah, and Louisiana. This exemption allows bank-affiliated entities to: Continue using ACH debit mechanisms without the first-lien requirement that has rendered many MCA programs operationally impossible in Texas Avoid state-by-state registration and disclosure requirements that add significant compliance costs Operate with greater regulatory clarity and reduced legal risk Maintain operational flexibility that non-bank competitors have lost Texas is not alone in this regulatory trend. At least nine other states have enacted commercial financing disclosure laws since 2018, with more expected to follow. As this patchwork of state regulations grows more complex and restrictive for non-bank lenders, the strategic value of a bank charter becomes increasingly clear. David Fisher, Enova's Chairman & CEO, emphasized this point: "Acquiring and partnering with Grasshopper creates a powerful digital bank that positions us to offer a more comprehensive suite of financial solutions across more states to empower consumers and small businesses with the products they need to succeed." While management hasn't explicitly cited regulatory arbitrage as a driver of the deal, the competitive advantage is undeniable. As non-bank competitors face mounting compliance costs and operational restrictions in key markets like Texas, Enova's bank charter creates a regulatory moat that will be difficult for competitors to replicate. 2. BaaS and API Banking: The Future is Here Grasshopper's expertise in Banking-as-a-Service and API banking platforms adds a new dimension to Enova's capabilities. The BaaS model has become increasingly important as fintech companies seek banking infrastructure without building it from scratch. This acquisition positions Enova to: Serve fintech partners looking for banking infrastructure Generate fee-based revenue streams beyond traditional lending Leverage technology to scale more efficiently Tap into the growing demand for embedded finance solutions 3. Small Business Lending Gets a Boost Enova has been a powerhouse in small business lending, particularly after its 2020 acquisition of OnDeck. The company's small business segment has shown remarkable growth, with small business offerings representing approximately two-thirds of Enova's total loan portfolio of $4.3 billion. Recent data shows that 76% of small businesses now prefer non-bank lenders for their speed and convenience, an all-time high. This trend plays directly into Enova's strengths. By adding Grasshopper's SBA lending capabilities and commercial banking products, Enova can offer a more complete suite of solutions to its small business customers. Jim Granat, who leads Enova's small business operations, has built a formidable operation through brands like OnDeck, Headway Capital, and The Business Backer. The addition of Grasshopper's capabilities will only strengthen this position. 4. Funding Diversification and Balance Sheet Strength One of the most compelling strategic benefits is funding diversification. Alternative lenders have traditionally relied on credit facilities, asset-backed securitizations, and warehouse lines to fund their loan originations. By acquiring a bank with $3 billion in deposits, Enova gains access to a more stable, diversified funding base. Steve Cunningham, Enova's CFO (who will become CEO effective January 1, 2026, and will also serve as CEO of Grasshopper Bank post-close), noted: "The additional scale and diversification from this transaction should meaningfully enhance our balance sheet strength and flexibility, leading to substantial revenue and funding synergies and significant EPS accretion." The Numbers: Compelling Financial Accretion Enova has set aggressive but achievable financial targets for the acquisition: More than 15% adjusted EPS accretion  in the first year post-closing More than 25% adjusted EPS accretion  once synergies are fully realized beyond the first year These projections suggest significant cost savings and revenue opportunities from combining the two platforms. Given Enova's track record of successful integrations, including its 2020 OnDeck acquisition, management has earned credibility in executing on merger synergies. The $369 million purchase price appears reasonable given Grasshopper's $1.4 billion in assets and $3 billion in deposits. The deal values the bank at approximately 26% of assets, which is in line with or below typical bank acquisition multiples in today's market. Competitive Positioning: Building a Moat This transaction positions Enova uniquely in the competitive landscape. Few companies can match the combination of: Advanced analytics and machine learning  capabilities for credit underwriting A national bank charter  for regulatory flexibility and funding access Scale in both consumer and small business lending  with a diversified product portfolio BaaS infrastructure  to serve the broader fintech ecosystem Two decades of experience  serving non-prime and underserved borrowers Competitors in the online lending space and regional banks pushing into digital will need to respond to this new competitive reality. Leadership Continuity and Cultural Integration The deal includes thoughtful leadership planning. Mike Butler, Grasshopper's current CEO, will remain as President of Grasshopper Bank, reporting to Steve Cunningham. This structure preserves institutional knowledge while integrating Grasshopper into Enova's broader strategic vision. Cunningham's elevation to CEO of both Enova and Grasshopper Bank reflects his deep understanding of the company's operations and the strategic importance of this acquisition. With Cunningham at the helm, investors can expect disciplined execution and a focus on delivering the promised synergies. Risks and Considerations While the strategic rationale is compelling, several risks warrant attention: Regulatory Approval : Bank acquisitions face intense regulatory scrutiny. The OCC and Federal Reserve will carefully evaluate Enova's readiness to operate as a bank holding company. Integration Complexity : Combining a fast-paced lending operation with a regulated bank presents cultural and operational challenges. Economic Sensitivity : Both consumer and small business lending are cyclical. A recession could impact asset quality and profitability. Execution Risk : The promised 15-25% EPS accretion depends on successfully realizing synergies and growing the combined business. The Road Ahead With the transaction not expected to close until the second half of 2026, Enova and Grasshopper have substantial work ahead. Regulatory filings, shareholder votes, and integration planning will dominate the coming months. However, the strategic vision is clear: create a digital-first financial services company that combines best-in-class lending technology with the infrastructure and capabilities of a modern bank. If successful, Enova will have positioned itself as a leader in the next generation of financial services, one that serves the underserved with speed, transparency, and innovation.