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Biggest Challenge of Low Cost Business Lending: The customers couldn’t distinguish the difference
In a podcast between Ballard Spahr attorney Alan S. Kaplinsky and Executive Director of the Responsible Business Lending Coalition Louis Caditz-Peck, the latter revealed one of the biggest revelations he had while previously working in the small business lending division of LendingClub. Winning on price doesn’t work if your customers don’t realize your product is actually a lower price.
“[…] part of that strategy [LendingClub] was to be the lowest cost financing that a small business could get online while properly managing risk and be as fast and easy as some of the fastest and easiest financing a business could get online,” said Caditz-Peck. “And what I found was that strategy of being lower cost really had challenges because customers could not tell that our products were lower cost and that was our biggest challenge.”
Caditz-Peck gave an example of how a quoted “rate” might have different meanings or reflect a different aspect of a deal:
“What was a challenge to our business was losing deals over and over again to competitors that were offering a much worse product, because the customer can’t tell. So this is a San Francisco open floor plan. And I can hear all the conversations happening of our folks that are talking to the small business owners, the kind of loan officer type folks, and they were having this conversation just constantly where they would say, ‘hey, Alan, congratulations, you’re pre-approved. We can lend to you at ________.’ The average APR at the time was about 22% that we were charging. ‘So we can get you financing at 22%’ and the small business borrower would often say, ‘Well, such and such company is offering me 10%’ and then our loan officer would say, ‘okay, but when they say 10%, what is that? Is that an APR? is it an interest rate?’ Usually it was bullshit. It just meant it was a percentage number that had no relationship to how we compute a real interest rate, and was probably equivalent to an interest rate of—in some cases if they’re saying 10% maybe it was like 40%, maybe it was like 300%, but this business owner didn’t know who to trust, and so that was squelching innovation, and that is what continues to be squelching innovation.”
You can listen to the full podcast here.
Stripe Capital Originated 81,000 MCAs and Business Loans in 2025
Stripe, currently in the news for its $159 billion valuation and its potential interest in acquiring PayPal, originated 81,000 merchant cash advances and business loans in 2025 through its subsidiary Stripe Capital. Stripe didn’t say what that equated to in total funding volume but when compared to a rival’s (Square Loans) historical data, it puts it in the likely range of $800 million to $1.2 billion.
Stripe recently conducted a study to measure the impact of Stripe Capital on its customers and found that “businesses that accepted Capital offers grew 27 percentage points faster over the following year than comparable businesses that didn’t.”
“The averages conceal a wide spread,” the company said. “The fastest-growing decile of financed businesses grew more than 3× faster than comparable peers; the next decile grew nearly 100 points faster. A representative example: Xirsys, a server hosting business based in California, used financing from Stripe Capital to set up additional servers in China, India, and Japan, subsequently doubling its revenue. Notably, even businesses with low credit scores grew 11 to 18 percentage points faster after receiving financing.”
Stripe’s rumored interest in PayPal is also notable in the fact that PayPal also has a business loan program. Last year PayPal funded $2.2 billion to small businesses, down from $3 billion in 2024.
View PostRichmond Capital Leaves MCA Space With Negative Case Law On the Way Out
“Substantive unconscionability is clear from the MCAs’ exorbitant and criminally usurious interest rates, among other things.”
– Appellate Division, First Judicial Department, Supreme Court of New York, February 19, 2026
Richmond Capital Group was never part of the mainstream merchant cash advance industry. The company made headlines for years for its alleged connection to Jonathan Braun, who is now back in prison. After landing in the crosshairs of the FTC, a federal court permanently banned the company and its owner from working in the MCA or debt collection industries ever again in June 2022. The New York State Attorney General piled on with its own legal action and secured a $77 million judgment against Richmond and affiliated entities in February 2024.
But the New York judgment was appealed and earlier this month the Appellate Division of the First Department issued its decision, ruling heavily in favor of the Attorney General. Some of its conclusions, while Richmond-circumstance specific, ought to be examined with a wider lens. Snippets of the Court’s rulings are as follows:
On Reconciliations
“Although the MCAs have mandatory reconciliation provisions, no reconciliation was performed in practice, even though it was supposed to be performed on a monthly basis, and daily payments were fixed and did not represent a good faith estimate of receivables; there is no persuasive evidence of any ad hoc incidents of reconciliation (upon a merchants’ request), which were subject to respondents’ “sole discretion,” and there is evidence that such requests were denied; bankruptcy was an express event of default in some of the MCAs, but even where it was not, repeated nonpayment was, as was breach of the MCAs, which was the case where a merchant “interrupt[ed], suspend[ed], dissolve[d] or terminate[d]” its business; and in the event of any of these circumstances, the full uncollected amount became due and respondents were empowered to enforce the personal guarantees they required the merchants to provide.
Usurious intent is also clear as a matter of law, as, absent reconciliation, the usurious interest rates can readily be calculated based on the information provided on the face of the MCAs.”
On Unconscionability
“The MCAs were also procedurally and substantively unconscionable. Substantive unconscionability is clear from the MCAs’ exorbitant and criminally usurious interest rates, among other things. As to procedural unconscionability, it is not dispositive that many, although not all, of the merchants were sophisticated businesspeople and all had prior experience with MCAs, and respondents misrepresented the terms and nature of the MCAs and used other high-pressure tactics.”
deBanked is not a law firm. To understand the implications of this legal decision, consult with attorneys experienced with the subject matter. For example: Hudson Cook, LLP, Murray Legal PLLC, or others listed here.
First Business Bank Promotes Andrew Hendricks To Assistant Vice President – SBA Lending
BROOKFIELD, WI – February 24, 2026 – First Business Bank announces the promotion of Andrew Hendricks to Assistant Vice President – SBA Lending.
Andrew Hendricks brings comprehensive commercial banking and SBA lending expertise to businesses and centers of influence seeking government-backed financing solutions through First Business Bank’s Brookfield office. With experience spanning conventional underwriting, credit analysis, portfolio management, and business development, Andrew helps clients access SBA programs that support business acquisitions, working capital needs, real estate purchases, and expansion initiatives. Andrew’s strong expertise and attention to detail give referral partners confidence in his work and First Business Bank’s Preferred Lender Program status. He guides borrowers through the application process while ensuring clients receive appropriate financing structures for their specific business goals.
Andrew earned a Bachelor of Science in Economics from the University of Wisconsin – Madison.
An SBA-designated Preferred Lending Partner, First Business Bank’s SBA Lending team provides efficient access for businesses to several SBA loan programs, including 7(a) loans, 504 loans, and the International Trade Loan program. The team operates nationwide to assist businesses with various needs, such as commercial real estate purchases, tenant improvements, equipment, working capital, business startup costs, inventory, business acquisitions, and debt refinancing.
About First Business Bank
First Business Bank® specializes in Business Banking, including Commercial Banking and Specialty Finance, Private Wealth, and Bank Consulting services, and through its refined focus delivers unmatched expertise, accessibility, and responsiveness. Specialty Finance solutions are delivered through First Business Bank’s wholly owned subsidiary First Business Specialty Finance, LLC®. First Business Bank is a wholly owned subsidiary of First Business Financial Services, Inc®. (Nasdaq: FBIZ). For additional information, visit firstbusiness.bank. Member FDIC
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View PostCAN Capital Adds Major Equipment Finance Division, New Product for Brokers to Offer
The synergy between the working capital and equipment finance industries continues to grow with CAN Capital’s latest acquisition. CAN acquired the equipment finance portfolio and platform of Republic Bank Finance and the division will continue to operate under the name of CAN Capital Equipment Finance. A press release announced the deal this morning.
CAN’s broker network and referral partners will be able to able to offer this product alongside CAN’s existing product suite.
“CAN has a large and established network of broker relationships, many of whom are already providing an equipment finance option to their small business customers,” said CAN Capital CEO Ed Siciliano to deBanked. “By adding an equipment finance product, we believe we will deepen our relationships and better serve our valued ISOs, especially those already offering this product.”
The equipment finance industry is massive. Recent valuations put it at $1.3 trillion annually.
In the official release, Siciliano said, “This acquisition is a natural extension of CAN Capital’s long-term growth strategy. We have built CAN Capital to be a scaled, durable platform that can grow both organically and through strategic acquisitions. Adding an equipment finance portfolio and platform enhances our product breadth, strengthens our market position, and allows us to serve more businesses with the right capital at the right time. This transaction reflects the momentum of our business and our continued confidence in the growth trajectory of CAN Capital.”
View PostCAN Capital Acquires Equipment Finance Portfolio and Platform
ATLANTA, GA — February 23, 2026 — CAN Capital, a leading provider of access to alternative financing solutions for small and medium-sized businesses, today announced that it has acquired the equipment finance portfolio and platform of Republic Bank Finance, a division of Republic Bancorp, Inc. (NYSE: RBCAA), headquartered in Lexington, Kentucky. The transaction further strengthens CAN Capital’s position as a diversified, growth-focused specialty finance company and expands its ability to serve businesses with flexible, financing solutions.
The acquisition adds a well-established equipment finance portfolio and operational platform to CAN Capital’s existing suite of working capital products, enhancing its ability to meet the evolving capital needs of small businesses across a wide range of industries. Going forward, CAN Capital will leverage its technology, national footprint, robust data and underwriting capabilities, and deep partner ecosystem to scale the equipment finance platform and deliver additional value to customers, brokers, and strategic partners.
“This acquisition is a natural extension of CAN Capital’s long-term growth strategy,” said Ed Siciliano, Chief Executive Officer. “We have built CAN Capital to be a scaled, durable platform that can grow both organically and through strategic acquisitions. Adding an equipment finance portfolio and platform enhances our product breadth, strengthens our market position, and allows us to serve more businesses with the right capital at the right time. This transaction reflects the momentum of our business and our continued confidence in the growth trajectory of CAN Capital.”
CAN Capital has provided access to over $8 billion to small businesses nationwide and supports over 80,000 customers across a broad range of industries, providing access to fast, flexible financing solutions designed to help businesses grow, manage cash flow, and invest in their operations. The addition of equipment financing capabilities allows CAN Capital to deepen relationships with existing customers while expanding its reach to new borrowers seeking equipment-backed financing solutions.
About CAN Capital
Founded in 1998, CAN Capital, Inc. is a leading provider of alternative financing for small and medium-sized businesses. Through a combination of technology, data-driven underwriting, and industry expertise, CAN Capital delivers fast, flexible capital solutions to help businesses succeed. Headquartered in Atlanta, CAN Capital serves businesses nationwide through a robust network of partners and direct channels. CAN Capital, Inc. makes capital available to businesses through business loans made by WebBank, makes equipment financing available through its CAN Capital Equipment Finance division and makes business lines of credit available through providers of that product.
For more information, visit www.cancapital.com.
View PostNMEF Closes $440 Million NMEF 2026-A Securitization
FEBRUARY 23, 2026 [NORWALK, CT] – North Mill Equipment Finance LLC (“NMEF”), a leading independent commercial equipment lender, today announced the successful closing of NMEF Funding 2026-A, a $440 million asset-backed securitization. The transaction marks NMEF’s 11th equipment finance securitization and brings the Company’s total issuance volume to more than $3.5 billion.
A total of 43 unique investors participated in the transaction, including 12 first-time investors, underscoring broad and expanding market confidence in NMEF’s platform and credit performance.
The transaction was nearly 7 times oversubscribed, generating broad-based demand across the capital structure. The depth and quality of participation supported a highly favorable execution relative to both initial price discussions and the Company’s 2025-B securitization, further demonstrating strong institutional confidence in NMEF’s platform.
“We are extremely pleased with the outcome of this transaction,” said Mark Bonanno, President and Chief Revenue Officer of NMEF. “The depth of investor participation and the strength of the order book reflect continued confidence in the quality of our originations, the consistency of our credit performance, and the durability of our platform. We are particularly encouraged by the number of new institutional investors who joined this issuance.”
Mitch Tobak, VP Corporate Development, added, “NMEF is grateful for the continued trust of investors and committed execution by our banking partners. With our strong liquidity position, we are focused on serving our origination partners and bringing high quality paper to the ABS capital markets.”
NMEF Funding 2026-A is collateralized by a diversified pool of commercial equipment finance receivables originated and serviced by NMEF.
About NMEF
NMEF is a premier lender working with third-party referral sources to finance small to mid-ticket equipment commercial leases and loans ranging from $15,000 to $3,000,000 and up to $5,000,000 for investment grade opportunities. NMEF accepts A – C credit qualities and finances transactions for many asset categories, including medical, construction, franchise, technology, vocational, manufacturing, and material handling equipment. NMEF is majority owned by an affiliate of InterVest Capital Partners and is headquartered in Norwalk, CT, with regional offices in Irvine, CA, Fort Collins, CO, Plymouth, MN, Voorhees NJ, and Murray, UT. One of NMEF’s controlled affiliates, BriteCap Financial LLC, is a leading non-bank lender providing small businesses with fast, convenient financing alternatives such as working capital loans since 2003 from its main office in Las Vegas, NV. For more information, visit www.nmef.com and www.britecap.com.
View PostBHG Financial Originations Surge to $6.1B in 2025
“With regards to BHG, that team down there just continues to deliver, you can see that with their performance in 2025,” said Pinnacle Financial Partners CFO Jamie Gregory on the company’s recent Q4 earnings call. Pinnacle owns 49% of BHG Financial. BHG’s average business loan is between $20,000 to $250,000. It also does personal loans. Combined they originated $6.1B in 2025, up from $3.7B in 2024.
Pinnacle has been very impressed with BHG’s performance and outlook going forward.
“I mean we’re talking 25% to 35% growth for the company,” said Gregory. “So they continue to perform. And I go through all that because it just shows that they are focused on their core business. They’re focused on growing it, adding value.”
In the earnings presentation, it says that BHG targets borrowers through direct mail and “other sophisticated marketing techniques using a wide range of proprietary marketing tools.”
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