Assertion Not checkable as stated
Schwartz: 90% of merchant defaults are orchestrated by debt settlement companies
“Nine out of 10 of those deals that go into defaults are not because the merchant is running into issues. They're going in because they get the debt settlement companies call them and say, basically stop paying. We're going to negotiate for less, right?”
Insight
Schwartz: Revenue-based financing should be evaluated by capital cost, not APR
“The better way to look at this is, is the cost of capital. So, you know, I'm getting 90,000 dollars. I got to pay back a 100,000 dollars. My cost of capital is 10,000 dollars. That's the true way to look at this. And cause there is no term and that's really, r…”
Assertion Partly supported
Schwartz: LendingClub operates as consumer lead generation, not direct business funding
“So Lending Club is really not a funder.
It's a lot of them are like kind of lead gen.
So you're, they're gathering, they're telling you they're doing it, and then they send it out.
But Lending Club is not really a business funding.
They do it more personal stu…”
Prediction Not checkable as stated
Schwartz: FundKite targets deploying $300 million in capital during 2024
“That's 300.”
Disclosure
Schwartz: FundKite avoids trucking and bail bondsmen due to industry distress
“There's some industries that we don't cater to at the moment... Like transportation and trucking. They're really in trouble. Those guys are really having a big hard time right now. Getting by. We don't do bail bondsman. So truckers, transportation, and we've p…”
Disclosure
Schwartz: FundKite's receivables discount rate ranges from 10% to 28%
“Typically it can range from anywhere from 10 to about 28% discount. So depending on the risk factors that we're facing.”
Disclosure
Schwartz: FundKite discounts balances for 30-day repayments rather than restructuring deals
“No, we don't restructure them, and I've never seen it explode in a way where they just pay back like that. However, you know, if a merchant comes back in 30 days and says, look, I just want to repay the receivables now, we just give them a discount on the bala…”
Disclosure
Schwartz: FundKite has roughly $30 million per month in funding capacity
“On any given time, our capacity is about thirty million a month.”
Prediction Didn’t hold up
Schwartz: Upcoming 2025 regulations will force unprepared banks to lend to SMBs
“There's going to be some regulation coming out next year where banks are going to be forced to go back and start to lend out to the small businesses, but banks are not equipped to underwrite a small bit.”
Disclosure
Schwartz: FundKite has raised nearly $200M in debt and participation capital
“And so both in debt and participation, almost two hundred million.”
Disclosure
Schwartz: FundKite avoids warehouse facilities and senior credit lines
“We don't have any warehouse facilities or senior lines. We don't take on capital like that, right? We have investment partners that participate in these transactions or these contracts and that's how we structure it.”
Assertion Not checkable as stated
Schwartz: FundKite maintains a 6.8% lifetime write-off rate on its receivables
“Total life average of write off about 6.8% of the receivables we purchase.”
Assertion Not checkable as stated
Schwartz: FundKite recovers at least 50% of receivables in default
“So we recover at least 50% of what goes into defaults or collections.”
Assertion Not checkable as stated
Schwartz: FundKite generated approximately $70 million in revenue during 2023
“Well, we did, I think we did about seventy million worth of revenue last year, give or take.”
Prediction Not checkable as stated
Schwartz: FundKite's eventual acquirer will be a bank or hedge fund
“There's really going to be only two buyers, right? There's either going to be a bank who's going to need, you know, this full setup that can underwrite and fund deals, or it's going to be a hedge fund that's just got an enormous amount of money to put out and …”
Disclosure
Schwartz: FundKite's average deal is $110K for $1M–$5M businesses
“So our average deal size is about a 110,000 dollars. And this, these are companies that are doing between one and five million a year in annual growth sales.”
Disclosure
Schwartz: FundKite models 8- to 16-month paybacks with no fixed terms
“No, I mean, we model anywhere from eight to 16 months, but it's very unpredictable, right? So there is no term, there is no fixed term with our product.”
Disclosure
Schwartz: FundKite processes approximately 5,000 business applications monthly
“We processed last month probably approximately 5000 applications for different businesses, right?”
Disclosure
Schwartz: FundKite issues funding offers to roughly 27% of its applicants
“Out of 5000 applicants,
, we made offers to merchants.
About 27% of those applicants we made funding offers to.”
Disclosure
Schwartz: FundKite increased structured debt note filing to roughly $22.8M
“I did another filing recently. That number went up to like 22.8 or something.”
Assertion Not checkable as stated
Schwartz: 12% to 15% of FunKite portfolio experiences collection issues
“So total total, I think trailing, it's about 12 to maybe 15% of the portfolio going to some type of a collection issue.”
Assertion Not checkable as stated
Schwartz: FundKite operates its platform with only five software engineers
“We have five engineers.”
Assertion Not checkable as stated
Schwartz: FundKite's cost of capital is 12% or less
“12, 12% or less.”
