The Ledger
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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?”
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…”
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.”
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 …”
Schwartz: FundKite has roughly $30 million per month in funding capacity
“On any given time, our capacity is about thirty million a month.”
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…”
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…”
Schwartz: FundKite has raised nearly $200M in debt and participation capital
“And so both in debt and participation, almost two hundred million.”
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.”
Schwartz: FundKite recovers at least 50% of receivables in default
“So we recover at least 50% of what goes into defaults or collections.”
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.”
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.”
Schwartz: FundKite processes approximately 5,000 business applications monthly
“We processed last month probably approximately 5000 applications for different businesses, right?”
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.”
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.”