In The News

eProdigy’s ACHBanking processor available as iPhone app


August 31 bloomberg.com

eProdigy’s ACHBanking, a Processor Serving the Alternative Lending Industry, Is Now Available as an iPhone Mobile App


August 26 reuters.com

Christopher Keane Moves to eProdigy, is Named Director of Underwriting


August 13 marketwatch.com

ISO & Agent: The Changing MERCHANT CASH ADVANCE Landscape


July 13 www.paymentssource.com

ISO & Agent: Q&A with eProdigy CEO David Rubin


July 13 www.paymentssource.com

Fintech Provider and Alternative Lender eProdigy Closes $100M Commitment from Single Private Equity Firm


July 2 www.crowdfundinsider.com

ACHBanking Gateway Adds Foreign Money Transfer Screening


July 2 www.paymentssource.com

David Rubin, CEO, eProdigy, New York


July 1 www.business-superstar.com

eProdigy Sources $100M Loan to Expand Alternative Finance Lending


June 29 www.financemagnates.com

COMMENTARY: Common Errors in Merchant Funding And How To Fix Them


June 24 digitaltransactions.net

Another Week, Another $2.1B (and eProdigy’s $100M Pick-Up)


May 27 pymnts.com

Orchard: A Single Investor Just Committed $1 Billion to a Marketplace Lending Platform


April 30 orchardplatform.com

How To Drink From the Fire Hose of Data


May 07 digitaltransactions.net

Getting a Merchant Cash Advance Is Easy But Repayment Can Be Onerous


April 24 entrepreneur.com

SME’s to Benefit from eProdigy’s Paypal Integration


April 15 PYMNTS.com

Capital Stack Adopts New Brand name


April 14 greensheet.com

Brian Stulman Joins eProdigy as Executive Vice President


April 9 Global Investing Today/EIN News

eProdigy Launches Processing Gateway-ACHBanking


March 31 greensheet.com

eProdigy Launches 3rd Party Processing Gateway, ACHBanking, Providing Payments Rails and Next Day Funds Availability To Alternative Lenders


March 31 New York Business Journal

eProdigy Launches 3rd Party Processing Gateway, ACHBanking, Providing Payments Rails and Next Day Funds Availability To Alternative Lenders


March 31 San Francisco Business Times

Capital Stack – Merchant Cash Advance, Visionaries and Q&A


April 24 isoandagent.com

Peer Monitor Index, Capital Stack And New Drug Sentencing Policies – Podcast: August 2013


August 27, 2013 legalcurrent.com

Getting a Merchant Cash Advance Is Easy But Repayment Can Be Onerous

 

A Merchant Cash Advance is a short-term advance of funds against a business’s receivables. To pay it back, a fixed debit, or in the case of some companies, a percentage, is taken directly off each sale daily or weekly. The Merchant Cash Advance business is a whole new industry that is booming, mainly because bank lending criteria have become so tight since the Great Recession that very few small businesses are able to qualify for bank loans.
Sometimes a cash advance is genuinely necessary, but it’s important to know when to pull the trigger, and when not to. Whether the cash advance comes from a credit card or a Merchant Cash Advance, this facility is best used as a stopgap when there’s an expected increase in revenue. For example, if you’re a contractor and, in order to win a bid on a $500K job, you need to have upfront money for materials and labor. Or you’re opening a retail location and need to buy inventory.

There are countless other examples that a small business owner needs capital to create growth: a new restaurant needs funds for inventory or salaries, a florist brought in last minute to create arrangements for a massive event, a dentist or doctor buying a piece of  equipment and is able to get a new income stream from the diagnostic tests.

These are all examples where an increase in income is anticipated. Business is basically good and growing, even amid a bumpy and unpredictable cash flow, but you can’t fund the capital outlay with your working capital. When the business needs the funds short-term to generate more revenue or cash flow it makes sense to take a short-term advance to secure that business growth.

You see these enticing offers: no paperwork, five-minute application, borrow up to $100K. Yes, $100K right now could solve a lot of problems. But the rule of thumb is that unless you’re using it to generate the new income stream that pays back the advance, it could create bigger problems than it solves. More succinctly stated: don’t use this instrument to fill a hole that creates an even bigger one.

To decide whether or not to take one, ask yourself these questions:

  • Will this help me win more business?
  • Will this help me grow my business?
  • Will this enable me to buy a new piece of equipment that generates cash?
  • Do I absolutely need the money right away?

 

And in terms of your ability to pay it back:

  • Can I generate the sales I need, so that I won’t feel it when a percentage (or fixed sum) is taken out of every credit card swipe?
  • Can I pay my other bills if I’m losing a percentage (or fixed sum) off the top of my sales?
  • How long can I go without missing this percentage or fixed sum being taken off each sale I make. Am I reasonably sure I can go the entire length of the expected payback period?
  • Do I put through a high volume of credit card transactions?

 

The price of a cash advance is significant. The cost of funds could be anything from 20 Percent to 40 percent on the advance, depending on your credit score and other risk factors. However, this is offset by the fact that the instrument provides some real, tangible advantages to small businesses – the application process is simple, funding decisions are made quickly, you’ll receive the funds in hours or days, not weeks.

Moreover, and you can still get funded at a range of credit scores, starting in the low 500s if other mitigating factors check out. In addition, payback is incremental, so the cost of funds is not so keenly felt. Payments are automatic, there are no checks to write, you don’t have to remember to remit a payment. And with some Merchant Cash Advance firms, there is transparency in the form of daily reporting, daily ledger and history. Also, there’s a huge difference between taking an advance and, say, using a factoring service, where the factor lays claim to all the receivables, and you receive “what’s yours” after the factoring company has been paid “what’s theirs.”

There are many providers of merchant cash advances, so you should perform your due diligence. Try to avoid hidden costs. If you use a broker, make sure they don’t charge you — your best bet is to go through a direct funder or a broker that is paid by a direct funder. You should also look for flexibility in the payback terms in terms of weekly vs. daily remittances, fixed daily debit; and some funders offer fixed gross percentage, so that payback can be more flexible and based on your cash flow levels.

Bottom line, if you’re generating enough cash, and with the right volume of increased sales, this financial tool can make good sense. But you have to be sharp and informed to use it successfully.

eProdigy Integrates Quickbooks, PayPal and Authorize.net Into Its Direct Funding Platform

Безымянный

New York, NY — April 14, 2015

eProdigy Integrates Quickbooks, PayPal and Authorize.net Into Its Direct Funding Platform

NEW YORK, April 14, 2015 — eProdigy, a fintech holding company of several subsidiaries in the alternative finance industry, announced today that it has successfully integrated QuickBooks, PayPal and Authorize.Net feeds into its approval process, making way for unprecedented speed and ease of decisions and delivery of funds to small and mid-sized businesses applying for working capital.

While conventional lenders’ approval processes rely heavily on credit scores to make decisions, companies like eProdigy have harnessed technology to determine a business’s ability to repay an advance through its ongoing electronic transactions. A company’s QuickBooks account, for example, can show incoming and outgoing funds in a business account — income, payments, merchandise-in-stock or other assets, etc. Payment products like Authorize.Net and PayPal can help both the merchant and the funding in sending and receiving seamless payments.

eProdigy CEO David Rubin notes, “Technology can play a huge role in determining whether or not to extend credit to a given company. The most innovative systems in the industry are tapping into data sources that weren’t available previously, yet provide critical insight into the creditworthiness of a given business entity. Federal data, shipping volumes, and even social media feeds; combined with feeds from QuickBooks and systems like PayPal and help us get a deeper picture to quickly make the determination between good and bad risks. The ideal is to provide a 5-minute paperless decision, and our technology’s role is to rapidly crunch the data points in a way that goes beyond the stringency of a paper application.”

eProdigy has been providing alternative finance products to businesses since 2010. Noted for its speedy and technologically advanced approval and delivery processes, the company can help merchants assess the best product for their needs, and get them the capital they need to grow their businesses.

About eProdigy

eProdigy services to the alternative finance industry through proprietary online platforms. We work with funders, ISOs, syndicates and brokers to provide comprehensive tools that allow our partners to manage their deals seamlessly. eProdigy is redefining the way small and midsized businesses access working capital with technology that offers merchants a five minute decision and same day funding. Our companies include: Capital Stack, 1Workforce, ACH Capital, eProdigyACH DBA ACHBanking, eProdigy Loans, and Daily Funder.

For more information, please visit http://www.e-prodigy.com.

 

Download PressRelease.pdf

Brian Stulman Joins eProdigy as Executive VP

Безымянный

New York, NY — April 9, 2015

Brian Stulman Joins eProdigy as Executive VP

New York, NY — eProdigy LLC, a fintech holding company specializing in alternative lending, has appointed Brian Stulman as Executive Vice President. Brian will be overseeing all aspects of eProdigy from operations to underwriting, but will be focused mainly on operations. Mr. Stulman, now 47, has been in the alternative lending business almost since its inception 14 years ago, most recently as National Director of Business Development at Next Wave Funding, where he oversaw all business relationships and sales with Independent Service Providers (ISOs) and merchants. At eProdigy, he will manage all distribution channels, internal systems, internal and external sales, with the goal of managing and optimizing deal flow.
Notes Stulman: “I was attracted to the long-term growth potential, being able to take eProdigy all the way to becoming a major player in this industry. eProdigy has the technology, knowledge and relationships—and with the proper nurturing, will become a leader in this space.”

David Rubin, CEO of eProdigy, adds: “We wanted to add Brian’s organizational skills into the mix—particularly his proven skill at strategic planning. This latest addition is the last piece of the puzzle for eProdigy from a management perspective – Brian fits the bill perfectly. He’s the right person to oversee operations, whether retail or wholesale, help with product launches and develop loan programs.”

The key differentiator for eProdigy, Stulman believes, is its cutting edge technology. “The technology is a game changer. It’s a multiplier for how we can write business – essentially it transforms eProdigy from being competitively price-driven to being able to drive technology for the industry, and get us into places we couldn’t go strictly on price point—notably, the ability to provide a level of service that expedites deals and makes it as easy as possible for the customer,” he notes.

Technology removes a giant hurdle to underwriting and servicing—it adds speed, transparency, and allows scaling without a commensurate increase in staff. Notes Rubin, “It allows us to put a level of control in the broker’s hands. It gives them speed, which allows them to make their deals right at the point of sale, rather than having to come back or reach the merchant later on the phone. It’s powerful.”

Specifically, Stulman wants to build out both distribution channels, internal and external sales divisions, “in a major way. We want to control as much deal flow as we physically can.” He sees the business building to five times its current capacity in the next year. He has watched the industry go “from zero to a billion dollar industry just in the last 3 years. It went from one player to hundreds of players. There are new funders popping up every single day.”

“This industry needs the technology we’re putting out there,” agrees Rubin. “From the merchant’s perspective, they need good, fair time frames, they need to be funded fast, and they need to be treated fairly, with better customer service.”

About eProdigy

eProdigy provides a suite of services to the alternative finance industry through a proprietary online platform. We work with funders, ISOs, syndicates and brokers to provide a comprehensive servicing tool that allows our partners to manage their deals seamlessly. eProdigy is redefining the way small and midsized businesses access working capital with technology that offers merchants a five minute decision and same day funding. Our companies include: Capital Stack, 1Workforce, ACH Capital, eProdigyACH DBA ACHBanking, eProdigy Loans, and Daily Funder.

For more information, please visit http://www.e-prodigy.com.

 

Download PressRelease.pdf