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New Fintech Improves Access To Capital For Small Law Firms

Vlad Poptamas

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Cheryl Kaufman, CEO of Alliance Legal Solutions
Reading Time: 3 minutes

 

Alliance Legal Solutions launches Fundafi.com, a technology enabled lending platform that improves access to financing for small law firms across the United States.  This move addresses a segment of the market that historically has been underserved by the lending market, by providing loans that are sized and timed to work specifically for small law firms. See client success stories.

Like any business, law firms can only thrive if their business is financially sustainable. However, as with the practice of law more generally, there is increasing pressure on small law firms to focus on marketing, client generation, and technology/productivity efficiencies to increase profitability. Yet small law firms often have unique barriers to addressing these key growth areas.  “This is where Fundafi sees an opportunity to help small law firms position for growth,” remarks Cheryl Kaufman, CEO of Alliance Legal Solutions (d/b/a Fundafi.com).

The United States has more than 250,000 law firms with less than ten employees, and according to a study conducted by the Legal Executive Institute, Thomson Reuters, 71% of these firms reported that their biggest challenges are acquiring new clients and spending an increasing amount of time and money on administrative tasks.  To address these issues, small firms need to wisely deploy additional capital, a resource that is often difficult for small firms to access.

Fundafi’s products allow small firms to access capital by leveraging the value of their cases and parlaying those future fees into collateral for financing. This approach to financing gives law firms greater access to working capital while avoiding the traditional inflexible repayment requirements that fail to match the timeline of a small firm’s fluctuating fee recoveries.

“Law firms, especially contingent-based firms, typically experience uneven cash flows. We are purpose-built to finance that reality,” according to Megan Baer, General Counsel of Alliance Legal Solutions.

The challenges small law firms face are more extreme in contingency-based practices, in which substantial resources are needed to prepay case expenses. Without access to financing options, small firm attorneys often try to bridge cash flow gaps with their own personal resources, an approach that can lead to great personal stress and a vicious cycle of financial fragility. It also foregoes potential legal and tax advantages related to business financing.

Fundafi’s business model can nurture a law firm’s growth much like a private equity firm would do for a business. Fundafi has deep knowledge of small law firm practices gained during 8 years of experience working with thousands of firms. The data collected and analyzed has shaped the underwriting, financing and servicing of loans and led to the development of a suite of products that can optimize client outcomes and drive the continued growth of law practices.

How are capital investments used to build law firm business success?

  • To build their client base by allowing for new marketing and client development opportunities.
  • To invest in technology that increases operational efficiencies.
  • To allow for better and more sophisticated case development.
  • To bridge cash flow gaps while waiting for fees to come in.

Cheryl Kaufman, founder of Alliance Legal Solutions and Fundafi, is an entrepreneur and attorney who works to solve systemic challenges in the legal industry: “Small law firms are the cornerstone of access to justice in our country and it is time for business solutions to evolve to make the practice of law sustainable and viable. It is all about using our data and resources to improve outcomes for these firms and their clients.” Kaufman says, “Fundafi prides itself on providing transparent options and actionable intelligence to small law practices. We built this platform so attorneys could leverage their future receivables to empower success in a way that is customized to each firm’s unique needs

 

SOURCE Fundafi

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Fintech

Wirex Launches Enhanced Cryptoback™

Vlad Poptamas

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Reading Time: 1 minute

 

Today, payments platform Wirex launched a supercharged update of their revolutionary Cryptoback rewards programme. Customers can now earn up to 1.5% back in Bitcoin on Wirex Visa card purchases.

Released in 2018, Cryptoback™ was the world’s first rewards programme that paid out 0.5% in cryptocurrency for all in-store spending with the Wirex Visa card. Thanks to the recent launch of the Wirex Token (WXT), customers can now triple the amount of BTC they earn – making investing in cryptocurrency easier than ever before.

Depending on the amount of WXT held, in-store Wirex card purchases now generate up to 1.5% in Bitcoin. There are three levels of crypto rewards available:

  • 500,000 WXT = 1.5% Cryptoback
  • 100,000 WXT = 1.0% Cryptoback
  • 50,000 WXT = 0.75% Cryptoback

Wirex have calculated that the average UK consumer stands to earn more than £300 in Cryptoback™ every year, just by using their Wirex Visa card for day-to-day spending. Unlike many other cashback programmes, Wirex doesn’t impose restrictions on what customers can do with their rewards. Cryptoback™ can be redeemed instantly into their Bitcoin accounts, or quickly and easily exchanged into fiat for spending.

Enhanced Cryptoback™ is just one of the ways that holding Wirex Tokens allows customers to get even more out of their account. They can also enjoy heavily discounted fees based on the same structure, with access to premium products, merchant offers and airport lounges coming soon. As Wirex co-founder Pavel Matveev explains:

“We created the Wirex Token to be something that provides tangible value and benefits for holders beyond its market trajectory. Enhanced Cryptoback™ is the perfect example of this, as it allows customers to earn and invest in digital currency with a minimum of fuss. We’re looking forward to introducing even more benefits for WXT holders soon.”

 

SOURCE Wirex

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Fintech

Aegis Capital Corp. is pleased to announce its commitment to Equity Research

Vlad Poptamas

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Aegis Capital Corp. continues to expand its equity research platform with the addition of Benjamin Zucker and James Jang. Benjamin joined in May 2019 as Head of Specialty Finance and James joined in June 2019 to head up the Maritime & Special Situations. These new coverage areas will bolster Aegis’ existing research footprint in the Internet/TMT and Healthcare sectors.

Mr. Zucker joined Aegis from BTIG LLC, where he was a Director and lead analyst covering Mortgage REITs and real estate finance companies. Prior to BTIG, Mr. Zucker was a Vice President at JMP Securities LLC where he covered similar sectors. Benjamin began his career in equity research at Pritchard Capital Partners. At Aegis, Mr. Zucker’s coverage will span across several Specialty Finance sub-sectors including Mortgage REITs, Equity REITs, Business Development Companies (BDCs) and Financial Technology firms (FinTech). Benjamin’s current coverage list includes: Medalist Diversified REIT (MDRR), Sachem Capital Corp. (SACH), and Saratoga Investment Corp. (SAR).

Mr. Jang joined Aegis from Maxim Group LLC, where he was a Senior Vice President and lead analyst covering the Industrials, Infrastructure and Clean-Technology sectors. Previously, Mr. Jang was a senior analyst at Sidoti & Co. covering furniture and textiles and was an equity research associate at Canaccord Genuity covering Maritime and Upstream E&P companies. Since joining, Mr. Jang has expanded Aegis’ research platform into the Agriculture, Oilfield Services, and Industrial Technology sectors with coverage of Profire Energy (PFIE), Marrone Bio Innovations (MBII), Yield10 Bioscience (YTEN) and Sigma Labs (SGLB).

Michael Pata Aegis’ Head of Business Development commented: “Hiring Benjamin and James continues to show Aegis’ commitment to equity research, which brings institutional quality analysis to the small and mid-cap universe.”

 

SOURCE Aegis Capital

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Fintech

LexinFintech Announces US$300 Million Private Placement of Convertible Notes with PAG

Vlad Poptamas

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Reading Time: 2 minutes

 

LexinFintech Holdings Ltd. (NASDAQ: LX) (“Lexin” or the “Company”), a leading fintech platform for educated young adults in China, today announced that it has entered into a convertible note purchase agreement with PAG, a leading Asia-focused private equity firm with over US$30 billion in capital under management, pursuant to which the Company will issue and sell convertible notes in an aggregate principal amount of US$300 million to PAG through a private placement. The private placement is subject to satisfaction of customary closing conditions and is expected to close on or around September 16, 2019. The gross proceeds raised from this placement will be approximately US$296.4 million.

The convertible notes will mature in seven years, bearing interest at a rate of 2.0% per annum. The notes will be convertible into fully paid Class A ordinary shares of the Company or ADSs at a conversion price of US$14 per ADS at the holder’s option from the date that is six months after the issuance date.  The holder of the notes will have the right to require the Company to repurchase for cash all or any portion of the notes on the fourth anniversary of the issuance date.

At closing, the Company will appoint to its Board of Directors one person designated by PAG.

Mr. Jay Wenjie Xiao, Founder, chairman and chief executive officer of the Company, said, “We are excited to have PAG as our new investor. This investment will enable Lexin to further develop and enhance our consumption-based ecosystem, improve product offerings to our educated adult customers, continue to invest in technology, build up additional consumption scenarios, and provide more consumer benefits to our customers.”

“PAG has a strong commitment to and deep understanding of China’s financial services industry, and we have a demonstrated track record of seeking out and engaging with the industry’s leading companies,” said PAG Chairman & CEO Weijian Shan. “Lexin has an unparalleled platform for meeting young consumers’ credit needs while strictly controlling and minimizing credit risks, which makes it unique, and we are looking forward to supporting the company as it embarks on its next stage of growth.”

Goldman Sachs (Asia) L.L.C., BofA Merrill Lynch and China Renaissance acted as the private placement agents to Lexin on the transaction.

 

SOURCE LexinFintech Holdings Ltd.

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