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Wall Street Funding – Rollover August 2022 – Investor Interest Survey

Since you first invested in our note program with Wall Street Funding (“WSF”), the company has grown its merchant cash advance brokering and funding volumes. WSF is interested in rolling over its existing Percent notes. (Read below for more on the company’s recent developments.)

As an existing investor in WSF’s note program, we would like to gauge your interest in the following rollover options (i.e. these new investments would replace existing investments in WSF’s note program):

Indications of interest above are preliminary and non-binding.

About Wall Street Funding

  • WSF funded $39.3 million in merchant cash advances (“MCAs”) in Q2 2022, compared to $31.2 million in Q1 2022 (26% quarterly growth) and $16.7 million in Q2 2021 (135% annual growth).
  • Outstanding healthy merchant cash advance payback amount (“RTR”) stands at $67.8 million on August 1, 2022, compared to $55.7 million three months ago (22% quarterly growth) and $28.8 million twelve months ago (135% annual growth).
  • Big Think Capital (“BTC”) a co-borrower under the loan agreement, generated $2.8 million in net income on $9.6 million of revenue in 2021, as compared to $0.5 million in net income on $3.3 million of revenue in 2020 (profit and revenue up 460% and 191% respectively). In the first 7 months of 2022, BTC has already matched its full-year 2021 revenues.

WSF has accomplished this while maintaining portfolio performance:

  • As of August 1, 2022, 93.6% of advances are current while 1.3% of the portfolio balance is over 60 days past due, per Percent’s surveillance reporting available here.
  • The percentage of obligors actively repaying has generally been above 90% since the initial stages of the Covid-19 recovery in the summer of 2020.
  • WSF is currently experiencing a 3-month weighted average collections rate of 96.09%, according to the July 26, 2022 report for its SPV credit facility. This compares favorably to a minimum trigger level of 88.00%. During the most recent remittance period, the collections rate was 96.71%. The trigger related to a single remittance period is 85.00%.

Other milestones have also been achieved along the way:

  • Recently, WSF formally launched Onyx IQ, a cloud-based lending software, with 5 clients so far and 75 projected in 12 months. Onyx IQ’s SaaS licensing fee structure starts at ~$2,500/month per user (with opportunities for cross-selling lifting expected revenue per client to ~4,500/month).
  • Percent completed a collateral verification of Wall Street Funding’s MCAs with our partner MTAG. There were no negative findings from that review. That report is available here.
  • WSF had completed a financial audit of Global Merchant Cash, Inc. (its MCA funding vehicle) for 2020 and 2021.

As part of refinancing of the existing WSF corporate notes outstanding, Percent plans to offer both a 9-month and a 24-month investment offering. The latter will likely have a minimum investment size of between $100,000 and $200,000 due to the nature of the offering’s structure and related regulatory constraints that limit total investors to 99.

To continue growing its business in the remainder of 2022 and into 2023 and beyond, WSF plans to secure a new SPV credit facility that will allow it to deploy a larger funding commitment at a cheaper cost of capital than its existing credit line provides.

To indicate your interest, please answer the questions in the survey above.

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