ORIGINATOR PROFILE
Quicksilver Capital
Quicksilver Capital (“Quicksilver”) has provided innovative financing solutions to small businesses since 2008. The credit crisis spurred small business owners to seek alternative forms of financing and Quicksilver has successfully stepped into that role. Based in New York, Quicksilver has assembled a team with more than 30 years of experience in financing, sales and merchant services.
Quicksilver’s pipeline of merchant cash advances (“Advances”) is supplied by multiple sources. The sourcing of Advance opportunities is driven by ISOs. On average, Quicksilver pays a commission of 7% to 8% on the funded amount on ISO related Advances. Quicksilver services all its Advances internally and that includes its in-house effort to renew Advances that have repaid 55.0% of their amount due. Quicksilver renews approximately 45% of its Advances which includes a complete re-underwriting according to its credit standards.
Diligence Process
Quicksilver develops a credit and financial profile for each potential Merchant. In aggregate, these profiles provide Quicksilver with a holistic view of a merchant which allows Quicksilver to make a credit decision and offer appropriate terms according to established underwriting guidelines. The credit profile starts with gathering basic information on the business owner(s) and business itself. The information is entered into an online form that is automatically submitted to the credit agency Experian for analysis. The consumer and business data metrics reviewed consist of both Quicksilver gathered information and the Experian analysis.
The credit profile forms the basis of whether terms are offered to a merchant and if so, at what factor rate and duration. A less attractive merchant credit profile will either disqualify the merchant from an Advance or result in a high factor rate over a short duration. Quicksilver uses the rate and duration as a mechanism to risk adjust its Advances. As such, a more attractive merchant is more likely to be offered a low factor rate at a longer duration. Quicksilver also verifies the existence of the merchant as a protection against fraud. An online search of the merchant is conducted in conjunction with a request for premises photos and in some cases a third-party site visit. Quicksilver’s underwriting guidelines broadly divide merchants into three programs based on their credit profile which ultimately results in the type of terms offered.
The financial profile consists of a brief analysis of the business’ performance. Typically, the Originator will look at a business’ last three months of revenue to determine not only the size of the Advance but also to ensure the revenue is adequate to support the Advance’s repayment. Quicksilver requests bank statements or any other third-party document to verify the business’ revenue numbers. For seasonal businesses or businesses in seasonal locations like Florida, the Originator may request a monthly breakdown of revenue over the last 12-months.
Portfolio Metrics and Performance
Quicksilver has provided in excess of $175M of capital over 8,500 Advances in its latest portfolio. On average, the Originator’s Advance terms are a 1.42x factor rate over 206 days which is a little longer than seven months. On a daily basis, Quicksilver’s automatic deduction from its merchants’ bank account represents 18.2% of the merchants’ estimated daily gross sales.
Of Quicksilver’s historical collections 74.1% of Advances were collected in full. The remaining Advances, that were not collected in full, were considered defaulted and represented 25.9% of Quicksilver’s settled Advances. Of the defaulted Advances, Quicksilver collected on 66.8% of the principal amount which results in an overall 8.8% principal loss rate since inception. Quicksilver’s effective factor rate, after taking into account defaults, is 1.20x over an average of 214 days and the historical IRR for settled Advances is 88.6% since each Advance collects principal repayment and fees on a daily basis.
Management
Michael Puderbeutel
Chief Executive OfficerMr. Puderbeutel founded Quicksilver (formerly Max Advance) in 2007. Since that time, Mr. Puderbeutel has spent considerable time refining the company’s underwriting, collection, sales and operating guidelines as well as establishing foundational policies and procedures. Mr. Puderbeutel personally, developed and fostered the Company’s independent sales organizations (“ISOs) and created proprietary merchant relationship management and payment tracking software. Additionally, the company has purchased over $50.0M of non-performing assets with over 6,000 debtors from various financial institutions. Formerly, Mr. Puderbeutel founded Parkstone Capital, an owner and manager of over 5,000 multi-family units and 200,000 square feet of retail space across the United States.
Anthony Porrata
Senior Vice President of Underwriting & Risk ManagementMr. Porrata joined Quicksilver (formerly Max Advance) in 2008. Prior to joining the company, Mr. Porrata spent eight years at Heller Financial as a senior credit analyst and two years at HSBC in Latin America where he was responsible for credit review of the bank’s asset-based lending portfolio. Mr. Porrata’s first experience in merchant cash advance came after four years of service as a Naval Officer. As a member of that newly formed merchant cash advance company, Mr. Porrata spearheaded the company’s growth to 6,000 merchant accounts and over 100 employees.
Ruben Leibowitz, CPA
Chief Financial Officer & ControllerMr. Leibowitz was appointed CFO/Controller of Quicksilver (formerly Max Advance) in 2010. Mr. Leibowitz has over 20 years combined experience in public accounting and accounting systems implementation. Having been exposed to a wide variety of businesses, Mr. Leibowitz brings the necessary skills to oversee the day to day financial operations as well as planning for the long-term growth of the company.
Ivan Quezada
Vice President of Business DevelopmentMr. Quezada joined Quicksilver (formerly Max Advance) in 2010 to lead their business development and ISO relationship department. For the past 15 years, Mr. Quezada has held various positions with several major merchant processing companies in New York City servicing different types of merchant processing accounts.
2 Represents an net annualized return, using an internal rate of return (IRR) methodology, with respect to the matured investments shown in your Portfolio experience, utilizing the effective dates and amounts of subscriptions and distributions to and from the investments, net of management fees and all other expenses charged to the investments.[read more]