An anonymous source informed Lending-Times that Strategic Funding Source, Inc. was in the midst of acquiring CAN Capital when, toward the end of closing, the deal’s bottom fell out. The source inferred that the company was relying on an inexperienced in-house team to perform due diligence. The team allegedly overlooked software subscriptions and failed to estimate the number of personnel required to maintain them.
To add to the challenges, Strategic Funding Source had a crew working on their headquarters building and they struck a water main drenching five floors including the server room, the source said.
“Unfortunately, in order to save money, they did not have a disaster backup plan in place,” he said.
In November 2016, CAN Capital replaced three executives after a review discovered that some assets weren’t performing as well as expected. The company also identified some of its collections processes that needed improvement.
Prior to that in the same year, the company hit a few milestones that include delivering $6 billion of working capital to U.S. small businesses, won the Silver Stevie award in the “Company of the Year” Banking & Financial Services category of the American Business Awards, and named to Inc. 5000 List for the fourth consecutive year. CAN Capital was founded in 1998 and is headquartered in New York City.
Also headquartered in New York City, Strategic Funding Source was founded in 2006. In January, the company integrated Capify, a merchant cash advance company, into its platform.
Lending-Times has reached out to both CAN Capital and Strategic Funding Source for comment. We’ll provide an update should they respond.