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Capital Plus Financial / Crossroads Systems

Lender or loan platform

PPP · PPPLF
Type
Company or group
Role
Lender or loan platform
Programs
PPP, PPPLF
Updated

The profile

Individuals and companies whose conduct was challenged or called into question during or after the pandemic. See sources: House fintech report, Dec. 1, 2022

  • Type: SBA-approved Community Development Financial Institution (CDFI) + B-Corp residential-mortgage lender owned by a publicly quoted holding company. Capital Plus was the named lender for the Blueacorn agent channel and, by loan count, one of the two largest PPP lenders in the country in 2021.
  • Legal entities: Capital Plus Financial, LLC (Texas; the operating lender). Crossroads Systems, Inc. (Delaware; the holding company; OTCQX: CRSS), renamed Crossroads Impact Corp in 2022. CIK 0001093207 was canceled after Crossroads deregistered following its 2017 prepackaged Chapter 11, so the FY2020–FY2021 financials are OTC disclosure statements posted to the company's own site, not SEC EDGAR filings.
  • HQ: 8214 Westchester Drive, Suite 950, Dallas, TX (Crossroads/Capital Plus). Capital Plus's lending operations are routinely listed at Bedford, Texas. The same building houses Harbour Portfolio Advisors (suite 635), Charles A. Vose III's contract-for-deed operation. Vose, personally and through Southwest Federated, Inc., was one of Capital Plus's larger early shareholders.
  • CEO: Eric A. Donnelly, CEO of Capital Plus since 2014; CEO of Crossroads since December 2017; still CEO of Crossroads Impact as of mid-2026.

In the archive

Pandemic-role map

  • Reader shorthand: CDFI lender of record for the Blueacorn channel; subsidiary of a publicly quoted holding company.
  • What Capital Plus did for borrowers: approved and funded PPP loans under its SBA authority, with heavy concentration in very small loans routed through Blueacorn's online application funnel.
  • What Capital Plus bought from other companies: bought borrower acquisition and application-processing capacity from Blueacorn and other channel partners; used PPPLF liquidity to finance the loan book.
  • Where responsibility sat: Capital Plus was the SBA lender of record and booked the gross SBA processing fees; Blueacorn controlled the borrower-facing intake and received a large share of those fees as agent/LSP compensation.

Before the pandemic (1992–early 2020)

Capital Plus traces its lineage to a Texas mortgage company founded in 1992. The modern entity, Capital Plus Financial, LLC, was assembled in 2014 when CFO Farzana Giga (then running a private-equity fund "focused on residential seller financing") partnered to acquire the original "Capital Plus Inc." and re-form it as a CDFI-certified single-family mortgage lender for predominantly Hispanic Texas buyers. Donnelly, hired in 2012 from a small-balance commercial-real-estate finance background, was promoted to CEO in 2014. The book was small: roughly $130 million of single-family mortgage assets, FY2020 total revenue ~$36.6 million, FY2020 net income $3.65 million, FY2020 cash EPS $0.74.

Crossroads Systems, Inc. was a legacy Austin data-storage and IP-licensing company (NASDAQ: CRDS). It ran a prepackaged Chapter 11 in 2017; 210 Capital, LLC, the Dallas vehicle of Robert H. Alpert and C. Clark Webb, took control with a $4 million / ~49.5% investment. NASDAQ deregistration (Form 15-12B) was filed September 14, 2017. On December 18, 2017, Crossroads acquired 100% of Capital Plus Financial; sellers received $30.8 million cash plus 2,955,028 new shares (~49.5% of the reorganized common). Donnelly became CEO of both.

Sellers included Donnelly (532,838 shares via EDUCM, Inc.), Giga (432,931 personally + 557,255 via Westchester Standard, LLC), Mark Crockett (466,233), and Charles A. Vose III, who took roughly 699,000 shares (299,722 personally + 399,629 via Southwest Federated, Inc.) for an 8.1% stake. Vose is the founder of Harbour Portfolio Advisors, a Dallas firm that bought foreclosed homes after 2008 and resold them on contract-for-deed terms. Harbour was the subject of a 2016 New York Times investigation ("Market for Fixer-Uppers Traps Low-Income Buyers") and a June 23, 2020 CFPB consent order (Docket 2020-BCFP-0004). The order's deceptive-practices and credit-reporting violations ran against Harbour's servicers, National Asset Advisors and National Asset Mortgage, with Harbour paying $25,000 and the servicers $10,000. Harbour was also the subject of a Pennsylvania AG enforcement settled August 2, 2021 for $500,000 in restitution and a permanent ban on Vose's companies doing residential real-estate business in the Commonwealth. Vose's entity Southwest Federated, Inc. was also Capital Plus's landlord, described in Crossroads' own disclosure as "a related party through common ownership."

During the pandemic (March 2020 – 2023)

Crossroads Systems, the parent of Capital Plus Financial, had a $121.4 million mortgage portfolio in April 2020 and reported 27 full-time employees for fiscal 2020. For fiscal 2021 it reported 34 employees and $868,422,947 in PPP fee income.

The borrower year (2020)

The first PPP loan the company handled was its own. In the quarter to April 30, 2020 it moved staff to remote work, called mortgage borrowers about forbearance, and reported that "a PPP loan was quickly secured, and the company remains at full employment. The company expects its PPP loan to be fully forgiven." The loan was $376,800. The SBA data record it as approved on April 13, 2020, from Simmons Bank, for 28 jobs at Capital Plus's Bedford, Texas address, and mark it paid in full with no forgiveness amount. The audited statements say it "was repaid in full during the year ended October 31, 2022," and date the loan July 31, 2020, a quarter after it first appeared on the balance sheet.

Customer relief took the form of 60-day forbearance agreements: 159 in the fiscal second quarter, 73 in the third and 2 in the fourth. That came to 234 borrowers and $23.5 million of unpaid principal, at a cost to interest income of about $412,000. By October 31, 2021 none remained in place. The company's 2020 social impact report says 98.4% of its borrowers kept their homes during the pandemic. Home sales fell to $6.4 million in the spring quarter, from $7.4 million a year earlier, "amid the Covid-19 shelter in place order." The CDFI Bond Guarantee Program carried the company's 2020 application into 2021 so that it could assess COVID-19's effect on single-family housing.

The lender year (2021)

The second-draw PPP gave CDFIs a head start in January 2021. By the end of February, Capital Plus reported $65.6 million in loans, with $6.4 million more pending, to more than 1,200 businesses, averaging $58,000 to firms with an average of seven employees. Then Blueacorn's sole-proprietor applications arrived. On June 14 the company reported 472,036 loans approved at an average of $16,062, and its next shareholder letter called that "$7.6 billion in funding." In September the count became 389,254 loans "issued and approved," with "an additional 82,782 applications ... withdrawn." The two figures add up to 472,036. A 2022 filing puts the amount funded at "approximately $6.3 billion." The SBA data list 395,359 Capital Plus loans, all approved in 2021, for $6.21 billion.

The July letter called the approval process "an incredibly secure one" and said: "we would rather have frustrated applicants than fraudulent borrowers." The September letter said: "not a single one of the applicants we have worked with has been turned away." In December a borrower, Eric Greathouse, sued in federal court in Arkansas for himself and a putative nationwide class of borrowers whose loans the SBA had approved but who, the suit alleged, never received the money. The company denied wrongdoing. The court dismissed the case on July 19, 2022 for lack of personal jurisdiction, and Greathouse and others filed a new suit in the Northern District of Texas on August 9, 2022.

The fiscal 2021 income statement that booked the PPP fees also shows a $20,798,948 employee and management bonus, 5.4 times the year's $3,841,942 in salaries and wages. The Item 11 pay table in the Crossroads FY2021 Annual Disclosure Statement lists bonuses of $8,899,474 each to Donnelly and Giga; the rest of the total is a $3,000,000 management-bonus accrual. The July letter referred to "the windfall associated with the PPP loan program" and announced the special dividend of $40 a share. The same letter said the company had been "invited to withdraw" its bank application to acquire Rice Bancshares. In October 2021 the company received a $1,826,265 grant from Treasury's CDFI Rapid Response Program, created "to aid CDFIs affected by COVID-19." That was 0.21% of the year's PPP fee income.

The Blueacorn partnership: January 11, 2021

Crossroads issued a PR Newswire release on the same day SBA reopened the PPP portal under the Economic Aid Act's CDFI-first two-day exclusivity window. The release framed Capital Plus as "continuing to address potential barriers to accessing capital for minority and underserved communities by partnering with Blueacorn"; Blueacorn was a Scottsdale company founded in April 2020 by Nathan Reis, Stephanie Hockridge, James Flores, and CTO Noah Spirakus. Blueacorn's "easy-to-use application wizard … automatically completes and submits all necessary documentation directly to the lender" routed applications to Capital Plus under a Lender Service Provider Agreement. Capital Plus held the legal underwriting and BSA/AML/KYC duties; Blueacorn was its agent.

Under the Economic Aid Act's lender-fee schedule, every loan ≤ $50,000 paid the lender the lesser of 50% or $2,500. Capital Plus's blended average loan size came in around $16,062, above $5,000, so the $2,500 cap applied to most loans.

The volume

The March 2021 SBA rule change letting Schedule C sole proprietors size PPP loans on gross rather than net income preceded the volume. Capital Plus reported 472,036 PPP loans approved at an average of $16,062 ($7.6 billion by its own count); it later said 82,782 of those were withdrawn applications and put the amount funded at about $6.3 billion. The SBA data list 395,359 Capital Plus loans for $6.21 billion. As of April 11, 2021 it ranked #1 nationally by loan count (360,238 at the time). To fund the disbursements, Capital Plus drew approximately $6.4 billion on the Federal Reserve's PPP Liquidity Facility (PPPLF) at the program's 0.35% rate, with the underlying PPP loans pledged at face value and non-recourse. As loans were forgiven, the SBA repaid the principal and the PPPLF advance retired.

The fees (FY2021, year ended October 31, 2021)

  • Total revenue +2,446% to $932.7 million (from $36.6M). Excluding PPP, revenue was $34.9M.
  • Gross PPP processing-fee income: $868.4 million. Of that, $628.1 million was paid back out as "PPP processing fee expense": the fee split to lead-gen/LSP partners; Blueacorn's cut from Capital Plus was roughly $385 million, with the balance flowing to other channel partners. Net to Crossroads: ~$240 million.
  • Operating income +4,127% to $243.4 million; net income $195.4 million (from $3.65M); cash EPS $36.27 (vs $0.74). Year-end cash was $430.4 million (from $2.1M).
  • A Q4 GAAP adjustment deferred $69 million of previously-booked PPP income (to be re-recognized as the loans were forgiven), swinging Q4 to a reported operating loss of $73.8M. The adjustment was non-cash. (Crossroads FQ4 FY2021 earnings release)
  • On the 86,521 loans referred through Womply's Fast Lane, Capital Plus earned $186,882,948 (~$187 million), the figure pleaded in the Womply fee suit.

The dividend, July 26, 2021

Mid-2021, Crossroads declared a special dividend of $40.00 per share (record date ~July 19; payable July 26, 2021). On 5,971,994 shares outstanding that is $238,879,760, paid in cash to shareholders including Donnelly, Giga, Vose, Crockett, and Clements. Donnelly's FY2021 compensation was $9,249,474 ($350,000 salary + $8,899,474 bonus); Giga's was $9,199,474 ($300,000 salary + $8,899,474 bonus). The Item 11 pay table puts both payments in its Bonus column and shows "N/A" for option awards.

Forgiveness (2022–2023)

About 73% of the loans had been forgiven by January 31, 2022. By July 31, 80% of loan volume had been forgiven and $1.2 billion was still outstanding, with $1,260,012,462 still owed to the Federal Reserve's PPP Liquidity Facility. From January 2022 the company's disclosures stated that "Congress and the Department of Justice are investigating paycheck protection program lending, including the Company's subsidiary, Capital Plus Financial," and that it was cooperating. On August 28, 2023, the SBA told Capital Plus it had concluded its review "with no material adverse findings."

After the pandemic (mid-2021 – present)

Acquisitions and financing (2021–2022)

  • September 14, 2021: Crossroads signs an advisory agreement with Enhanced Capital Group (the impact arm of P10), targeting >$250M of impact-asset infusion over 12–18 months at a >20% ROE; Thiruvendran "Thiru" Vignarajah (former Maryland Deputy AG; ex-DLA Piper) is named CEO of Capital Plus. Donnelly moves up to run the parent.
  • September 24, 2021: Crossroads acquires Rise Line Business Credit, LLC (asset-based lender; $2M–$15M facilities). Cash $10,079,046. Closed.
  • December 16, 2021: Crossroads announces an "agreement in principle" to acquire Fountainhead SBF / Commercial Capital (Chris Hurn's non-bank SBA lender; #6 PPP lender; a Womply partner bank). Terms undisclosed; closing pending SBA consent. The deal appears never to have closed. Fountainhead continued independently under Hurn, who wound it down in Q1 2023 and now runs Phoenix Lender Services.
  • 2022–2023: the audited FY2023 statements list Treasury's CDFI Bond Guarantee Program among the programs Capital Plus participates in (FY2023 audited statements).
  • July 11, 2022: $180 million equity investment from funds managed by P10, Inc. and Conversant Capital, LLC at $10.76/share, with the option to commit up to $310 million more (~$490M total) within 120 days, alongside an expanded relationship with Enhanced Capital and a "finalizing" $150 million debt facility led by Texas Capital Bank at BSBY + 300 bps. Per the audited FY2023 financials, the deal was two agreements: a $65M P10 common-stock purchase (6,040,892 shares, proceeds restricted to impact loans) and a redeemable Conversant tranche at $10.76 (carried at $73.6M / 6.84M shares at Oct 31 2022, growing to $128.0M / 10.69M shares at $11.98 by Oct 31 2023). The "$310M additional" was a pair of warrant grants (~11.6M shares under each agreement), all of which expired unexercised; P10 "elected not to exercise." The Conversant tranche was redeemable at tangible book value if Crossroads failed to up-list to NYSE/Nasdaq (or complete a $100M+ qualified public offering) within three years. The holding company had been renamed Crossroads Impact Corp. effective January 5, 2022. (Primary: Crossroads Impact Corp. press release, PR Newswire, July 11, 2022, https://www.prnewswire.com/news-releases/crossroads-impact-corp-announces-180-million-equity-investment-from-funds-managed-by-p10-and-conversant-capital-and-expanded-relationship-with-enhanced-capital-group-to-accelerate-growth-301584187.html; equity accounting at Crossroads FY2023 audited financials.)

Delisting (2023)

Crossroads' OTCQX listing ended around April 2023. Crossroads continues to post audited financial statements at crossroads.com.

The December 23, 2024 redemption

On December 23, 2024, Crossroads and Enhanced Capital Group (ECG) terminated their advisory agreement and the P10/Conversant position was unwound. P10's FY2024 10-K (Note 12) discloses that the impact-credit portfolio lifted into two new "Clifford" LLCs, the P10 funds swapped their Crossroads equity for Clifford membership interests at fair value, and ECG signed a fresh advisory agreement to manage the same portfolio at the identical ~1.5%/yr; the 10-K adds that "Clifford is not considered a related party." P10 booked no gain or loss on the exchange.

The 2026 Harvest merger

On February 23, 2026, Crossroads Impact and Harvest Commercial Capital, LLC (Laguna Hills, CA; majority-owned by an affiliate of Medalist Partners; co-founders Adam Seery, Todd Massas, Evan Mitnick, David Scherer) announced a merger. Both companies will keep their brands; both CEOs (Donnelly and Seery) are quoted in the release. Harvest was a Womply partner lender during PPP. (Source: Harvest Small Business Finance / Crossroads Impact Corp. merger announcement Business Wire, Feb. 23, 2026 (original: businesswire.com).)

Three sets of proceedings involved Capital Plus and Crossroads. None produced a fraud finding against the lender or its executives.

1. Greathouse v. Capital Plus Financial, N.D. Tex. 4:22-cv-00686 (Judge Mark T. Pittman)

A proposed borrower class action alleging Capital Plus failed to fund PPP loans that the SBA had already approved. The complaint cited the company's own disclosures: 472,036 loans approved, ~$930M in PPP fees, $6.4B drawn on the PPPLF, and the July 2021 special dividend, alongside the named plaintiff's $15,665 approved loan that he never received. Named defendants included Capital Plus, Crossroads Impact Corp., Eric Donnelly, and Robert Alpert. The original filing was Greathouse v. Capital Plus Financial, LLC and Crossroads Systems, Inc., No. 4:21-cv-1243-BRW (E.D. Ark., filed Dec. 29, 2021), dismissed on July 19, 2022 for lack of personal jurisdiction; the Northern District of Texas case, 4:22-cv-00686, was filed August 9, 2022. Class certification was denied on September 6, 2023 (690 F. Supp. 3d 610). The CourtListener docket records a joint stipulation of dismissal with prejudice filed May 22, 2024; settlement terms are confidential. An individual borrower suit with a similar fact pattern followed (Tate v. Capital Plus), a private action, not government enforcement. (Sources: Greathouse case file; Greathouse class-cert opinion (CourtListener); docket.)

2. Oto Analytics (Womply) v. Capital Plus Financial, N.D. Tex. 3:21-cv-02636-B (Judge Jane J. Boyle)

A commercial fee dispute, filed September 9, 2021 in Dallas County and removed to federal court. Defendants: Capital Plus, Crossroads Systems, Eric Donnelly, Fin Orion LLC d/b/a Blueacorn, and Barry Calhoun. Womply alleged that Blueacorn brought it in (May 2021) to refer PPP applicants to Capital Plus and provide its technology platform, with Blueacorn obligated to pay Womply within five business days of receiving fees from Capital Plus. On those 86,521 referred loans (worth $950M+), Capital Plus collected $186,882,948 in lender fees and Blueacorn owed Womply $76,714,482.67 (~$9M referral + ~$67M technology) that Blueacorn refused to pay, citing non-payment from Capital Plus. On May 11, 2022, Judge Boyle denied the defendants' motion to dismiss the declaratory-judgment, fraud, tortious-interference, and civil-conspiracy claims (counts 1, 2, 3 and 9) and dismissed the breach-of-contract, negligent-misrepresentation, promissory-estoppel, unjust-enrichment and quantum-meruit claims (counts 4–8) without prejudice, with thirty days to amend (Doc 82 text). The case was settled and dismissed with prejudice January 5, 2023. (Sources: First Amended Complaint, Doc 14, Dec 23, 2021; Memorandum Opinion, Doc 82, May 11, 2022; docket 60684073.) The parallel Womply v. Benworth arbitration addressed Womply's fee structure: the arbitrator's final award (May 30, 2024, following a December 21, 2023 interim award; corrected final award June 26, 2024) granted Womply's three contract claims — $86,299,892 in contract damages, about $117.9 million with interest, fees and costs — held the fee provisions not void, illegal or unenforceable, and denied Benworth's counterclaims except one concerning loan-file and platform access (JAMS award case file).

3. Blueacorn arbitration, March 2023 onward

In March 2023, Blueacorn filed an arbitration demand against Capital Plus over their LSP agreement, claiming unpaid fees; Capital Plus filed counterclaims in May 2023 and had accrued $80 million in fees due to Blueacorn on its balance sheet. On August 24, 2023 the arbitrator granted Capital Plus interim relief on document access; Capital Plus posted a $5 million bond. Per the House Select Subcommittee report and ProPublica, Capital Plus approved PPP loans to Blueacorn owners Nathan Reis and Stephanie Hockridge and later sought repayment. (Source: Crossroads FY2023 audited financials, Note 19.)

The SBA review (December 2022 – August 2023)

After the December 1, 2022 House Select Subcommittee report alleged Capital Plus had not adequately overseen its fintech partner, the SBA announced on December 8, 2022 a "full investigation" of the eight lenders named: Capital Plus among them, alongside Benworth, Cross River, Celtic, Customers, Fountainhead, Harvest, and Prestamos. Capital Plus signed a Voluntary Agreement with the SBA on January 6, 2023 for enhanced supervision and reporting. The SBA sent "numerous requests" for information on the loan portfolio and on Capital Plus's BSA/AML/KYC procedures, and paused processing of all of Capital Plus's PPP guarantee-purchase requests. On August 28, 2023, the SBA notified Capital Plus that it had concluded its investigation and review of Capital Plus with no material adverse findings and resumed processing. As of the January 31, 2024 auditor's report date, SBA had since processed and approved more than 47,000 guarantee-purchase requests. The disclosure lives in Note 19 of the Crossroads Impact Corp. audited consolidated financial statements for the years ended October 31, 2023 and 2022.

What is not on Capital Plus's record

  • No civil fraud judgment
  • No False Claims Act settlement
  • No criminal charge against the entity or any of its officers
  • No SEC enforcement action against Crossroads or Donnelly
  • No SBA suspension (SBA suspended Blueacorn and Womply in December 2022; Capital Plus was not suspended)

The criminal cases in the Blueacorn cluster were brought against Reis, Hockridge and Flores; see the Blueacorn profile for the dockets and sentences.

People

  • Eric A. Donnelly: CEO, Capital Plus (since 2014) and Crossroads (since Dec 2017). SMU economics. Founded a national small-balance CRE finance company in 2005; Stanford Latino Entrepreneur Initiative (2017); BBVA Momentum graduate; lead independent director, InBankshares; MO 100 "Top Impact" 2023 and 2024. Held 718,590 Crossroads shares (12.0%). FY2021 comp $9,249,474. Still CEO of Crossroads Impact.
  • Farzana Giga: CFO of both. Co-founded Capital Plus Financial in 2014 via a residential seller-financing PE fund; CPA/CMA, University of Toronto. Held 618,683 shares (10.4%); FY2021 comp $9,199,474.
  • Thiruvendran "Thiru" Vignarajah: CEO of Capital Plus from Sept 14, 2021 to end of 2023. Former Maryland Deputy AG and federal prosecutor; Harvard Law Review president; Breyer clerk; ex-DLA Piper. Arrived after the 2021 PPP lending; ran the company through the SBA review. Left in January 2024 to become Managing Partner at Sanford Heisler Sharp (Baltimore), then opened his own firm.
  • Robert H. Alpert: Chairman of Crossroads since Oct 2017; co-founder of 210 Capital; Chairman & Co-CEO of P10, Inc. (now Executive Chairman of Ridgepost Capital, NYSE: RPC). Held 546,142 shares (9.1%).
  • C. Clark Webb: Director of Crossroads since Oct 2017; co-founder of 210 Capital; Co-CEO of P10 (now Executive Vice Chairman of Ridgepost). Held 646,143 shares (10.8%) — the largest individual block. Ex-Select Equity Group.
  • Mark Crockett: Officer & >5% holder (466,233 shares; 7.8%); Capital Plus original owner.
  • Charles A. Vose III: 8.1% Crossroads holder via personal stake + Southwest Federated, Inc.; founder of Harbour Portfolio Advisors (contract-for-deed; CFPB 2020-BCFP-0004; PA AG settlement Aug 2, 2021); Capital Plus's landlord.
  • Claire Gogel: Independent director. Ex-Greenlight Capital partner/analyst; founder/PM of Perennial Advisors.
  • The Crossroads FY2021 disclosure states none of the listed insiders carried any criminal conviction or regulatory disciplinary action in the prior five years.

Sources

Primary documents in this archive

Press / regulatory primary

External references

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