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ProfileCompany or group

The Loan Source, Inc.

Lender or loan platform

PPP · PPPLF
Type
Company or group
Role
Lender or loan platform
Programs
PPP, PPPLF
Updated
  • Type: Non-bank SBA lender of record / PPP secondary-market buyer and warehouse. Holder of one of the 14 SBA Small Business Lending Company (SBLC) licenses.
  • Legal entities: The Loan Source, Inc. (SBLC, Melville, NY), corporate parent The 1993 Steven D. Kravitz Family Trust (per the Rule 7.1 disclosure in Loan Source v. Newity, D. Del. No. 1:22-cv-01255). Operated through 2020–2022 with ACAP SME, LLC as servicer; ACAP SME rebranded to Newity LLC (Chicago) in 2022.
  • Founded / SBLC date: SBLC license approved by SBA in 1994. It is one of only 14 outstanding SBLC licenses and, on the company's own description, the oldest current holder under continuous ownership.
  • HQ: 68 S. Service Road, Suite 100, Melville, NY 11747.
  • Lender / Fed identifiers: "THE LOAN SOURCE" — RSSD 5511408, ABA routing 091050603, New York, NY.
  • Role: Pre-pandemic, a small, niche SBA 7(a) lender working through its SBLC license. During PPP, the largest single user of the Fed's Paycheck Protection Program Liquidity Facility by cumulative gross advances, because it bought other lenders' PPP loans and pledged the acquired paper to the Fed at 0.35%. It did not originate at scale.

Pandemic-role map

  • Reader shorthand: secondary-market buyer, servicer/owner, and Fed-collateral pledger, not a major originator.
  • What The Loan Source did for borrowers: generally did not acquire borrowers at scale; borrowers usually came through selling banks or servicer workflows, then encountered The Loan Source in forgiveness/servicing. In the 2021 round it ran partner landing pages, and two banks reported referral fees tied to it.
  • What The Loan Source bought from other companies: purchased PPP loan portfolios from originating banks, used ACAP SME/Newity for servicing, and pledged acquired loans into the PPPLF.
  • Where responsibility sat: originating lenders received SBA processing fees; The Loan Source became the holder/servicer-facing owner of acquired PPP paper and the PPPLF borrower against that collateral.

Before the pandemic (1994–early 2020)

The Loan Source was a small Long Island SBLC originating SBA 7(a) loans; its site describes the company as under the same control and management since 1994 (company site), with the Kravitz family trust as the corporate parent (Rule 7.1 disclosure in the Delaware case). It files no SEC reports and has no enforcement record. SBLC status meant it was statutorily eligible to act as lender of record for 7(a) loans and, when PPP was bolted onto 7(a) in March 2020, for PPP loans, without being a bank.

During the pandemic (March 2020 – mid 2021)

What it originated, and what it bought

The Loan Source made 192 PPP loans, for $22.4 million, all approved between April and July 2020 (SBA loan data). Northeast Bank of Maine acted as its correspondent for pledges to the Federal Reserve Bank of Minneapolis, and said it had facilitated $11.2 billion of PPP loan purchases for The Loan Source through June 30, 2021 (Northeast Bank, July 28, 2021).

The acquired book came from 52 distinct selling banks. Top sellers (loans / dollars sold to The Loan Source):

  • Northeast Bank (ME) — 34,673 loans / $3.33B
  • Pacific Premier Bank (CA) — 3,851 / $1.16B
  • Cadence Bank (MS) — 12,289 / $725M
  • Blue Ridge Bank, N.A. (VA) — 19,475 / $712M
  • Dime Community Bank (NY) — 2,742 / $594M
  • Webster Bank, N.A. (NY) — 3,042 / $483M
  • Peapack-Gladstone Bank (NJ) — 2,515 / $413M
  • Flagstar, Trustmark, BayFirst, Investors/Citizens, Bryn Mawr, Stearns, OceanFirst — $300–385M each.

What the sellers got

A sale moved the seller's SBA fee income into the current quarter and handed the forgiveness paperwork to the buyer. Trustmark said the fees it would book on its June 2021 sale were "substantially the same as Trustmark would expect to recognize upon the maturity or forgiveness of the PPP loans being sold." Its filing adds that "Loan Source will assume responsibility for the servicing and forgiveness process" (Trustmark Form 8-K). The sellers' own figures, from SEC filings and, for Northeast, a press release:

  • Northeast Bank, June 2020: $457.6 million of loans; an expected pre-tax gain of about $9.8 million (press release, June 25, 2020).
  • Bryn Mawr Bank Corp., second quarter of 2020: about $292.1 million; a $2.4 million gain (Form 10-Q).
  • Southern First Bancshares, June 26, 2020: its $97.5 million PPP portfolio, from 853 loans; $2.2 million of SBA lender fee income, net of sale and processing costs (Q2 2020 earnings release; Form 10-Q).
  • Peapack-Gladstone, September 2020: $354.9 million; an expected pre-tax gain of about $7.4 million (Form 8-K).
  • Investors Bancorp, December 2020: about $328 million (Form 10-K).
  • Dime Community, June 2021: its 2021 originations, more than $585 million; an expected pre-tax gain of about $20.5 million (Form 8-K exhibit).
  • Trustmark, June 2021: about $354.2 million; about $18.6 million of fees, net of cost, that it expected to recognize early (Form 8-K).
  • Blue Ridge Bankshares, June 28, 2021: about $712.6 million of principal for about $705.9 million in cash (Form 8-K).

Blue Ridge's price was the principal "less a discount"; the difference between the two figures is about $6.7 million, or 0.94%. Blue Ridge used part of the cash to pay off about $431.1 million of its own borrowings from the Fed's PPP Liquidity Facility.

A license under contract

According to The Loan Source's complaint, as the Delaware court summarized it in a September 28, 2023 opinion denying Newity's motion to dismiss, the company began negotiating in May 2020 to sell its SBLC license to ACAP SME, LLC and ACAP's principal, Luke LaHaie. That month the parties signed a stock purchase agreement and a lender service provider agreement under which ACAP would service PPP loans The Loan Source originated. ACAP's application to the SBA to buy the license was withdrawn on November 23, 2020, after the parties learned it was likely to be denied "due to a lawsuit brought by LaHaie's former employers and pending against ACAP." A December 30, 2020 amendment extended ACAP's exclusive right to buy the license "in exchange for, among other things, a higher purchase price and several conditional fees."

The Fed half of the trade

The Federal Reserve §11(s) PPPLF transaction disclosures show The Loan Source as the first-ranked PPPLF borrower by cumulative gross advances:

  • $36.18 billion in cumulative gross advances across 1,063 separate advances, 2020-06-22 → 2021-07-28 .
  • Peak outstanding $9.16 billion (2021-07-13).
  • Every advance at the facility's 0.35% rate.
  • Advance-level maturities are in the Federal Reserve's §11(s) disclosures.

The originator-fee column for The Loan Source in the project's PPPLF fee join is $0 ; the join file's note describes the row as a lender-of-record/warehouse vehicle that pledged PPP loans bought from other originators.

The Northeast Bank chain, on the seller's own letterhead

Northeast Bank (NASDAQ: NBN) documented the commercial mechanics in its own press releases (June 25, 2020 and March 4, 2021): sales of its PPP loans to The Loan Source, Northeast acting as correspondent for The Loan Source's PPPLF pledges, ACAP SME servicing the pledged loans, and a disclosed pre-tax gain on the 2021-round sale. The project's seller table ([theloansource_buyside_sellers.csv]) records Northeast as the largest seller.

Northeast's July 28, 2021 results list the purchases it facilitated by quarter: $1.27 billion in April–June 2020, then $2.11 billion, $1.33 billion and $2.14 billion, and $4.37 billion in April–June 2021. The same release put The Loan Source's PPP loan balance at $8.39 billion on June 30, 2021. Under the arrangement Northeast "earns a correspondent fee when Loan Source purchases PPP loans" and then "shares in net servicing income"; its income from it in April–June 2021 was $6.654 million. A PPP loan paid 1% interest, against the facility's 0.35%.

The forgiveness back office

The Loan Source's PPP forgiveness workflow ran on a Biz2Credit / Biz2X platform licensed by ACAP SME (Globe Newswire, Sept. 16, 2020, ACAP platform records in the wave-3 citation pack).

Who wasn't paid what

On its own 192 loans The Loan Source earned an estimated $867,000 in SBA processing fees; on the loans it bought it earned none, because the schedule pays the originating lender, not the buyer (lender-fee table). The selling banks collected the SBA fees on the loans they originated and then sold the guaranteed paper to The Loan Source (Northeast disclosed a gain on its 2021-round sale; we do not have a copy of the release). ACAP SME was paid separately as servicer. The Loan Source's own economics are not on any public regulatory filing, because it files no Call Report and no 10-K.

Benworth Capital's servicing page names The Loan Source

A May 7, 2021 capture of Benworth Capital's PPP servicing page is one of the few independent confirmations that The Loan Source appears in downstream lender workflows as a named channel; in The Loan Source's case it appears as a buyer of other lenders' books rather than an upstream funnel.

Applicants, partner pages and referral fees

In May 2020 the company's homepage said "We're still accepting and processing PPP Loan Applications" and, of the loans' terms, "No fees." In August 2020 a page on its site said the borrower portal was paused for platform upgrades while Congress worked through forgiveness rules, and that it expected the portal "to be back online in approximately 1.5 – 2 weeks time."

For the 2021 round the site carried partner landing pages. The Wayback Machine lists at least 70 addresses under theloansource.com/partners/; the earliest, for LendVer, dates from October 6, 2020, and all but two first appear in January 2021 or later. A January 2021 page for Lighter Capital read: "PPP is now live. Begin your PPP loan application with ACAP & The Loan Source today." On January 5, 2021, LendVer named The Loan Source its "2021 Best PPP Lender." BCB Bancorp, which said it partnered with The Loan Source and Newity, recognized $495,000 in referral fees for the second PPP round in 2021. Southern First received about $268,000 in April–June 2021 "from The Loan Source Inc. for PPP loans they originated to our clients." The SBA's loan data list no PPP loan approved in 2021 with The Loan Source as originating lender.

On May 4, 2021 the SBA told trade associations that the PPP general fund was exhausted. The company then told applicants whose files had an SBA error code or had not reached the SBA to "apply through a CFI, who have $8.6 billion reserved in funding for new loans."

After the pandemic (mid 2021 – present)

The ACAP/Newity split

ACAP SME, the loan-aggregator and servicing operator behind the PPP buy program, rebranded to Newity LLC in 2022 and moved into SBA 7(a) loan facilitation with Northeast Bank (American Banker and Newity releases); for Newity's later self-reported volumes and its co-CEOs' recognition, see the Luke LaHaie profile.

The Loan Source kept its SBLC license and the PPP forgiveness-servicing book on its servicing record (SBA servicing snapshot per the buyside README); its current site describes a services marketplace offered with ACAP SME/Newity (company site).

The Delaware lawsuit: The Loan Source sues its servicer

On September 22, 2022, The Loan Source and the 1993 Steven D. Kravitz Family Trust sued ACAP SME, LLC and Newity LLC in the U.S. District Court for the District of Delaware (No. 1:22-cv-01255; we do not have a copy of the CourtListener docket). It is a commercial contract dispute between the SBLC license-holder and its servicer/aggregator partner; no allegation in it is one of PPP fraud.

Enforcement, debarment, and DOJ touches

No SBA suspension or debarment of The Loan Source has been located. No FTC, CFPB, or SBA enforcement action against The Loan Source has been located. The Loan Source does not appear in the House Select Subcommittee on the Coronavirus Crisis fintech-PPP report of December 1, 2022 ("We Are Not the Fraud Police"); that report's named subjects are Blueacorn, Womply, Kabbage, Bluevine, Cross River, and Customers Bank. No SIGPR or SBA-OIG report specifically about the PPP secondary market or The Loan Source has been located. No DOJ criminal charge against The Loan Source, ACAP SME, Newity, or Steven D. Kravitz personally has been located through September 2026.

Purchased loans as PPPLF collateral

The PPPLF terms allowed lenders to pledge purchased PPP loans (Federal Reserve archive note). The facility's largest user by gross advances was therefore a secondary-market buyer with a single SBLC license, no deposit base, no Call Report and no fee income on the loans it bought (PPPLF table; lender-fee table).

How the book ended

The SBA's loan data as of September 30, 2024 show 115,824 PPP loans, $11.24 billion, with The Loan Source as servicer; it originated one of them itself. Forgiveness is recorded on 106,191, for $10.76 billion. Another 7,841 loans, $367.3 million, were charged off: 6.77% of the loans against 5.61% across all 11,468,210 PPP loans, and 3.27% of the dollars against 2.29%. By loan count, the charge-off rate was 3.80% against 2.54% for loans approved in 2020, and 8.22% against 8.10% for 2021 loans.

Current posture (as of mid-2026)

The Loan Source remains a privately held SBLC of record in Melville, New York, and the lender of record on the run-off of its acquired PPP servicing book (SBA servicing snapshot per the buyside README).

Sources

Primary documents and project analysis

  • Lender-fee table: lender_fees.csv (row "Loan Source Incorporated"; 192 loans / $22.4M; $866,573 estimated PPP processing-fee income, all on 2020 loans).
  • PPPLF lender table: ppplf_by_lender.csv (row "THE LOAN SOURCE"; 1,063 advances / $36.18B gross / $9.16B peak / 0.35% rate / 2020-06-22 → 2021-07-28).
  • PPPLF–fee join: ppplf_fee_join.csv and PPPLF × SBA-fee join — fee income on Fed-funded, government-guaranteed loans (flagged is_loan_purchaser_not_originator = Y).
  • Buyside analysis: theloansource_buyside_sellers.csv — who sold The Loan Source its $11B book and theloansource_buyside_sellers.csv (115,824 serviced loans / $11.24B; 52 selling banks).
  • SBA PPP loan-level data (FOIA release, data as of Sept. 30, 2024): originating lender, servicing lender, forgiveness and loan-status fields; 115,824 loans with servicing lender "Loan Source Incorporated", 192 with it as originating lender, charge-off rates against all 11,468,210 PPP loans.
  • Wayback Machine index of theloansource.com pages, 2020–2022 (at least 70 addresses under /partners/).
  • Federal Reserve PPPLF §11(s) disclosures archive: ppplf (reconstructed in ppplf_advances.csv).
  • Federal Reserve archive note (PPPLF borrower ≠ PPP originator; purchased loans pledgeable): README.
  • Benworth servicing capture naming The Loan Source as channel: benworth pppservicing 2021-05-07.
  • Archived Southern First / The Loan Source partner-chain captures and ACAP Cafe platform-side records.

External primary documents

External references (secondary, attributed)

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