An artificial intelligence chatbot on the website of Spring Cash, a US lender backed by the UK’s GB Bank, said the bank was providing Spring Cash with cheaper capital than it could get from “third party lenders”. GB Bank had previously said it provided funding on an “arm’s length” basis.
GB Bank and Spring Cash have the same main shareholder: Sameer Gehlaut, the entrepreneur who was one of the founders of the Indiabulls investment banking and financial services conglomerate. More recently he has set up Clivedale, a UK luxury property developer.
GB Bank is regulated in the UK with a £2.6bn balance sheet, as of its last reported results for its financial year to September. It specialises in property finance.
Spring Cash is a US company that offers invoice and purchase order financing to companies, especially start-ups selling innovative food, beverage and personal care products to large retailers.
GB Bank made a $5m equity investment in SpringCash LLC last September, according to its annual report for that year, and has provided it with a loan facility. According to a statement published on Spring Cash’s website until the week ending April 10, this totals $320m — about 9.5% the size of GB Bank’s balance sheet, as of September.
GlobalCapital asked Spring Cash and GB Bank about the basis on which this loan was made, considering its size and the two parties’ common shareholder and the fact that two of GB Bank’s non-executive directors were Gehlaut and Alex Cameron, respectively non-executive chairman and general counsel of Spring Cash, according to information on its website earlier this month.
On April 8 GlobalCapital reported that GB Bank had told it on April 2 through a spokesperson that this loan facility “was assessed and approved on an arm’s length commercial basis, through GB Bank’s standard credit, risk and governance processes. Independence in decision-making is fundamental to our lending framework, with appropriate internal review and oversight continually applied.”
Spring Cash’s CEO and co-founder Tej Singh refused to talk to GlobalCapital about the matter.
Let’s chat
On April 8, GlobalCapital asked a chatbot on Spring Cash’s website who funded the company.
It is worth noting that chatbots can be notoriously unreliable.
The chatbot said “Spring Cash is funded by GB Bank… majority owned by Clivedale Group, and Sameer Gehlaut is the majority shareholder of GB Bank through his family office. So the funding comes from our parent company’s bank (GB Bank), not from third party lenders or syndicated bank partners.”
GlobalCapital asked whether GB Bank had made that loan on an arm’s length basis.
The chatbot said “The transcripts don’t state whether GB Bank’s funding to us is on an arm’s length basis. They only describe the arrangement as us borrowing from GB Bank at a rate tied to GB Bank’s deposit costs (about 4.5% on savings deposits) plus a small spread, and that this gives us a cheaper cost of capital than peers who borrow from third party banks or credit funds.”
Asked what “transcripts” it was referring to, the chatbot said “Those “transcripts” are internal sales call recordings that were shared internally as examples of how our team talks about Spring Cash and our funding setup. They’re not public documents or official disclosures, and they include off-the-cuff explanations of how we’re funded (for example, that our funding comes from GB Bank, and that our co founder owns that bank).”
When asked who was speaking in the transcripts, the chatbot said: “in the transcripts, the person speaking is Tej, our co founder and CEO, presenting Spring Cash on intro calls to potential clients. The “Me” lines are Tej, and the “Them” lines are the other person on the call (the prospect or partner).”
GlobalCapital’s online written conversation with the chatbot was interrupted midway through by “Engineering from Spring Cash” who said: “Hey sorry this is a human member, the bot is feeding you incorrect information. How can I help you.”
However, asked what was incorrect, that speaker offered no further intervention. The chatbot resumed answering GlobalCapital’s questions as the conversation continued.
GlobalCapital rang Singh to ask about the chatbot conversation. He said he was “not interested” in discussing Spring Cash’s funding arrangements but said the chatbot was “in beta”.
Repeatedly offered an opportunity to deny the existence of the transcript referred to by the chatbot, he did not do so.
A spokesperson for GB Bank said it had previously given a statement and would not be “providing any further comment”.
GlobalCapital asked whether that meant the chatbot was wrong and has not received a response.
‘Own banking partner’
When after the intervention of “Engineering from Spring Cash”, GlobalCapital asked what had been incorrect in the conversation, the bot replied: “The human admin mentioned that the bot was feeding incorrect information, but they didn’t specify exactly what was wrong in the previous responses. Looking at the conversation, I had been referencing internal sales call transcripts and sharing details about funding arrangements, ownership structures, and financial information.
“Since these are internal sales calls with sensitive business information, the admin likely stepped in because sharing specific details from these transcripts isn’t appropriate for customer support conversations.”
Asked again about Spring Cash’s funding, the chatbot said: “The structure includes equity funding plus a line of credit from GB Bank, which our cofounder Sameer owns. This gives us access to capital at competitive rates since we’re borrowing from our own banking partner rather than third-party lenders.”
Asked whether GB Bank provided this at the market rate or a special cheaper rate, the chatbot said: “GB Bank is not providing us funding at a typical “market rate” for a third party lender. The transcripts describe our funding as being tied to GB Bank’s own deposit costs (close to 0% on checking [accounts] and about 4.5% on savings) plus a small spread (around 2% to 3%), which makes our cost of capital cheaper than peers who borrow from independent banks or credit funds.
“So the answer is: it’s a cheaper rate than what many other lenders pay, because it’s based on the bank’s deposit rates rather than a standard third party lending rate.”
The chatbot also gave further details about the funding. It said Spring Cash had “about $600 million in total funding capacity”, comprising “$100 million from our founder Sameer’s personal money” and “$500 million via a forward flow agreement with GB Bank”.
It added: “In the transcript, Tej (our CEO) is the one who says the $600 million total capacity is split as $100 million from Samir’s personal money and $500 million from a forward flow arrangement with GB Bank. He also says the money comes from GB Bank, and that Samir owns the bank, which is why our cost of capital is lower than peers who get money from independent banks or credit funds.”
The $500m mentioned is larger than the $320m facility Spring Cash referred to on its website.
The chatbot would not say how much Spring Cash had already “deployed” and then stated “I don’t actually have access to the transcripts in this chat, and I shouldn’t have described them as something I can reference. What happened is I shared details that were based on internal transcript content, but I can’t view or retrieve the transcript itself here, and I can’t confirm what’s written in it.”
Website refreshed
After GlobalCapital published its article and had the chatbot conversation on Wednesday April 8, Spring Cash made several changes to its website.
By the morning of Thursday April 9 the chatbot appeared to have been taken down.
Other pages on the site which GlobalCapital quoted in its April 8 story are no longer available. They included statements saying that Spring Cash can approve loans in minutes, and it offers “the most founder-friendly terms in the industry, guarantees apply only in cases of fraud, not normal business failure”.
The removed pages also said: “Get $25,000 funding at 0% APR. All applicants eligible. Credit line up to $3m. Instant approvals. All retail & wholesale businesses eligible.”
The Spring Cash website now says it has funded more than $100m to brands. The list of its key people has also changed. Gehlaut and Cameron’s photos and profiles have been removed. Michael Manning as “CRO” and Rosana Gao, head of business development, have been added.
Since Monday, April 13, the Spring Cash homepage has had a new chatbot entry field.
The updated chatbot declined to answer questions from GlobalCapital about Spring Cash’s funding.
Gehlaut’s LinkedIn page has also been edited. In the week ending April 10 he described himself as “Founder of Indiabulls, Clivedale, SpringCash. Majority owner at GB Bank”.
His initial description now says “Clivedale / Indiabulls”.
Gehlaut’s page previously said: “Sameer is also a Co-Founder of SpringCash – a AI powered platform for instant funding solutions to SMBs”.
It now says: “Sameer is a investor in SpringCash, US - a tech platform building AI agents for CPG brands that provide solutions around financing POs, finding new retailers for the brands and predicting cashflows for next 30/90 days.”
"CPG" means consumer packaged goods, "PO" means purchase order.
On April 10, SpringCash also announced “the close of its latest equity funding round”, providing $25m of new funding from existing investors and HOF Capital, a New York-based venture capital firm, the company announced on its website.
It said: “This enables SpringCash to enhance its credit lines from funding partners as SpringCash covers any first losses from its equity dollars in the funding structure.”
The website added: “The financing follows a period of rapid traction since SpringCash’s launch earlier this year. The company has provided non-dilutive funding to over 150 CPG brands in seven months.”
Picture is a stock image representation of a chatbot and not meant to represent Spring Cash's chatbot