[J.Celifarco]

The one that stipulates that by taking more money you automatically default and must pay a fine. Yes, some will ignore it and I am sure collection will be a *****. I also think the sense of relief and gratitude would inspire loyalty by many of these Merchants. We have all made mistakes or used bad judgment in our lives. Some of us learn from it and correct ourselves, some don't. Consolidation is not a perfect solution, but it is a solution. One that can reduce stacking and legitimately benefit our clients.

If someone stacks once they will stack again. And by consolidating all you are doing is playing into the hands of the 5 companies that get paid off. They get there money out of the deal and can now go back into it having already secured a profit on the first deal.. The whole idea of consolidating a deal with more then 1 or 2 positions is crazy. The banks will end up getting screwed every time.

[freddy]

It is an addiction - just like the re-financing of homes was - how many people lost their homes? These merchants are being suckered into stacking by lazy people who prefer to stack as opposed to spend time finding new merchants.

[JSL23]

It is an addiction - just like the re-financing of homes was - how many people lost their homes? These merchants are being suckered into stacking by lazy people who prefer to stack as opposed to spend time finding new merchants.

I don't disagree. Once they get past the initial sticker shock of the factor rate and realize how easy it is, it can be quite addictive. I get it. What about the Merchants who were MCA virgins up until, let's say a year ago. They are seeking funding and get a solid offer at a good rate from a Broker. They take it, even though it is a bit less than they were aiming for. Two months later the same Broker calls them, telling them they can get them the remaining $$ they need. They smooth talk them and convince them they are doing nothing wrong. All of a sudden they are paying two Lenders, possibly falling behind on paying certain vendors. So, left with no other choice they take a 3rd advance to pay their vendors and keep business running as smoothly as possible. All this Merchant wanted was a loan, but things have spiraled out of control, due to their naïve nature and a greedy, lazy Broker. It doesn't make them a crackhead, it makes them human. Those are the type of Merchants who could benefit from consolidation AND remain loyal.

If we're talking about a serial stacker who always takes money just because........yes they will definitely do it again. Isn't there a way to do our due diligence and separate the two as best we can. Aren't there moves to be made that would protect the Lender's investment?

I have been doing this for a year now, and the industry culture is to chase UCC's.....like it or not, that is the reality, especially for a small broker shop or someone running solo. Personally, I mix it up as much as I can, but ultimately I am going to target those most likely to use my product offering. Any yes, I would like to make more money and provide a more valuable service then a lousy $10,000 double stack paying 6 points on the funded.........

So, while I do understand your collective apprehension and empathize, I also feel like maybe everyone should be more open-minded and find ways to minimize then risk. More consolidation type deals can be very beneficial for all involved.

[J.Celifarco]

there is nothing to be open minded about, its not going to happen. No bank or underwriter I have ever spoken to has even thought this was worth thinking about. The bank who consolidates has nothing to gain and everything to lose while the people getting paid off get out of the deal and now have the option to go back in with less risk then they took when they stacked the first time. The bigger banks want to discourage stacking if people started doing this it would have the opposite effect, and smaller banks don't have the resources to take this kind of risk. Yes as an ISO our lives would be easier if this was an option but it is not and I really doubt it ever will be

[JSL23]

there is nothing to be open minded about, its not going to happen. No bank or underwriter I have ever spoken to has even thought this was worth thinking about. The bank who consolidates has nothing to gain and everything to lose while the people getting paid off get out of the deal and now have the option to go back in with less risk then they took when they stacked the first time. The bigger banks want to discourage stacking if people started doing this it would have the opposite effect, and smaller banks don't have the resources to take this kind of risk. Yes as an ISO our lives would be easier if this was an option but it is not and I really doubt it ever will be

But it is happening!! A couple of Lenders are doing it. We have done 5 or 6 consolidation deals over the last couple months and so far, so good. I admit, I am no Finance expert, but I refuse to believe that there is no way to minimize risk and maximize opportunity. There have been much more complex innovations than consolidating a few cash advances. If the banks who are doing this fail miserably I will admit I was wrong, but until that I am going to do consolidations as often as the opportunity presents itself.

[Andy]

the only way this will happen is if one of these new shops who don't really know cash advance but see the factor rates and decide its good to throw some money at, starts doing it since it appears to be great way to gain market share, not realizing there is good reason that no one else is doing it . and then after a year of losing money they will stop. but leaves an opportunity for ISOs to make some money in the meantime until the funder realizes bad idea. Same concept as first funds doing achs without bank statements, or ondeck 1 month statement, or ondeck split repayment, or genesis funding all the crap no one else would touch , etc
none of those are going on now, the funders realized bad idea and stopped, but for the time they were doing it there was opportunity to get some deals done that would otherwise never have been done

[Eric S]

I got $5 that says he'll stack on his next deal.

[J.Celifarco]

I see your $5 and raise you $5.. Once a stacker always a stacker

[JSL23]

I see your $5 and raise you $5.. Once a stacker always a stacker

Honestly, what's to stop them from stacking anyway? You get them an Advance, UCC goes out, and within 3 months there are a dozen different Lenders/Brokers calling them. Despite your warnings it is hard to resist the temptation and they take the 2nd position. Now they're thinking, Wow, this is easy, a little pricey, but easy. By the time you call for their renewal you notice Cap Stack and Pearl in 2nd position(not to call them out, just as an example).

You now have a choice:

A) Let their business go

B) Get them ANOTHER stack

C) Help them, since most of them are feeling the pain of paying 3 different Lenders and consolidate. Your original advance is a few days away from being paid in full and Cap Stack and Pearl are both around the halfway point. You can get them $50,000, and they will net $25k-$30k and have a lower daily remittance.

To me, C is a no brainer. I don't want to lose anyone's business(but if they did it again after, I would) and 4th positions are pointless, excessive and sleazy. I am doing the best possible thing in that situation for the Merchant AND maximizing my earnings!!

Until the chasing UCC lead culture dies down what is the alternative. What percentage of MCA clients get a 2nd position or more?

[isaacdstern]

YSC can assist you in funding this deal and pay off all the balences
800-955-2411