[JayBallentine]

Here's what I am seeing working.

1. Over fund / approve.
2. Take second position on yourself (stagger over approval)
3. Approval amount for stack is always so low the merchant says "blank you."
4. 50% paid off is tough - they have been "over funded" making it difficult to buy out the "over funded" 50% balance.

F-ing brilliance.

[Steven_O]

I understand #1, and #2... but please explain more on 3 & 4.

I'm new to this... don't kill me.

[JeffMulford]

Underwriting positions on 1st's is conservative in most cases in my opinon. Jay, I think if we hit the dollar amount higher and start approving merchants for renewals faster maybe 40 percent in the position (granted the margin on risk would largen slightly, but in comparison to eliminating defaults through stacking it might wash out or be positive even). There might be a healthy resolution to serious issues with stacking 5,6,7s. Ridiculous. Also "add ons" in contrast to "renewing" by buying out balances, should be addressed within those/our companies. Profit numbers yield on double interest vs. loss on default ratio ratios on over stacked clients with existing 1st with them). Good insight though. Something "old generation lenders" should start incorporating, a new fresh look at funding if their opposed to "stacking." A group of new generations of lenders might come in a take such thing into account and could make a big diffrence, Business trends on a day to day basis.

[JayBallentine]

Underwriting positions on 1st's is conservative in most cases in my opinon. Jay, I think if we hit the dollar amount higher and start approving merchants for renewals faster maybe 40 percent in the position (granted the margin on risk would largen slightly, but in comparison to eliminating defaults through stacking it might wash out or be positive even). There might be a healthy resolution to serious issues with stacking 5,6,7s. Ridiculous. Also "add ons" in contrast to "renewing" by buying out balances, should be addressed within those/our companies. Profit numbers yield on double interest vs. loss on default ratio ratios on over stacked clients with existing 1st with them). Good insight though. Something "old generation lenders" should start incorporating, a new fresh look at funding if their opposed to "stacking." A group of new generations of lenders might come in a take such thing into account and could make a big diffrence, Business trends on a day to day basis.

Jeff - how much money, and how soon can we make it together!!!??? You get it!!!

What they are doing is a beautiful blend of math and psychology. This company has only been funding for 10 months. Entered the game with a plan... I like.

[Jared_Weitz]

Here's what I am seeing working.

1. Over fund / approve.
2. Take second position on yourself (stagger over approval)
3. Approval amount for stack is always so low the merchant says "blank you."
4. 50% paid off is tough - they have been "over funded" making it difficult to buy out the "over funded" 50% balance.

F-ing brilliance.

UW has a formula though guys. When you "over fund" you create more risk for you as the funder and for the merchant. Many times merchants take stackers because the payments they make on a 1st position are high so they feel they need the money, until the 2nd payments start to come out, then a 3rd.....Eventually a merchant will go out of business. So if we adapt to a thinking of "over fund" aren't we just breaking the formulas we know work? If a cash company operates at 7% bad debt and has an UW rule that allows for 10% of a merchants monthly gross as a repayment method and then starts to change to 17% as an example then bad debt will rise, rates would then need to rise thus moving in the opposite direction of the market.

Just my thought process from a funding view. I think it's smart to try and stop the 2,3,4,5 positions I just don't know that the way to do it is to increase the risk to the funder day 1

[J.Celifarco]

Here's what I am seeing working.

1. Over fund / approve.
2. Take second position on yourself (stagger over approval)
3. Approval amount for stack is always so low the merchant says "blank you."
4. 50% paid off is tough - they have been "over funded" making it difficult to buy out the "over funded" 50% balance.

F-ing brilliance.

Jay, if I am reading this correctly you are saying fund a deal, then stack on it yourself??? If that is what you are saying I would be careful, if the 1st position bank sees you are stacking on your own deal with them they may end up turning you off and stop taking your submissions

[CreditGuy]

The fundamentals of credit risk management in commercial lending transactions seems to escape many around here.

[channin19]

Easy to say when you're using other peoples money

[MCNetwork]

Here's what I am seeing working.

1. Over fund / approve.
2. Take second position on yourself (stagger over approval)
3. Approval amount for stack is always so low the merchant says "blank you."
4. 50% paid off is tough - they have been "over funded" making it difficult to buy out the "over funded" 50% balance.

F-ing brilliance.

First you give the merchant more than he can handle and then you add a second position on yourself? This is a recipe for default!

[Scott Williams]

Easy to say when you're using other peoples money

Channin19 said it the best. All these ideas are great when its not your money. Consolidating 4-5 advances and maxing out merchants so they don't stack. Terrible ideas when its your money at risk.

[MCAVeteran]

Daily funder should send out a reporter to call on a pool of merchants who take multiple fundings and find out why they feel the need to take on additional companies and fundings after the first advance or loan. From there, maybe from a merchants point of view, we can all learn why they take additional fundings -

[channin19]

Yea after the interview is complete I can see the merchant's first question being " So can you get me more money?"

[Chambo]

Here's what I am seeing working.

1. Over fund / approve.
2. Take second position on yourself (stagger over approval)
3. Approval amount for stack is always so low the merchant says "blank you."
4. 50% paid off is tough - they have been "over funded" making it difficult to buy out the "over funded" 50% balance.

F-ing brilliance.

Nothing new here. MCC, BFS & TBB have been doing this all along with their add on deals. The merchant gets $2000-5000 every two months, further increasing their overall balance. so (hypothetically) there isn't a fund out there that could pay them off, nor is the merchant ever worried about their appetite for funds

[J.Celifarco]

Nothing new here. MCC, BFS & TBB have been doing this all along with their add on deals. The merchant gets $2000-5000 every two months, further increasing their overall balance. so (hypothetically) there isn't a fund out there that could pay them off, nor is the merchant ever worried about their appetite for funds

they dont do this as much any more as they did in the past.. Add ons used to be much more common then they are now. You can get them done but more often then not the bank wants to do the refi instead of the reup

[Chambo]

Heck, even SFS does them on a case by case basis

[JayBallentine]

Nothing new here. MCC, BFS & TBB have been doing this all along with their add on deals. The merchant gets $2000-5000 every two months, further increasing their overall balance. so (hypothetically) there isn't a fund out there that could pay them off, nor is the merchant ever worried about their appetite for funds

Chambo.... Damn right.

I am only expressing what I am seeing working... Mathematically. Buynance doesn't argue with math.

People actually come to us... "I'm dying, please save me... I've got 99 stacks." We're like; "lets learn..."

We're curious enough to "tinker around" and to explore... You get it though.

You're rich and I'm still curious... Gross over reaction on this thread.... to my curiosity...

Thought I can say this. #Respect - to you all.

[golf2014]

Scott Williams was 1000 percent correct. Why even post this when it's not your money..so true.

[CreditGuy]

Why even post this when it's not your money..so true.

Unless there are people here working for free, this is the opposite of "so true". People may not participate in every deal they fund, but they do earn a wage, build market share, create enterprise value, establish recurring cash flows, shape a brand, contribute to intrinsic self worth, etc., which can yield returns well beyond a 6 month 1.30+ rate factor. The venture and private equity funded folks didn't take OPM because they weren't confident enough in themselves have any skin in the game, but because investors were confident enough in management after a metric buttload of due diligence that they wanted some of their skin in someone else's game.