Need a Funder or Vendor? START HERE

Results 1 to 16 of 16
  1. #1
    A forum user Reputation points: 2147483647 Sean Cash's Avatar
    Join Date
    Aug 2012
    Location
    New York City
    Posts
    1,878

    Lightbulb Merchant Cash Group's Fast Funding Equity Program???

    I'm not sure how much Merchant Cash Group has shared about a program they have in development, but their fast funding equity program is rumored to have some game changing features:
    • The purchase price will reflect the total of 8 advances (it is basically a HUGE advance disbursed in increments every 6 weeks over the course of a year)
    • No renewal contracts are needed for each successive disbursement. The merchant just gets funded and the ISO just automatically gets the commission (8 automatic commissions in a year!)
    • A lock-in feature that prevents the merchant from getting bought out and refinanced to another funder



    Hopefully a representative at Merchant Cash Group can elaborate and provide more details. I think it will be interesting if a merchant is getting a contract for $50,000 instead of $6,000 despite the fact that there are incremental payments.
    Last edited by Sean Cash; 02-26-2013 at 04:13 PM.

  2. #2
    Senior Member Reputation points: 2463
    Join Date
    Sep 2012
    Location
    Gainesville Florida
    Posts
    167

    Quote Originally Posted by sean bash View Post
    I'm not sure how much Merchant Cash Group has shared about a program they have in development, but their fast funding equity program is rumored to have some game changing features:
    • The purchase price will reflect the total of 8 advances (it is basically a HUGE advance disbursed in increments every 6 weeks over the course of a year)
    • No renewal contracts are needed for each successive disbursement. The merchant just gets funded and the ISO just automatically gets the commission (8 automatic commissions in a year!)
    • A lock-in feature that prevents the merchant from getting bought out and refinanced to another funder



    Hopefully a representative at Merchant Cash Group can elaborate and provide more details. I think it will be interesting if a merchant is getting a contract for $50,000 instead of $6,000 despite the fact that there are incremental payments.


    Merchant Cash Group is extremely proud to be rolling out this new program soon. We will be opening this up to agents currently signed up with us and over the next few weeks be opening it up to new agents that would like to come on board.

    Our main goal behind this new program is to give agents a better product to sale to merchants who have sub prime credit and make it so that it is more competitive in the space by having the bigger contract amount. We are also going to be making this a financial benefit to the ISOs as we are doubling our commissions on this program.

    We are very excited where this new program can take Merchant Cash Group and what it can provide to the agents in the space.

  3. #3
    Senior Member Reputation points: 2463
    Join Date
    Sep 2012
    Location
    Gainesville Florida
    Posts
    167

    Quote Originally Posted by directlender View Post
    this is dope!

    Thanks... i think i will use that description in our new ad material

  4. #4
    Veteran Reputation points: 134971 Chambo's Avatar
    Join Date
    Sep 2012
    Location
    New York City
    Posts
    3,174

    Pearl/Zeines Partners used to do something like this. Send out the advance in increments.

    what are the caveats for NOT sending out the subsequent round? I mean, it's not like a merchant signs a $40,000 advance contract paid out in 8 increments of $5000 and they're guaranteed all five, right?

  5. #5
    if a merchant needs $50K they arent going to go with a company who says I'll give you $10K today and increments as you perform with us- This just seems in my opinion as a way for a company to mitigate their own risk to giving out the full $50k at once- Too many funders out there will give the full amount upfront to a qualified merchant without the need of increments....

  6. #6
    Senior Member Reputation points: 2463
    Join Date
    Sep 2012
    Location
    Gainesville Florida
    Posts
    167

    Quote Originally Posted by Chambo View Post
    Pearl/Zeines Partners used to do something like this. Send out the advance in increments.

    what are the caveats for NOT sending out the subsequent round? I mean, it's not like a merchant signs a $40,000 advance contract paid out in 8 increments of $5000 and they're guaranteed all five, right?

    We are buying 40K of the receivables so there for as long as they do not default on the contract they are guaranteed to receive the disbursement on the specified dates, and it is actually 8 disbursements every 6 1/2 weeks over a year.

  7. #7
    Senior Member Reputation points: 2463
    Join Date
    Sep 2012
    Location
    Gainesville Florida
    Posts
    167

    Quote Originally Posted by MCAVeteran View Post
    if a merchant needs $50K they arent going to go with a company who says I'll give you $10K today and increments as you perform with us- This just seems in my opinion as a way for a company to mitigate their own risk to giving out the full $50k at once- Too many funders out there will give the full amount upfront to a qualified merchant without the need of increments....
    This program is designed for merchants who have credit issues and therefor would not receive 50K up front as they are too high of risk to give them 150% of their receivables up front. It is true that if a merchant needs 10k or 20K and we are only offering 5 or 8 that the product might not be right for them but no one in this business has a 100% conversion rate on the deals they receive and that is because not every program is right for every merchant. If you want to compare this program to a 6 month program i will go ahead and give you an example of how this works.

    A merchant processing 30K on average a month under our Equity program will receive a contract for 76,000 and will receive 8 disbursements of 9,500.

    Now a merchant processing 30K on a 6 month program could receive a contract of 30K to 35K but would only be eligible for more funds around the 5 month mark (under most companies) by the time they are eligible for a renewal with that company we have already given them 38,000.00 and they don't have to go through the renewal process each time.


    So it is just what makes sense for the merchant and some times receiving a steady flow of cash infusion every 6 1/2 weeks just makes sense.

  8. #8
    "A merchant processing 30K on average a month under our Equity program will receive a contract for 76,000 and will receive 8 disbursements of 9,500."

    So in this example, you account for this specific merchant example doing a projected $360,000 in future cc sale business over 12 months and are willing to advance them $76,000 of that $360,000, or, roughly 21% of the annual projected cc sale volume through increments every 6.5 weeks. What about the ISO who is only getting commissions on 9,500 and you mentioned "as long as they do not default" does that mean the ISO could only get commission on 9500 and if the merchant defaults they do not get it on the other disbursements? Is default defined as a slow pay or a material breach of contract?

  9. #9
    Senior Member Reputation points: 2463
    Join Date
    Sep 2012
    Location
    Gainesville Florida
    Posts
    167

    Quote Originally Posted by MCAVeteran View Post
    "A merchant processing 30K on average a month under our Equity program will receive a contract for 76,000 and will receive 8 disbursements of 9,500."

    So in this example, you account for this specific merchant example doing a projected $360,000 in future cc sale business over 12 months and are willing to advance them $76,000 of that $360,000, or, roughly 21% of the annual projected cc sale volume through increments every 6.5 weeks. What about the ISO who is only getting commissions on 9,500 and you mentioned "as long as they do not default" does that mean the ISO could only get commission on 9500 and if the merchant defaults they do not get it on the other disbursements? Is default defined as a slow pay or a material breach of contract?
    In regards to the % of funded- yes that is correct as once again these are merchants with tax liens, judgments, credit below 550 and therefore all starter and decline programs offer below 50% of their volume, due to the risk.

    We are giving iso's 20% of the initial disbursement so on that $9500 initial disbursement the agent would 1900.00 and every subsequent disbursement would get 5%- we do heavy incentive up front due to the likely hood that the deal will go bad at some point during the advance ( once again due to the type of merchant we fund) if the advance is carried to term the iso would make 8,550.00 over the course of the year. Which works out to be 11.25% of the contract amount.

    Default is considered a breach of the contract ( so yes slow pay does calculate into it but not if the slow pay is accounted to seasonality)

  10. #10

  11. #11
    Senior Member Reputation points: 15507
    Join Date
    Dec 2016
    Location
    Brooklyn N.Y.
    Posts
    428

    What do the dailys look like? How fast do you pull the actual net-funded back?
    Last edited by MidnightAdvance; 04-05-2018 at 05:40 PM.
    High risk paper

  12. #12
    Quote Originally Posted by MidnightAdvance View Post
    So basically - it's a reverse consolidation, without the consolidation? (call it a "reverse advance")
    What do the dailys look like? How fast do you pull the actual net-funded back?
    Your right! The only difference is that instead of a weekly disbursement like a reverse consolidation they will receive a disbursement every 6.5 weeks. MFS Global has been doing this for awhile. They have a guaranteed funding program with approvals up to 200% of gross monthly, disbursements every 6 weeks over 14 months.

  13. #13
    Senior Member Reputation points: 15507
    Join Date
    Dec 2016
    Location
    Brooklyn N.Y.
    Posts
    428

    Quote Originally Posted by SFllc View Post
    Your right! The only difference is that instead of a weekly disbursement like a reverse consolidation they will receive a disbursement every 6.5 weeks. MFS Global has been doing this for awhile. They have a guaranteed funding program with approvals up to 200% of gross monthly, disbursements every 6 weeks over 14 months.
    How much do they pull back (say the merchant nets 10k week 1. how much is paid in before the next 10k?) and how much are they out at the peak?
    High risk paper

  14. #14
    Senior Member Reputation points: 216519
    Join Date
    Feb 2017
    Posts
    3,334

    PS: MFS pays 20 points on the first two disbursements, and 10 points on the rest.

  15. #15
    Banned Reputation points: 179851
    Join Date
    Jun 2017
    Posts
    2,051

    You Guys do realize this thread is from 2012 right?

    It is like you guys are essentially discussing something as relevant as Cash4Declines - 1st Merchant Starter Program

  16. #16
    Thank you Ryan
    Jacob Gabriel
    Merchant Cash Group
    Jacob@merchantcashgroup.com

Tags for this Thread



Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  


INDUSTRY ANNOUNCEMENTS

BoA launches business loan marketplace
Quickbooks adds new LOC product
Dext Capital upsizes corp note


DIRECTORY