[HDF]

Right now we fund the High Risk arena. (we understand this space like an f-16 pilot on the side of air-force one on a rainy night) But if market dictates us into A paper will be in the space in 30 days.

And you'll be looking for a job. No A paper lender can afford to carry a jackass like you as a frontman.

[mcaguru]

and well done finding that typo was the first thing you said today that anyone will agree with

John, I read very carefully everything you say.

[mcaguru]

And you'll be looking for a job. No A paper lender can afford to carry a jackass like you as a frontman.

Looking for a job? my moms grandparents came to America and took the monopoly game a little to seriously.

[WhoisKingsley]

There are different perceptions of this industry from a Broker standpoint as well as your direct lender/funder - whether it's "A" paper or high risk, stacking, etc.

This is all going back to the subprime mortgage crisis. You can compare our high risk product to an adjustable rate mortgage. You had a product that lowered it's lending standards to be accessible to consumers. There were multiple options when it came to paying back- but overall introductory prices and the ease of getting it was the main "selling" point. Rates were based on the market and the base rate depended on the cost of the lenders capital. The Mortgage Broker is the icing on the cake and ladder originator in the market and even though they have nothing to do with the fact that the consumer is responsible for their decision (research and agreeing to the terms)- they were puppets of the industry to flood the market with the overall understanding of "how easy" it was to own your own home and afford it "now". The predatory practices are obvious there.

Fast forward a few years later but take the consumer and match them to a business owner. You have "A" paper lender/funders (banks or non-banking institutions) and the "Subprime" Paper going down the same road. You have Merchants taking out advances/loan products that are not broken down/explained correctly for what they are. Our industry is not advancing logically. We went from taking a % of credit card receivables, to saying sh*t- they don't take credit cards so an ACH payment product was created, to now figuring out how to appease investors and at the same time adhere to Main Street's needs of transparency and better qualifying of the many products that are "invented" by those who are trying to put a number on future receivables (key word:Future) and offered by those who don't understand the ins and outs of finance and/or business or overall how to qualify.

This isn't all about stacking- there are a lot of factors that play into the different coalitions getting together with gov. and regulators to put the pieces together to omit another crisis. You can't really point a finger. You can be an example of positive future changes but enable at the same time

BTW- adjustable rate mortgages were regulated and the crisis still happened... then the bail out...etc. BUT then this happened a few years later .... http://www.philadelphiaherald.com/in.../sid/224972439

What will happen to us?

[Chambo]

would love to see one of these ISO's try to wiggle out of a ONE BILLION judgment, much less 17 billion.

[Cfairbank]

It's great to see that there are several groups advocating on the industry's behalf with policymakers these days. Two years ago, nobody was. We have come a long way for sure. Yes, there are philosophical differences that keep some companies apart and there probably always will be.

I did have the privilege of joining the CFC on their most recent trip and I can say that topics covered in the meetings are fairly straightforward.

• Why aren't banks lending to small business?
• Job preservation and creation
• Distinguishing "lenders" using chartered bank partnerships from alternative methods
• Dodd-Frank's impact on the industry at present and potentially in the future
• Distinguishing commercial transactions from consumer transactions

It's all about education at a macro level. It's not about whose rate is the best, etc. at least it shouldn't be.

Steve Denis and the SBFA are a great group as is the CRBF that Carl is part of. But so is the CFC as far as the ability to communicate the underlying issues of our time, which is why banks aren't lending to many small businesses and the role that private companies are playing to fill that void.

Sean, thanks for the intel and you are focusing on many of the critical points. Let me ask you and Isaac this, and feel free to respond off-line. Is there an effort to create and promote best practices through the CFC or is it just a recommendation for Congress/regulators to take a "hands off" approach? Will the CFC support an initiative to improve cost disclosure and transparency?

Thanks for your feedback Carl.

Do you speak for the SBFA or just for yourself? I only ask because on our trip to DC we met with Steve Denis and spoke at length about the best ways to work together and about sharing the same goals.

Additionally, in an effort to "come together" as a space that Isaac alluded to, how do we address the stacking problem? Everyone except the stackers (and the brokers that are only selling high risk paper) would agree that high risk stacking (magnified when it occurs right after the first position deal or multiple positions) is not only damaging to the businesses, but it's also raising the cost of capital for ALL small businesses. Is the expectation that this is an issue that we can collectively address through self regulation?

I sincerely am interested in feedback, as I agree with the need to work together as an industry... when it comes to the products we can defend (and I'm not focusing on price, i'm focusing on practices). Let us know what you guys are doing to implement "best practices".

[CreditGuy]

You'll never get a straight answer from Isaac. He is always here when it time to boast or champion his business, but there is no way in hell he'll go on record saying that stacking is bad, because that is his business model. He'll also never go on record saying stacking is acceptable, because that would be admitting guilt. There's no winning for him. I'm sure he'll pop up in another thread though posting pictures of some boiler room like shenanigan in his office raffling off piles of cash.

[jfeinberg]

CreditGuy What Company do you work for?

[CreditGuy]

Why does that matter?

[isaacdstern]

Instead of sticking our heads in the sand and hoping it all works out in regards to regulation We formed the CFC and are actively engaging senators, congressman, AG's etc. As many of you have said there are a lot of groups our there pushing their agenda and my ideal scenario would be to find a way for all of us to work together towards a common goal. When we were in DC last week we met with Steve Denis and he felt that would be the most effective way to tackle this.

Creditguy I don't know who you are so I am pretty sure i don't have an issue with you but feel free to reach out to me anytime if you would like to discuss more in detail what the CFC is all about. Here is my cell number (917) 743-8369

You'll never get a straight answer from Isaac. He is always here when it time to boast or champion his business, but there is no way in hell he'll go on record saying that stacking is bad, because that is his business model. He'll also never go on record saying stacking is acceptable, because that would be admitting guilt. There's no winning for him. I'm sure he'll pop up in another thread though posting pictures of some boiler room like shenanigan in his office raffling off piles of cash.

[CreditGuy]

Thanks for proving my point, Isaac.

[Cfairbank]

Instead of sticking our heads in the sand and hoping it all works out in regards to regulation We formed the CFC and are actively engaging senators, congressman, AG's etc. As many of you have said there are a lot of groups our there pushing their agenda and my ideal scenario would be to find a way for all of us to work together towards a common goal.

Again, what is the "common goal"? Will your group work towards a set of best practices?

[isaacdstern]

We are actively working on our best practices list and will have it available ASAP!

[Karen37a]

I would like to join these organizations. I am a small player in this industry but its like undercover boss, you really do not know whats going on until you do all the jobs or functions of this business and see all sides of the fence.

IMO. I do not think people that are strong advocates of A paper alone..OR D paper alone, have the best chance of making the best arguments because people see their world from their perspective and theirs alone.

[Karen37a]

BTW. Just to put this responsible funding idea out there again, and the opposite side as a ISO/Broker

I have begged, harangued, pouted, pleaded, ..etc etc to the underwriters/ lenders/owners to fund ahead of schedule, renew early, payoff another lenders advance ...( so the numbers would not be in the exact range for 100% responsible funding wherever that number is ).

So I myself am not miss perfect. But where is the line in the sand that you do not cross? and where is your line in the sand?

These are the decisions that have to be made internally so no one ever steps in ... IMO

[Cfairbank]

And this is why these high risk companies can't be the "face" of the industry. Thankfully, this author is smart enough not to paint the whole industry with the same brush -- but not everyone understands the space well enough to understand how different an OnDeck is from a Yellowstone. And for those that questioned my view that those Yellowstone videos do nothing but make them and the rest of the space look bad, read the article. All they are doing is adding extra fuel to the fire.

https://www.nerdwallet.com/blog/smal...nding-brokers/

[jotucker1983]

Carl,

I love your insights buddy, but I could go through that Nerd Wallet article and pick it apart piece by piece with information that was just either flat out wrong, or an exaggeration.

- What I'm against is the fraud in the industry and the excessive stacking.

- Our product is expensive and I fundamentally do not believe any merchant takes out our product because a salesperson "walked through the door and smiled at them". The merchant was in need of capital and took out the product.

- Maybe the question ought to be, why is it that the traditional system isn't serving these merchants, and an alternative one has to be developed with high costs (due to not having the leverage that traditional systems have to handle losses) in order to accommodate them?

- The merchant is growing and needs a $30k piece of equipment. Leasing is determined to not make sense for the merchant or maybe the merchant can't get approved for leasing. No traditional bank or finance company wants to loan the merchant money. So "John Tucker" says he'll do it for $30k over 12 months with a 1.25 cost factor, with a 10% holdback on his V/MC. The alternative is to just not invest in his business and lose out on the growth/profits which also causes the economy to lose out on jobs/tax revenue.

Why doesn't Kevin Voigt of Nerd Wallet stop making goofy articles, setup his own platform, and lend the merchant some money then? By all means, Kevin Voigt, if you feel you can lend that merchant a $30k deal with a low-interest rate similar to the bank, then get your legal paperwork in order, and go right ahead! Take the business from me lol! But we know he won't do that.......