[ssafirstein]

Breakout Capital recently introduced a new monthly repayment loan product, the Breakout Monthly Remit Loan, that we are now offering to the broader market after garnering strong interest with initial partners. This product was introduced to serve qualified (prime or near-prime) merchants who are looking for working capital over terms up to 24 months on a more traditional repayment basis (monthly). The Breakout Monthly Remit Loan can also serve as a replacement or bridge product for customers considering SBA loans, bank loans/LOCs, and/or other medium-to-long-term working capital loans that typically take several weeks or even months to secure with extended underwriting and funding stipulations required on those products. High level product details are summarized below:

• Term: 12 to 24 months
• Buy rates: Starting at 1.15x
• Maximum Loan Size: $150K (will selectively consider high quality files up to $200k)
• Maximum Loan Size to Monthly Revenue: up to 150% of monthly revenue, depending on loan size and term
  
  • $100K and above, loan amount must be less than 100% of monthly revenue
• Revolving line: merchant can draw additional capital after two scheduled payments, subject to a quick re-underwriting
  
  • If drawing only re-paid principal, there will be no increase in scheduled periodic payment
  • No double dipping (saves $2,500 to $10,000+ on each renewal)
  • Add-ons typically funded same day
• Early repayment discount available on every loan
• Basic Qualifications
  
  • Min 640 FICO score
  • Min 3 years in business
  • Average daily balance at least 2x monthly payment over last six months
  • Preferred industries only
  • Non-consolidation, unless single position with an “A”-paper lender
    
    • Will not buy-out “high risk” funders
    • No net requirement, but preferred (single position, “A”-paper buyout only)
  • Profitability not required
  • Commissions fixed at 5%; paid next day via ACH
    
    • This is meaningfully higher than standard commission of 2% with other monthly pay products
    • Underwriting / qualification criteria is much more flexible and expeditious than monthly pay competitive products

Please call or email me for more details regarding the Monthly Remit Loan and other Breakout Capital products

Steven Safirstein
Vice President of Sales & Head of ISO Relations
Breakout Capital Finance, LLC
6849 Old Dominion Drive, Suite 360, McLean, VA 22101
O: 703 852 6013 steven@breakoutfinance.com

[HDF]

Those pesky prime or near-prime business owners seeking capital... The Holy Grail.

[Cfairbank]

Those pesky prime or near-prime business owners seeking capital... The Holy Grail.

Ha! But finally a lower cost, monthly pay term loan ISOs can make more than two points on! This product generated a ton of interest on our limited initial roll-out, and after validating the demand we expected, we are rolling it out to all partners.

ISOs also have the ability to down-sell to other Breakout products, most of which also now go out to 24 months for deals that (a) may be better suited for the customer or not qualified for monthly pay; (b) can get a better rate through a weekly pay; or (c) require a higher commission than the fixed 5% on our monthly pay product.

Note: I believe (not including LoanMe's high cost product), this monthly payment product offers the highest commissions (relative to other monthly pay products) in the market.

[LoanMe]

Carl,

We would have to respectfully challenge your comment stating "LoanMe's high cost product". A general statement like this does not show all sides and the flexibility the LoanMe term loan product offers to borrowers. The cost of a LoanMe loan will always depend on the borrowers repayment behavior.

For example based on the guidelines you have shared above with a 640 borrower; this type of borrower could fall into our Tier B+ category which on our simple interest term loans, come with a 39% interest rate, 10% origination fee and 120 month term. I wont go into our lower TIB, or broader industry types, as this is your thread and we are not trying to compare our term loan product to your product. We would like to simply shed some light on your comment regarding LoanMe's cost.

We invite you to take a look a Scenario 1 in the example picture below where the borrower repays in 10 days. The effective "Cost" here is similar to a 1.12 factor and our partners do get their full 5% in commissions. As you stated above we also share in one of the highest commissions (5%) for a monthly repayment product as your new product.

For full disclosure, yes the cost could become high should a borrower simply make the minimum monthly payment for the full term. See Scenario 3. This is disclosed to borrowers and this example is public information from our website. We invite you and others to take a look for themselves. https://www.loanme.com/smallbusiness/rates

LoanMe example.jpg

We also rolled out a Fixed Payback product in June of this year which is an MCA Look-A-Like product with Monthly Payments.
12 months term, fixed repayments with equivalent factors as low as 1.16. (0.01 higher than your 1.15)
Please take a look here: http://conta.cc/28NmNfb

It seems that maybe you and others have a common misconception of the actual "Cost" borrowers could have across LoanMe's multiple products. I invite you and others to give us a call if you/they need any additional clarity surrounding the above or would simply like to discuss.

[HDF]

A nice product for a well informed borrower but - UNFAIR COMPARISON BY HDF COMING NOW-

That LoanMe grid projects the vivid image of a sub-prime neg-am loan made famous in that other industry.

And yes, I know it is not a true comparison by any means. But does ring a bell very loudly.

[Cfairbank]

Carl,

We would have to respectfully challenge your comment stating "LoanMe's high cost product". A general statement like this does not show all sides and the flexibility the LoanMe term loan product offers to borrowers. The cost of a LoanMe loan will always depend on the borrowers repayment behavior.

For example based on the guidelines you have shared above with a 640 borrower; this type of borrower could fall into our Tier B+ category which on our simple interest term loans, come with a 39% interest rate, 10% origination fee and 120 month term. I wont go into our lower TIB, or broader industry types, as this is your thread and we are not trying to compare our term loan product to your product. We would like to simply shed some light on your comment regarding LoanMe's cost.

We invite you to take a look a Scenario 1 in the example picture below where the borrower repays in 10 days. The effective "Cost" here is similar to a 1.12 factor and our partners do get their full 5% in commissions. As you stated above we also share in one of the highest commissions (5%) for a monthly repayment product as your new product.

For full disclosure, yes the cost could become high should a borrower simply make the minimum monthly payment for the full term. See Scenario 3. This is disclosed to borrowers and this example is public information from our website. We invite you and others to take a look for themselves. https://www.loanme.com/smallbusiness/rates

LoanMe example.jpg

We also rolled out a Fixed Payback product in June of this year which is an MCA Look-A-Like product with Monthly Payments.
12 months term, fixed repayments with equivalent factors as low as 1.16. (0.01 higher than your 1.15)
Please take a look here: http://conta.cc/28NmNfb

It seems that maybe you and others have a common misconception of the actual "Cost" borrowers could have across LoanMe's multiple products. I invite you and others to give us a call if you/they need any additional clarity surrounding the above or would simply like to discuss.

Scenario 1: APR is 254.0%
Scenario 2: APR is 78.5%
Scenario 3: APR is 43.7% -- this is a decent price from an APR perspective, but extremely expensive from a TCC perspective (another very important metric that should always be disclosed and evaluated). Since the loan is fully amortizing (I believe), it makes it even harder to pay off early given that the bulk of initial payback is interest. And what percent of your borrowers do take the loan for a year or more and pay you back early?

We are aware of your costs and of your product, which is why I pointed it out as an alternative in my message.

[Eagle Funding]

Can vouch for Carl Fairbank, the product is legit, they even let the client net nothing in the scenario where they are saving them a boatload. The stips were pretty easy also.

[Michael I]

trying to understand how loan me even in your scenario it is .01 point higher when there is 10% in fees .also you said the full 5% . i was always under the impression that it comes out to like 4,5% because you pay on the net after your fees .
side note loan me is great for the right clients and i cant wait for them to roll out what they can do in cali to other states

[LoanMe]

Scenario 1: APR is 254.0%
Scenario 2: APR is 78.5%
Scenario 3: APR is 43.7% -- this is a decent price from an APR perspective, but extremely expensive from a TCC perspective (another very important metric that should always be disclosed and evaluated). Since the loan is fully amortizing (I believe), it makes it even harder to pay off early given that the bulk of initial payback is interest. And what percent of your borrowers do take the loan for a year or more and pay you back early?

We are aware of your costs and of your product, which is why I pointed it out as an alternative in my message.

Carl,

Thank you for pointing out Total Cost of Capital. We appreciate the mention as an alternative and simply wanted to address the generality of your assessment of LoanMe. Everyone should understand that borrowers have the ability with the LoanMe product to control TCC, through their repayment behavior. Every business and situation surrounding the need for capital is different. The LoanMe simple interest term loan product offers borrowers flexibility they previously didn't have in alternative lending. It allows them to have more control over their TCC than a traditional MCA. All while given back a monthly payment option.

The shorter the borrower keeps the funds the better the TCC. Naturally, this ups the effective APR conversion similar to how you would convert and MCA payback number into a much higher APR than the presented "factor rate".

The LoanMe product is sold by the LoanMe internal agents and therefore we educate the borrowers on their early repayment options. Many of our borrowers do in fact pay off early, using the LoanMe product as a short term bridge loan. The longer terms (10 years) simply make the minimum monthly payments required lower (compared to MCA daily payments x 21) and more affordable for a business. It frees up cash flow and allows them to operate as needed.

Our loan agents use a web based simple interest loan calculator to educate borrowers on their TCC based on a repayment method that is comfortable for them. You are welcome to see this here: www.loanme.com/loancalculator

Good luck with your new product. Its nice to see more monthly payment products popping up in alternative lending.

[LoanMe]

trying to understand how loan me even in your scenario it is .01 point higher when there is 10% in fees .also you said the full 5% . i was always under the impression that it comes out to like 4,5% because you pay on the net after your fees .
side note loan me is great for the right clients and i cant wait for them to roll out what they can do in cali to other states

Michael,

The product we were referring to stating 0.01 point higher was speaking to our "Fixed Payback" product, not our simple interest term loan product.

Here is that section again for reference:

" We also rolled out a Fixed Payback product in June of this year which is an MCA Look-A-Like product with Monthly Payments.
12 months term, fixed repayments with equivalent factors as low as 1.16. (0.01 higher than your 1.15)
Please take a look here: http://conta.cc/28NmNfb "

If you click on the link above you can see this other product available in 29 states

Example of LoanMe's fixed payback product:
$50,000 loan
14% origination fee ( $7,000 fee)
$43,000 Net funded to borrower (commissions are paid on this funded amount)
0.00% interest rate
12 month term= $4,166.66 monthly payments. ( $4,166.66 X 12= $50,000 payback number)
Equivalent factor rate 1.16

Thank you for the kind words Michael. We appreciate working with you.

[Cfairbank]

I'm not sure how loanme hijacked this thread, but I guess perhaps I shouldn't have mentioned their product at all. We do not view loanme as a competitor for any of our products nor do we believe that their products, as hdf alluded to, will survive any semblance of best practices or product transparency (much less regulation). And if I remember right, LoanMe is just ex-cash call, that changed it's name or spun out parts of the business (now with a small business product) as a result of their reputation and previous sanctions (not throwing "mud", just hoping to add background here). If you guys want to push your product, go for it, just start a new thread.

If brokers want to have both products in their arsenal, that's fine. I just caution anyone about treating any of the loanme products as a true alternative to A paper lending (I'm not just talking about us) and be deliberate when describing cost and the trap that can be created with effectively a neg am product. Or a product that states "zero percent interest!". You need a VERY sophisticated merchant to understand their product, and an honest broker that will take the time to educate them on the product and that they need to figure out a plan to pay it off early.

Michael, I'm not sure if this was directed at me, or at LoanMe -- but we pay commissions on the Funded Amount (renewals is different because we don't double dip and waive outstanding interest), not the amount minus fees. So take this example: if we have a 100K loan, 2% origination fee (first deal, non-renewal), the commission will be calculated on the 100K, not 98K. Is that what you are asking?

APRs on our monthly product start in the 20s (not factor rate or interest rate, actual APR).

[LoanMe]

I'm not sure how loanme hijacked this thread, but I guess perhaps I shouldn't have mentioned their product at all. We do not view loanme as a competitor for any of our products nor do we believe that their products, as hdf alluded to, will survive any semblance of best practices or product transparency (much less regulation). And if I remember right, LoanMe is just ex-cash call, that changed it's name or spun out parts of the business (now with a small business product) as a result of their reputation and previous sanctions (not throwing "mud", just hoping to add background here). If you guys want to push your product, go for it, just start a new thread.

It was not our intention to hijack your thread, however we will respond when posters make general assumptions about LoanMe we feel need to be addressed.
Feel free to visit our website www.loanme.com for product transparency.
Incorrect. LoanMe has never been Cash Call.

If brokers want to have both products in their arsenal, that's fine. I just caution anyone about treating any of the loanme products as a true alternative to A paper lending (I'm not just talking about us) and be deliberate when describing cost and the trap that can be created with effectively a neg am product. Or a product that states "zero percent interest!". You need a VERY sophisticated merchant to understand their product, and an honest broker that will take the time to educate them on the product and that they need to figure out a plan to pay it off early.

Incorrect again. For someone claiming to know our product. There is no negative amortization on our loans. This is simple interest, not compounding.
0.00% interest rate is not the same as 0.00% interest or 0.00% APR. Additionally this is for Product #2 Fixed Payback. Not Product #1 Term Loan.
As mentioned we educate borrowers on our product through both the website and simple interest loan calculations on an individual basis direct with the borrower.

[Cfairbank]

Again, all Steve was trying to do was inform people of expanded distribution of a newer product we are offering and I now know to ensure we don't mention loanme on the forum. The loanme debate is not healthy for this industry since there is only one loanme, and the last thing I want (or, I believe, anyone else wants) is a broader focus or discussion on whether loanme' product is "good". I should have just stayed away, as there's enough other headline issues to worry about to throw this out there.

And in the last comment, all I am just stating we don't view this monthly pay or any of our products as a LoanMe competitor because loanme, in our view, is in a category by itself (folks can decide for themselves if that's good or bad). Re neg am, I agree, it isn't a true neg am (simply an analogy, and something to think about) but in many ways it is an effective neg am and this is why: 10 percent fee and 10 year product that amortizes means that you have to hold the product for a long time to start actually start paying off enough principal to even cover the origination fee given that the bulk of payments for first couple of years are paying interest, not paying down principal. I agree it isn't a neg am product, but it can (and likely will) carry the same perception.

I would like to know, though, what is the relationship? I was quite confident loanme was ex-cash call or at the very least, ex-cash call folks.