Who is good at coming in at 5th, 6th and 7ths?
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Who is good at coming in at 5th, 6th and 7ths?
Debt Collectors
There are so many weird funding companies, weird names youve never heard of funding all the **** deals.
PM sent
If you're chasing after 7th position funders you should instead be chasing after a new career...
Seriously? 5th, 6th and 7th positions, these are the reasons you are seeing regulation being passed in different states. You and the other bottom feeders are going to be the death of this industryQuote:
Originally Posted by Bestinthebiz
You mostly see these on high volume deals with issues. restricted industry, defaults, etc.Quote:
Originally Posted by J.Celifarco
Every bottom tier lender hops in for 30 days for 20k when they are doing 250k a month
Lol I feel like I have seen HFG on every crappy deal I come across. But I am no-one to judge, I personally do not deal with this type of paper either but that doesn't give me the right to call anyone a bottom feeder.Quote:
Originally Posted by J.Celifarco
Apparently you feel entitled enough to judge, so what do you suggest someone with a 500 credit score do if they need a set amount of money and they can only get it by combining a few positions ?
Do you suggest they just go out of business?
I understand your position, and why some funders hate this, if you are in a priority position, but then again you are in a priority position, if you underwrote correctly you will have no issues recovering your capital.
Many times these added positions keep the merchant a-float and lets the first and second position get paid.
But back to my original question, do you suggest that people are banned from any options if they have crappy credentials, let them die out because they are not as qualified and well capitalized as you?
LOL wow do you have the wrong company. First of all we are an ISO so doubt you can see us on any deal. Second of all ask anyone on this forum who knows us they know we don't touch these deals. We are 80% probably higher first position deals and nothing really over a second. So before assuming you know who I am you don'tQuote:
Originally Posted by FlexibleCapitalSolutions
To your other points there is no situation where a 4th, 5th or higher position in anyway helps the client. You are hurting the business more than they already are and putting a nail in their coffin for the hopes of making a little money. If you had a solution for the client that would actually help them then yes you should try, but 20k over 30 days at a 1.50 does not help someone. The best thing to tell that person is that another position will not help you and that they should look into other options. Dont try to justify these programs because there is no way that they can help any company ever. The couple of dollars you make on the file gives the entire industry a bad name and puts targets on all of our backs for regulators.
my mistake I though you were a different company then.Quote:
Originally Posted by J.Celifarco
But to your points:
" there is no situation where a 4th, 5th or higher position in anyway helps the client."
Who are you to decide this? are you God?
"You are hurting the business more than they already are and putting a nail in their coffin for the hopes of making a little money."
How could you possibly know this, again who are you to decide this or make a blanket statement like this?
"20k over 30 days at a 1.50 does not help someone."
Who are you to decide this?
wouldn't the owner of the business be more qualified to decide this than you?
"The best thing to tell that person is that another position will not help you and that they should look into other options."
If you are in this industry and you stay away from these types of deals, you know what type of conditions they are in, please give some examples of other realistic options for people in these positions. (since you clearly know everything)
"Dont try to justify these programs because there is no way that they can help any company ever."
I am not justifying anything, I am just curious what gives you the confidence to make all these statement and make decisions from your high horse on who needs or should take what, when and how.
What if one day something happens to your business(es) and you are no longer able to sustain daily operations but you have put in years of work to build it up and you need it to feed your family? Lets say, for whatever reason your credit and liquidity don't allow you to obtain traditional financing (Pandemic crushed you for example). Would you like to live in a world where you have the option to take expensive money but have a chance to fight for your business? or should you just have to go out of business because another grown adult that is not in your situation decided that they don't like this type of funding so too bad for you.
I am not justifying any type of funding, I just find blanket statements and opinions such as yours very interesting, becareful what you wish for life has a funny way of humbling you. I believe that everything should be fully disclosed to merchants, absolutely everything, even if it kills the deal but I still believe business owners should have the right to make their own decisions.
ALL IMO
Thank you, John! You're absolutely right here. There is no scenario where a merchant having over 3 open positions makes any sense. These SCUM LENDERS (you know who you are, get ****ed), that come in past the 3rd position are the reason why the MCA industry is getting unnecessary attention from lawmakers when you see people like ESENOW, for example, putting out $5k $749/day deals. There is no renewal game on positions like this and lenders like this give a bad name to the industry.Quote:
Originally Posted by J.Celifarco
Dewey, Cheatum, and Howe........Quote:
Originally Posted by Bestinthebiz
This is essentially the same thing as a ponzi scheme in a sense. You're taking money from 1 lender to be able to cover the payments of another. It's a terrible cycle that they never get out of and it does nothing for the renewal game. Merchants who have over 3 positions have no grasp of their business or finances.Quote:
Originally Posted by FlexibleCapitalSolutions
This isnt true.Quote:
Originally Posted by J.Celifarco
One deal I remember off the top of my head, kept taking short term 1.49's over and over and over. Always paid back. And it worked for her.
Was a car dealer, that got a significant discount for paying cash for cars.
It worked for her. The high cost was justified, and she made it work.
There are scenarios where a 30 day 1.50 will work. And where the short term high cost is justified, with the associated risk.
In alot of scenarios renewing a 1st or 2nd, makes less sense than stacking, paying a factor on remaining balances already factored. Renewals shoot that remaining balance up higher than a 1.50 (1.36 x 2 = 1.72 on 50% of the Advance? - add that with the original 1.36 on 50% of the advance - and where do you end up? lets say someone renews 3 times, it gets even worse. You can argue that stacking makes more sense in some cases.
How so? if your first position purchased part of your receivables, for example 25% specified percentage. Don't you have 75% left over to work with and negotiate with? how is it a ponzi scheme, these aren't loans by the way, it seems you dont understand this since your calling them lenders, and they also didn't purchase your whole business, they are purchasing a percentage of your receivables not all of them.Quote:
Originally Posted by TheUnderwritingProdigy
If the funder is stupid enough to take the risk and the business owner decides they need it what makes you better than anyone else to decide this.
Yes there is always a one off where anything can make sense, but for the large majority of businesses these loans in no way help and just make a bad situation worse. To speak in absolutes was wrong there is always the off cases but for the vast majority of businesses, these deals make bad situations worse.Quote:
Originally Posted by ryan $
Except that you are leaving them no money to run their business. What type of profit margin do you think businesses work on? If you are taking more money then they make after paying bills you are by definition hurting the business not helping.Quote:
Originally Posted by FlexibleCapitalSolutions
Quote:
Originally Posted by J.Celifarco
I am not disagreeing with you in certain scenarios, I see your point, but at the end of the day no-one is forcing these people to take it, and as long as everything is fully disclosed shouldnt the business owner have the right to make their own decisions?
I think were arguing two different things. You're arguing the math on hypothetical/imaginary scenarios based on your experiences, I am arguing against your absolute/blanket statements and against your desire to take options away from other grown adults who should have the right to make their own decisions. (as long as everything is fully disclosed)
business owners are capable of making there own decisions what will help or hurt there business. Funders can decide how risky and aggressive they want to fund.
Quote:
Originally Posted by FlexibleCapitalSolutions
Will never agree with knowingly selling someone something that I know will hurt their business. Especially when I know it is these programs that have put a target on the industry as a whole and will lead to regulations that could ultimately destroy the industry. Its not worth it for me or for the business owner
The craziest deal I've seen was a public traded company, they took about $10M in MCA, with over 20 positions, and in the end got a bailout, paid everyone off, never looked back. They're up more than 200% since then!!Quote:
Originally Posted by J.Celifarco
Well what really put a target on this industry's back is not the actual deals, its the way some funders in this industry acted throughout their business dealings with merchants and as far as you never agreeing and never being willing to offer something like this, I am on the same page, I stay away from offering these but I like knowing that its based on my decision not to do so..... not another grownup who is not in my shoes deciding that I am not allowed.Quote:
Originally Posted by J.Celifarco
A broker should help the merchant not stress the business.
Just like a Doctor shouldn't prescribe drugs that wont help the patient ...............Look what happened to Michael Jackson.
Quote:
Originally Posted by FlexibleCapitalSolutions
My 2 cents worth - Look up the definition of "Tortious interference" Funder #1`has purchased 100% of future receivables until they are repaid,
in a Merchant Cash Advance Contract.
Uhm, No. They Purchased a Percentage, not 100%, that's ridiculous.Quote:
Originally Posted by Yankeeman07
If the client has already pledged the assets under a security agreement and a lender/factor/funder has filed a UCC on the assets of the business, you would be interfering with the relationship even if you entered an agreement to purchase 1% of any or future receivables.Quote:
Originally Posted by ryan $
Most funders only file UCCs in event of default now a days.Quote:
Originally Posted by Kevin Henry-Seacoast
If there is no anti-stack addendum or clause. I am under the firm belief, stack away......
Dude from Horizon saying he does 1st and 2nds... If your arguing it breaks the contract, 2nds would break it just as much as an 8th position would.
If a company has any bank or non bank facility where there is a security agreement in place and UCC filed, the person that stacks (the funder and the company) are breaking the contract as ALL assets are already pledged to the company with a security agreement in place. The remedy would be to have a subordination agreement or inter-creditor agreement in place if a company enters any agreement where the assets are already pledged.Quote:
Originally Posted by ryan $
I din't argue the breaking the contract because i do give 2nd's even though I do see some merit to that argument. I am arguing that a business can only handle a certain % of their sales going to pay back a loan and giving a business a 4th or 5th position that takes the gross holdback way above what any business can handle is wrong.
Agreed.Quote:
Originally Posted by J.Celifarco
In most cases where you see 8 lenders in a deal, you may see 8 advances, yet still be under your % of what you see is fair...... this is because of issues with the deal.Quote:
Originally Posted by J.Celifarco
In other deals, merchants lose control and make poor decisions.Quote:
Originally Posted by ryan $
Yes, which is why ISO's shouldn't push more positions so that they can take money from Peter to pay Paul, and then find themselves with even greater daily payments, which results in them having to take an additional advance, and then another one, and another one... having a merchant go belly up means every funder gets screwed, and ISO's lose out on residual commission from renewals.Quote:
Originally Posted by ryan $
A MCA funder is purchasing 100% of "Future Receivables" and the repayment is a % of the daily/weekly/monthly receipts.Quote:
Originally Posted by ryan $
Whatever terms the contract states.
A true MCA, not an MCA disguised as a Loan (Consult an Attorney) the devil is in the details of the contract.
My niche market is "Credit Card Splits" - The funder I work with is purchasing 100% of the "Credit Card Receipts"
until the Full Purchase is repaid. No Stacking allowed and included is a hefty "No Stacking Penalty"
IMAPQuote:
Originally Posted by Bestinthebiz
Torro
East Shore
AJ Equity
Cooper Asset
HFH
Noble Funding
Spartan
Mantis
Last Chance
Yellowstone
Wide Merchant
Ironwood Finance
Main Street
ML Factors