[MCNetwork]

The largest funders are failing because their operations were too massive to support any type of downturn in the business. They were under pressure to originate deals just to keep paying their overhead, which is a recipe for disaster. The next iteration in this industry will result in boutique funders who are much smaller and leaner and much more selective with their deals. The 1.20s and 1.30s can still be profitable as long as expenses are kept in check and cost of money and client acquisition costs are minimized.

[MCAFunds]

The largest funders are failing because their operations were too massive to support any type of downturn in the business. They were under pressure to originate deals just to keep paying their overhead, which is a recipe for disaster. The next iteration in this industry will result in boutique funders who are much smaller and leaner and much more selective with their deals. The 1.20s and 1.30s can still be profitable as long as expenses are kept in check and cost of money and client acquisition costs are minimized.

A 1.20 will never be profitable, a 1.20 can never break even. 1.30? Maybe, at best break even. Why does AMEX charge 27% to 55 Million businesses annually. Why do banks not lend to anyone with a heart beat, same reason why a 1.20 or even a 1.30 do not work. Put 100 Funded deals in a hat at a 1.20 and 1.45 and I will take the 1.45 all day. The ONLY way a 1.20 or 1.30 can work is IF and only IF, they have an exclusive no stacking etc etc etc clause.

[SBiz]

A 1.20 will never be profitable, a 1.20 can never break even. 1.30? Maybe, at best break even. Why does AMEX charge 27% to 55 Million businesses annually. Why do banks not lend to anyone with a heart beat, same reason why a 1.20 or even a 1.30 do not work. Put 100 Funded deals in a hat at a 1.20 and 1.45 and I will take the 1.45 all day. The ONLY way a 1.20 or 1.30 can work is IF and only IF, they have an exclusive no stacking etc etc etc clause.

So let's see here: A 1.2x over a 12 month term w a 2.5% origination fee - that's about a 43% APR? 16 pts higher than your AMEX example but at the same time is also lower than the industry A paper average through brokers.

It’s not just cost, it’s also about CTO, portfolio size, expense structure, and loss rates. Those are the things that drive profit for any lender whether at 1.45x, 1.2x, or anywhere in between. You can lose or make money at either rate, depending on your net profit margin per deal, portfolio size and expense ratio.

[MCAFunds]

So let's see here: A 1.2x over a 12 month term w a 2.5% origination fee - that's about a 43% APR? 16 pts higher than your AMEX example but at the same time is also lower than the industry A paper average through brokers.

It’s not just cost, it’s also about CTO, portfolio size, expense structure, and loss rates. Those are the things that drive profit for any lender whether at 1.45x, 1.2x, or anywhere in between. You can lose or make money at either rate, depending on your net profit margin per deal, portfolio size and expense ratio.

100% Agreed. My point is 1.) Overall Market Trends 2.) Overall Market Data 3.) Overall Performance. The overall market for Small Business Owners shows, that most businesses will not be in business the following year, hence, why the 4 month offers work. If what I was saying was false, than you and I both know this board will be lighting up like the Bohemian Grove that the world leaders attend.

My point is simple, small business owners live month to month, even the most sturdy and consistent businesses rarely make it past their 5th year in business.

If the industry pioneers like, CAN, Capify, MCC, OD and others were reporting and showing profits quarterly and annually, then I would not be stating this obvious trend and firm data. But as you know, 100%, that is not the case.

Good Friday to all!