[MCAVeteran]

chambo- that day isnt happening. smoke mirrors have gone on since the bz started- its the culture of the industry to inflate numbers. everyone does it and those who go and post all these huge volumes everyone behind the scenes is cutting those numbers in half as the real #s and taking 75% out as renewals not new deals on monthly annual reports. i get it- inflate and stick out your chests to try and get more brokers believing you have a secret sauce to funding more- can we all admit that the maj of #s reported is renewal business not new sourced deals that are taking on an advance for the first time?

[Sean Cash]

in regards to MCC, I don't doubt their numbers at all. A lot of people inflate their figures verbally, but a place like PRWeb would be a bad place to do it for MCAers, especially if you ever want to raise capital.

If someone were to use that information in someway to make an investment or financial decision, they could later on claim they were misled by statements the company knew to be false. We're not publicly traded companies here and the imagination tends to run wild when the funders take the sales guys out for drinks, but memorialize the figure in writing in and put it in the not-so-mainstream news media and you're at least opening yourself up to lawsuits.

It would suck to raise $50 million, default, and then find out you're personally liable because you put out fake reports prior to getting the funding.

But anyway, renewals are a huge part of the business. The percentage of new deals to renewals everyone is doing is unknown, but it's still money out the door at the end of the day OR IS IT?

Everyone's doing Refis instead of add ons now You can fund $100 mill, but withhold $30 million and apply it to the outstanding merchant balances. $70 mil goes out the door but $100 mil goes on the books.

If I write a contract between myself and myself to fund $122,000,000 to pay back $122,000,001 but I withhold $122,000,000 and apply it immediately to my balance so that I only owe a dollar, would that make me bigger than Yellowstone?

[Chambo]

I agree with you Sean, renewals are revenue the same as anything else. A company with a strong renewal book is actually more attractive than some Johnny come lately, because it shows they are doing something right to retain clients. Brokers are paid on renewals, so why not include it in the numbers? Lord knows renewals are added on P&L and Balance sheets and reported to IRS as income, so to claim "renewals don't count" is silly and unrealistic.

As far as MCC, yeah, they did probably hit the $10 million mark (about freakin time!). But to hit is once and then claim they are continually doing it is misleading.

Sort of like Notre Dame claiming to be number one when they are undefeated (against panzies) and then they come out on the REAL field with REAL players....and the truth comes out. sheesh!

[MCNetwork]

The problem with renewals is that the risk of default increases with each subsequent renewal. If the merchant is unable to become profitable, then it's only a matter of time until the house of cards comes tumbling down.

[Sean Cash]

MCNetwork, maybe if you're funding an unprofitable dying business.

[Chambo]

Mr. Network, true....but what does that have to do with gross monthly fundign numbers?

How much money you are putting out there is one figure. How profitable you are on those numbers is another.

You can fund $2 million a month and have half of that default. You still funded $2 million that month.

All depends on how the proitability is reported. Now if we want to judge these MCA's by how profitable they are, it is a whole different ballgame. ESPECIALLY considering most of these guys are NOT profitable.

[MCNetwork]

I'd like to see some metrics on which MCA customers are running profitable businesses. My guess is that the majority of the merchants with personal FICOs below 550 are not profitable.

[Chambo]

Seen many a deal killed because P&L doesn't show a profitable business

[MCNetwork]

Seen many a deal killed because P&L doesn't show a profitable business

P&L is not a reliable indicator for MCA worthiness because a lot of business owners show a loss for tax purposes even though the business isn't really doing that badly.

[Chambo]

You're preaching to the choir. I tell these folks all the time....showing a loss on your P&L is NOT necessarily a sign of a weak business, but more a sign of a good accountant!

[Chambo]

You reading this jeremy???!!!!!