[Achfund]

Anyone else hear this word on the street?

[channin19]

Anyone else hear this word on the street?

Hasn't this happened before? Kind of like an on again/ off again high school relationship.

[isaacdstern]

Travis-this is absolutely not the case and I cant even believe I am even dignifying what you wrote with a response

from what i'm told, YellowStone reps are being less than reputable on the phone. A few YSC deals have apparently gotten funded by ODC and defaulted after a little more than a month.

[Chambo]

Well...the true word on the street is that ODC now does over 50% of their business direct (this is also backed up in their securitization prospectus). They are moving to do away with ISO's entirely. As a first blow, they are contacting a chuck of ISO's and offering ultimatum. Take a drastic cut in commissions or no more new deals. those who have no other options or power, take the bait.

I got two prequal offers for On Deck funding already for my Quickbooks accounts.

[Sean Cash]

Well...the true word on the street is that ODC now does over 50% of their business direct (this is also backed up in their securitization prospectus). They are moving to do away with ISO's entirely. As a first blow, they are contacting a chuck of ISO's and offering ultimatum. Take a drastic cut in commissions or no more new deals. those who have no other options or power, take the bait.

I got two prequal offers for On Deck funding already for my Quickbooks accounts.

for your personal quickbooks accounts or your merchants that have quickbooks?

[Sean Cash]

from what i'm told, YellowStone reps are being less than reputable on the phone. A few YSC deals have apparently gotten funded by ODC and defaulted after a little more than a month.

Everyone has had deals go bad right out of the gate. That'd be weird if yellowstone would say something to mislead merchants on the phone considering I think they fund or co-fund most of their deals.

I had clients who had been in biz for 10 years with 750+ credit tell me within weeks of getting funded, "I'm not paying this back. I dare you to try and do something about it." They weren't financially distressed, it wasn't that they hated me, and it wasn't because of something I said on the phone. They just made a judgment call or heard from a friend that if they took money from a company over the phone, that they could get away with not paying it back. One guy actually told me it was his lawyer's "theory" that he could steal from MCAs companies legally and he was testing it out on us and that he was sorry I was the account rep that had to deal with any misfortune from it.

I've seen merchants try to employ all of these strategies:

*Get funded, default, and immediately settle out of court for a lower amount

*Get funded, default, and wait for the company to write it off and then you don't have to pay

*Get funded and change your phone # because the company that claims to be in New York is probably in the Cayman Islands somewhere in reality and will never be able to do anything about it.

The amount of merchant fraud is astounding. The brazenness of some of the things these people try can be really discouraging when you are trying to help.

They're part of the reason why rates are high in this industry.

[rld]

Wow.. that is just insane!

I guess I am just lucky to have never had this happen to me.. I have been dealing with more clients that read every last word of the contract and need this that or the other changed because they are scared of going to jail because the contract says something about first position on all receivables without mentioning that factoring is ok.. most of my clients factor.. it is part of business these days.. so I have had to get more contracts amended in the last 6 months than the entire 14-15 years before.

I guess you need to be just as careful in this business as you do in the credit card processing industry.. and I have been left holding $20-30k debts more than a few times because a merchant would get a chargeback on a large purchase and not have the funds to cover the debt.

Part of the reason I moved over to this industry to begin with.. there is something nice about finishing a deal up and being able to get my commission and walk away.

[cashguy]

Oh this brings up a good question then you say all your clients factor which means there receivables are encumbered. So what your saying is all your deals are stacks then? Even if they only have one Mca. What happens if there is more than one Mca and your stacking a stack behind
a/r factor.

[Jared_Weitz]

Well...the true word on the street is that ODC now does over 50% of their business direct (this is also backed up in their securitization prospectus). They are moving to do away with ISO's entirely. As a first blow, they are contacting a chuck of ISO's and offering ultimatum. Take a drastic cut in commissions or no more new deals. those who have no other options or power, take the bait.

I got two prequal offers for On Deck funding already for my Quickbooks accounts.

What I've seen happening kind of industry wide is as funders direct sales grow they will weed out any ISO business that isn't comparable to their inside business. So if their in house runs at a 7% bad debt they're probably going to hold on to ISO's at 7-8% bad debt or less......What I see starting to happen is as the industry grows and the direct funders sales forces grow they can and will become pickier on who they do business with. There are of course the funders who take more risk therefore see higher debts and profits. Those funders will be less stringent on which ISO's submit.

[nwarshaw]

First, think in terms of valuation, new investors, going public, selling the company.
The big money guys looking at the industry want to control all or most of the distribution channel. If you buy a company that has 90% of its distribution controlled by 3rd parties, and after you buy it, they decide to go to another funder, you create a huge hole in what you bought.
Funders are rushing to get their controllable distribution up to around 75%.
The industry will always use brokers, but not as their primary or only distribution channel.

Second think in terms of regulation and stacking. In moving to a direct distribution, they also get to walk away from brokers with no loyalty to funders and merchants. It is and will continue to cleanse out the bad actors and allow the good partners to grow. It may even help keep regulators at bay, while they finish focusing on payday and title lending.

I think next, you will see brokers need to go through a vendor registration, get certified, go through some checks, etc.

*100% my personal opinion*

[Achfund]

I guess if it was happening that hypothetically an ISO's default rate was closer to 20%+ and they were grasshopping the deals a week later under, it would make sense to be cutoff eventually
Even if that ISO was funding 2m+ a month with the bank

[isaacdstern]

just to go on the record here....We never fund a deal with any outside funder and then fund on top of that deal a day or 2 later...our policy for all reps is that if you were paid a commission from an outside funder the only way you can fund that deal with another funder is to pay the deal off!

[Achfund]

Isaac, while on the record - care to shed light on why you were cut off from On Deck?
Sounds like other banks will eventually start to follow suit due to alleged bad practices
Its difficult to say no when a larger ISO like Yellowstone is funding a substantial amount of business. But when the P&L's are run on their book performance its bound to happen.

[Chambo]

Isaac, while on the record - care to shed light on why you were cut off from On Deck?
Sounds like other banks will eventually start to follow suit due to alleged bad practices
Its difficult to say no when a larger ISO like Yellowstone is funding a substantial amount of business. But when the P&L's are run on their book performance its bound to happen.

I believe I already answered that question for you. You may want to scroll up and re read

[Achfund]

Oh I thought maybe this article had something to do with On Deck Capital, trying to clean up their image and distance themselves from some members of Yellowstone Capital
Maybe this will shed some light for people who don't understand

http://finance.yahoo.com/news/wall-s...040007733.html

[isaacdstern]

Its pretty obvious based on the fact that your only 5 posts are targeting my company that you have some issues with us.....feel free to call me anytime to discuss whatever your issues with us might be...here is all of my contact info:

Isaac D. Stern – Chief Executive Officer
Yellowstone Capital LLC
Ph: (800) 955-2411
Fax (888) 315-8546
Cell: (917) 743-8369
Email: Isaac@Yellowstonecap.com

[mcaguru]

ACHFUNDS really ondeck? someone just said so!??

[mcaguru]

someone just explained that Ondeck is bleeding with heavy heavy portfolio losses and its causing major issues to go public with such large gashes. in order to try at going public again they are seeking to bandage themselves a little...some say way too late.... (im not wall street!)..

[isaacdstern]

Achfund-6 YSC bash posts and counting.....clearly you have nothing new or interesting to add here...I wrote this before and I will repeat it...if you have any issues with YSC I am offering to speak with you and do my absolute best to work out any issues you may have with myself or Yellowstone....oh and instead of hiding behind some generic name why don't you tell all of us reading here who you actually are

Isaac D. Stern – Chief Executive Officer
Yellowstone Capital LLC
Ph: (800) 955-2411
Fax (888) 315-8546
Cell: (917) 743-8369
Email: Isaac@Yellowstonecap.com