[Lendvo]

Recession hit rate - with where we are now- on the state coincident index chart this metric is over 50%. Something to keep an eye on for everyone, could be a blessing to some and a curse to others.

http://www.calculatedriskblog.com/20...t-indexes.html

[mcaguru]

I don't think its effects the short term funders at all . Maybe the guys doing 12-18Mo terms ...

[Lendvo]

I don't think its effects the short term funders at all . Maybe the guys doing 12-18Mo terms ...

The magnitude of a recession will matter but a moderate to deep recession, IMO, should look like this for the SME alt lending industry:

- Higher charge-offs mean large, low rate, semi/full automated lenders (credit cards, lending club, amex, paypal, shopify, kabbage etc) must reduce credit availability, increase rates, reduce marketing budgets to account for higher loan losses.
- As consumers pull back more small businesses encounter cash shortages, especially restaurants and retail.
- Previously higher-quality merchants have deteriorating financials and credit, leads them to fall back into the MCA rate space.
- All Funders experience higher charge-offs and many bust or tighten credit standards
- All Funders find that the reduction of 'other credit' i.e. credit cards, personal loans, HELOCs, stacked MCAs, title loans etc means more of their borrowers experience problems in repaying their business loans or MCAs.
- Some institutional sources of capital pull credit lines and/or cease to issue additional credit to funders