[easyfund]

Lately, I have been seeing a huge disparity in the files my team has been bringing in. I am seeing either a guy that has been in business for 30 years, 750 Credit, $250k monthly with $50k ADB or a guy who has been in biz for 3 years, 500 credit, $20k monthly with 10 neg days and not much in between.

My question is who is out there other than Breakout, Funding Circle, LendMe, etc that could do something on a monthly payment or even a weekly payment but with low enough rates to attract these A paper files? Secondly, I know it doesn't make sense for most companies to work with business constantly in the negative, but more often than not, I will tell the merchant to try and stay positive over the next 90-120 days and call me back when they clean everything up a little. Every single time that happens, some small funder I've never heard of, comes in and gives the guy $4,000 @ 1.50 for 42 days. Who are the guys out there funding these unfundable deals?

Looking forward to the insight...

[ridextreme]

I think every merchant tries to stay positive, I don't think they're going negative on purpose so it's pretty much beyond their control when they're in the red. So I don't think asking them to stay positive is going to make a difference.

[mcaguru]

Cresthill / Mantis is in the top 3 of funding companies that fund merchants that have negative balance days .... we are the original group of people funding MCA's so we know how to fund these subprime files@!!

[paulypubco]

We will fund the "unfundable" sub primes. check PM

[Vfunding]

I think every merchant tries to stay positive, I don't think they're going negative on purpose so it's pretty much beyond their control when they're in the red. So I don't think asking them to stay positive is going to make a difference.

Rid I agree. However after many years in the biz it's become clear to me that companies see their overdraft privileges in one of two ways: Either as an excuse to not pay attention to their daily cash flow (which can cost $30-70k a year for a decent book keeper), or they just see it as a credit line. Even though the bank won't approve them for a "credit line", they are willing to cover payments they make (usually) even if the $$ isn't there. Rather than charging "interest" thy just charge $30 per transaction while you're in the red. Most business owners don't convert the NSF fees to an interest rate which would probably make them sick. Bottom line is bank account management is habitual and it's a conscious decision. I've seen very few files come back around months after being declined for "excessive NSF's" that are now totally cleaned up.

[BB_Cooper]

Agreed, VFunding. Many of the habitually negative merchants understand the difference between a negative balance and unpaid items. The overdraft limit is just another credit product to this type of merchant. And before Reg E, banks would market overdraft protection as a credit product. But it's also the overdraft protection that makes many of these 5+ negative days a month merchants fundable-

[easyfund]

We are deviating from the original premise of the post. Obviously, business owners do not purposely operate in the red, but most merchants that do, are the ones that send in their file quicker than anyone since they are in such bad shape. There are a multitude of explanations as to why a merchant would continue to operate in the red and rarely do I see a file that was declined for NSFs come back and be "totally cleaned up." But we do make a note in the system to follow up with these merchants that were DK'd by YSC, Mantis, Pearl, etc.. for negative days and NSFs down the road. While they may have gone from 8 neg days down to 5 in that time period, there's almost 9 out 10 times someone named Dooms Day Funding or something in there that funded them when they were shopping around the first time. My question was who are these people? And at the other end of the spectrum a merchant who is not interested in 18 month 1.36 from QuarterSpot what other cash advance programs are available today. I can always find a home for a B-C paper deal, but the A+ and D- is where I'm having trouble..

[MCAVeteran]

try a split mca. we have saved several deals that had marginal banks and would otherwise have been a decline on an ach. mca is still a viable product out there for those merchants who accept cc sales. split is a great repayment model IMO even today.

[mcaguru]

If your classifying D- As in merchants that defaulted on other cash advance firms or have in the present-past financial crimes or judgements that clearly paint a picture that he never satisfied a financial institution that ever lent-him a hand then YES we would decline those kind of files.

[Cash_Village]

If your classifying D- As in merchants that defaulted on other cash advance firms or have in the present-past financial crimes or judgements that clearly paint a picture that he never satisfied a financial institution that ever lent-him a hand then YES we would decline those kind of files.

U guys still white label?

[Kevin Henry-Seacoast]

Lately, I have been seeing a huge disparity in the files my team has been bringing in. I am seeing either a guy that has been in business for 30 years, 750 Credit, $250k monthly with $50k ADB or a guy who has been in biz for 3 years, 500 credit, $20k monthly with 10 neg days and not much in between.

My question is who is out there other than Breakout, Funding Circle, LendMe, etc that could do something on a monthly payment or even a weekly payment but with low enough rates to attract these A paper files? Secondly, I know it doesn't make sense for most companies to work with business constantly in the negative, but more often than not, I will tell the merchant to try and stay positive over the next 90-120 days and call me back when they clean everything up a little. Every single time that happens, some small funder I've never heard of, comes in and gives the guy $4,000 @ 1.50 for 42 days. Who are the guys out there funding these unfundable deals?

Looking forward to the insight...

Easyfund,

One reason why companies go negative is because their customers take so long to pay them on invoices. Factoring the invoices can certainly help in this manner and be more cost effective than taking advances.
Happy to discuss.... Kevin.Henry@SeacoastBF.com

[GIGATT50]

Very good question. I am experiencing the opposite with a restaurant client that is also an accounting client. He has negative days as well and was just funded 60 days ago and needs capital again. Who are these funding companies that could help him? He does $40k per month but is struggling seasonally right now. Any ideas?