[Cfairbank]

@World of MCA -- no offense taken at all, simply offering background -- and I do believe our approval rate should be higher across the ISO channel (especially for "standard" offers that the individual above mentioned), and we are working on that through a variety of initiatives. But to be clear, our products are not meant to compete with Funding Circle; but, using Funding Circle as an example, certain products (such as our monthly pay loan) are intended to address the gap between a funding circle loan and a standard weekly pay product. There are a massive amount of borrowers that fit into that category, where one or two variables lead to a funding circle decline, but you can still get a lower rate, long-term, and/or monthly pay product through us (e.g. we do not require profitability, but we do conduct our own evaluation to ensure we believe the capital is suitable for the business and that the business is an ongoing concern). Same type of concept with our Hybrid product -- addressing a massive gap in the market (and with the Hybrid product, we can be extremely aggressive on a much looser credit box; this is aimed at folks with AR -- for ISOs that offer factoring, you should find this product interesting and our approval rate is much higher).

And stay tuned on tech front....

[Fundyman]

FundyMan it seems you may be on the breakout cheerleaders squad but I am a realist.

Fundyman it seems your outsourcing lender list needs to be updated. I can help you to find better competitive rates. As it may seem that your low buy rates options are not that many!! Give me a shout Snaps!!
!

Craaaa, I'm not the type to join no cheerleading squad, no matter how much I would enjoy looking up a few skirts. It's just not something I have that much time for. But you did best to say that you're speaking based on your own personal experience. My experience was simple: I know when to send & when not to send a file to Breakout, so I'm a lot less disappointed with the results.

In general, it only takes a few deals sent to a funding company to see where their minds are at. Breakout made it clear: They fund, but not in ways that you expect; nor do they fund the merchants you expect. That's all. Many times, I feel I should get more commissions on a deal. Guess what: I don't send it to Breakout! Nor do I send it to Quarterspot.

All I know is I've gotten killer offers from OnDeck, and Breakout beat those offers or matched them. Had I never funded w/ them, I'm sure I would have had a different perspective of the company altogether. It all reverts to your main statement on experience.

As far as Snaps, I have no clue what that is. You should PM me some info.

[aredmond]

Credibly

[Cfairbank]

I haven't posted in a while, so figure this is a good time to provide an update on our products as I address the statement that Breakout=hard to receive approvals. For many partners, that is an entirely true statement; our underwriting and approval model is different than most in the space, allowing us to fund deals others won't but also be tighter where others may be looser; and this leads to the 80/20 result with ISO partners and a full admittance on my part that our approval rate isn't as high as I'd like it to be in aggregate (and i'm working on improving that). However, for folks that really understand our products, the right fit for each product, and what we look for in approvals, our approval rate should be industry standard for A paper.

So I agree with your statement; we are not a standard MCA funder where a new partner can join and immediately get a 50%+ approval rate; but our differences are what allows us to give strong approvals to partners who know our various products & underwriting criteria; for files that we view as an A-paper file, we are very aggressive in rate, term, and we do offer fully unique product features. A few highlights below:

1. We offer a monthly pay product with term between 12 and 24 months.
2. We don't only make 24 month offers every day, but we consistently close loans with terms of 24 months every day --
3. Our buy-rates start at 1.09x .
4. Bridge loans with structured as with longer term, but aggressive early repayment schedule (must be requested in advance)
5. While we offer daily pay, almost all offers are weekly or monthly pay
6. Net zero, balance transfer solution that ISOs can use to move their a-paper customers off of failed lenders
7. We can use hard collateral (but not real estate) or, more preferably, AR to de-risk a merchant, provide better rates
8. We do not double dip or having confusing fee sheets -- we do our best to offer the most merchant friendly product we can
9. I think everyone here knows if an app is sent to Breakout, it's 100% safe
10. We will do soft credit pulls
11. Ask your ISO rep about our hybrid product; only selectively available

[Karen37a]

PS No matter what anyone says...getting mca full docs in is like panning for Gold...you have to call a lot of people to get docs in, lots of follow up calls...the ones that come very easily, usually have huge underwriting issues.

Once you get the docs in... only a % can qualify ( they lie about their nsfs, liens, credit score, the balance owed, gross $ etc).Of the % that can "Qualify"...only a few get approved period including D paper

30% fund

Massive declines on top of other issues.Most cant do it (nor want to) so they look for a shortcut eg backdooring, fake crms.( like some Funders)

Low commissions and you are done for...too low rate ...done for ( defaults ). I don't want to argue over it...I've said it from the beginging...it just is what it is. Funding into sub prime..or sub sub prime. ( the A paper of mca is still subprime , and if they could go to the bank they should)

Point being...we are looking for a small sector in mca that can fit into that A plus criteria and when you have brokers trying to stay alive funding 1/2 deals..they are not going to go for the lowest commission, with the highest stips. If they do they fold.

[FlashGordon]

Breakout is the most difficult lender to work with. Tried sending them files, must have sent them over 50 submissions and literally couldn't get a normal approval. Meanwhile, I'm getting great offers and closing those same files with other A lenders. Waste of time.

[Eagle Funding]

Breakout is the most difficult lender to work with. Tried sending them files, must have sent them over 50 submissions and literally couldn't get a normal approval. Meanwhile, I'm getting great offers and closing those same files with other A lenders. Waste of time.

This is such an awful take, "I tried sending them files or you did send them files because your next line is you sent over 50 submissions and whats a normal approval even mean?

Breakout might not offer on every deal but when they do more than likely they will put out the best offer and best part is youll never lose the deal, their retention rate with clients is nuts and they dont screw merchants ever. (My experience) Carl and Steve have a product that will be around for a long time. (Fun note we have a client on their LOC type program that we have a client that every 2-3 months a commish comes without our involvement.)

[WestCoastFunding]

Karen, chill.

[Karen37a]

Karen, chill.

west. Imagine you knew( or guessed ) what was disclosed in some lawsuits because you figured it out in 2 seconds flat...then leaving because you didn't want to participate in it...to then have idiots for 2 years tell you how great certain companies are and how C/D paper sucks.

THEN they get a bright idea .."she must think this way because she is a criminal" ...then blasting a dui for over a year.
I had to listen to the bs. 2 years.( while staying silent)

Then the fools yelling at you, get their book of business stolen from them, others were bankrupted.

One that got 7800 files taken told me I needed to go to "underwriting school" Some poor rep on here got thrust in between he and I...they eventually threw him under a bus ( which I warned him about)

it has been interesting

Ill be on vacation soon...so I will be chilling

Ill let you know when I pull back up my Federal Charter to do loans...still doing mcas

[WhoisKingsley]

west. Imagine you knew( or guessed ) what was disclosed in some lawsuits because you figured it out in 2 seconds flat...then leaving because you didn't want to participate in it...to then have idiots for 2 years tell you how great certain companies are and how C/D paper sucks.

THEN they get a bright idea .."she must think this way because she is a criminal" ...then blasting a dui for over a year.
I had to listen to the bs. 2 years.( while staying silent)

Then the fools yelling at you, get their book of business stolen from them, others were bankrupted.

One that got 7800 files taken told me I needed to go to "underwriting school" Some poor rep on here got thrust in between he and I...they eventually threw him under a bus ( which I warned him about)

it has been interesting

Ill be on vacation soon...so I will be chilling

Ill let you know when I pull back up my Federal Charter to do loans...still doing mcas

west. Imagine you knew( or guessed ) what was disclosed in some lawsuits because you figured it out in 2 seconds flat...then leaving because you didn't want to participate in it...to then have idiots for 2 years tell you how great certain companies are and how C/D paper sucks.

THEN they get a bright idea .."she must think this way because she is a criminal" ...then blasting a dui for over a year.
I had to listen to the bs. 2 years.( while staying silent)

Then the fools yelling at you, get their book of business stolen from them, others were bankrupted.

One that got 7800 files taken told me I needed to go to "underwriting school" Some poor rep on here got thrust in between he and I...they eventually threw him under a bus ( which I warned him about)

it has been interesting

Ill be on vacation soon...so I will be chilling

Ill let you know when I pull back up my Federal Charter to do loans...still doing mcas

Hey... no one is judging you or going deep into anything... Your a smart woman and what's done is done. Lesson learned. You pushed on. You letting everyone know (who didn't know any of this) is letting those people who pissed you off know how much it bothered you. 7800 Leads is sh*t. I am sure they didn't get much with any pitch they can throw... look how far you got. now delete all that loca!!! You're better than that

[MCAVeteran]

Some funders/products are better suited for direct sales. They are not going to get the A paper credit they want from brokers. FC already learned that. I spoke to FC before they even launched a broker program and they didnt think the mca world of brokers could acquire the credit customers they sought out.

[HDF]

Some funders/products are better suited for direct sales. They are not going to get the A paper credit they want from brokers.

There are plenty of well-trained brokers that can place clients of any paper grade, product or need. For those who willfully don't want to exercise the discipline that takes, you are 100% correct.

[Cfairbank]

One last thing to add -- we do still believe that two or three more shakeouts are coming, and until then, we are staying up market for standard paper; however, we will still lend to higher risk merchants when we can (a) truly perfect our security interest; (b) offer our hybrid product; or (C) collateralize a core business component, even if it doesn't meet the full loan amount. You are already seeing default rates go up with many the industry (see IOU's annual report -- it shows you the impact of debt settlement companies and stacking on their defaults) and these increased defaults are happening when we remain in the middle of a benign credit environment (as a side note, our default rate has gone down as we immediately pivoted and began to strongly weight the probability of a stacked loan that, in today's market, is not only going to suck cash flow, but stacked loans are what debt settlement companies target). Here are the two highly likely shakeouts and one potential:

1. folks that don't properly evaluate the probability of a debt settlement company coercing a merchant to stop payments (or, said differently, identifying stacking risk which more and more leads to debt settlement companies jumping in) in their approval and pricing model. Folks that settle with these guys will increasingly become a target for these companies and I do think this will take several lenders down

2. when credit inevitably weakens, we do believe the standard MCA Underwriting model is not sufficient for longer term deals, and those folks that mostly used banks to underwrite and offer long terms will be in trouble.

3. the unknown -- regulation; despite current GOP control, it is inevitable that we will be regulated; the question is when, by whom, and what will it cover?

[Karen37a]

True Salespeople are King.

[WestCoastFunding]

Why'd you do that Karen?

[Karen37a]

Why'd you do that Karen?

Why did I do what? Let pikers threaten me about 3 glasses of wine and not do anything back?



wake up

[Cfairbank]

Question for @CCR (or any other broker): let's say, hypothetically, that you could get an instantaneous, fully-automated approval with a range of offers or a decline (with decline reason) from us by simply providing the initial docs (signed application and bank statements) in PDF format (the option to go through portal would not go away). Your approval will be quite firm, as the scoring model will already have analyzed the full credit profile via a soft pull (not just the FICO 9 score, but also all positive features or negative entries on the credit report that are major drivers of a lot of our declines -- but to be clear, part of the verification would be that the app received gives us full permission to do a soft pull or access other customer-level information), links to core 3rd parties via APIs for customer-relevant verification (or analysis) in real-time, and (most importantly in my view) conducts a fully automated bank statement analysis from just the submitted PDFs. Again, all done by just sending us your standard PDF documents and you won't have to wait for an offer or decline. This would incorporate a real-time feedback loop via ML to consistently and automatically improve our approval/scoring model (i.e. tighten or loosen areas of our credit model or find new gaps). This would be fully proprietary, in-house technology.

Initially, your approval ratio likely wouldn't change -- it's still about what we want to fund and uses the latest model of the Breakout Score; but there is no wasted time to get an answer unless insufficient information is submitted. So the question is this: if all you have to do is send in PDFs to get an offer or decline in real-time (folks here can call us difficult to get approvals from, but everyone knows your app is safe with us), how does it change how folks would use us?

[WhoisKingsley]

Yes. If this type of feature is available (who some have) direct to merchant when applying, it should be available to those who “resell”. Based on future receivables - financial only offer. A true advance offer which from the very beginning was supposed to be based off the receivables then UW. Why? Resources ain’t cheap. No matter how many algorithms are built into a system a human eye/brain will always be needed .

Now with that being said - analyzing PDF bank statements via API or upload is not something that is brand new or far off. I think there are a lot more people in this space that are not aren't acquainted with the types of "software" concepts that are/were being built around this space. Still one of the biggest issues that arise with any type of innovation is having the minds support it while it's in motion.

[HDF]

^ I think that if everyone had a standard application and the business owner fills it out correctly/legibly the first time every time- it would be great! That's not possible of course.

I'm also intrigued by how the heck your systems will be able to analyze bank statements from all the different banks - especially the smaller ones. This is some undertaking, I think a lot of brokers would love to see the efficiency.

[CraaaCraaa Radio]

^ I think that if everyone had a standard application and the business owner fills it out correctly/legibly the first time every time- it would be great! That's not possible of course.

I'm also intrigued by how the heck your systems will be able to analyze bank statements from all the different banks - especially the smaller ones. This is some undertaking, I think a lot of brokers would love to see the efficiency.

Agreed

[Cfairbank]

Hdf: not at all necessary. As long as the machine has already analyzed an app from a broker or bank statements from the a borrowers bank, it doesn’t matter whether it’s the same app or not as long as it has the experience with that app and continues to improve through an automated feedback look — and through advanced ML, we are able to get to a much higher higher degree of accuracy than humans can and it continues to improve its accuracy by teaching itself, thereby improving every day with each incremental app. So let’s say we start with 50k apps and back statements from thousands (no idea the number there) banks; that’s already enough info to address most banks in the country (and with extreme accuracy for all the major or semi major banks given amt of data) accurately and Apps even more accurately (assuming data on app is right). As long as you feed your machines enough information and allow them to “solve a problem” instead of, as folks do it today, “solve for a specific solution” (sounds like a minor nuance, but it’s a major difference in machine learning), where the “best” in the mkt today are from a technology standpoint will still be outdated.

Call me Monday, bud.

[MCNetwork]

I think we're years away from getting instantaneous approvals from PDF files. Half of the time the PDFs are barely legible because they are just blurry scans of statements. In addition, many applications are handwritten and look like chicken scratch. I haven't seen any type of OCR software that can make heads or tails out of these documents unless the PDFs are perfectly formatted and 100% legible which isn't the norm.

[Karen37a]

I think we're years away from getting instantaneous approvals from PDF files. Half of the time the PDFs are barely legible because they are based off of photocopied statements or handwritten chicken scratch on the application itself. I haven't seen any type of OCR software that can make heads or tails out of these statements unless the PDFs are perfectly formatted and 100% legible which isn't common. This is all wishful thinking right now.

I agree. And even if it could be done thru ocr software.( which it cant for the reasons above ) Standard application forms create more opportunities for backdooring Also those initial algorithms are just a pre pre pre determining factor to see if a file moves on to stage 2...more underwriting. Or stage 3..more underwriting.


The speed of approvals of deals (that someone wants) is not the main concern in this industry..you send in docs, an application and within a few hours or 24 hours you get approved; funded within another 24 hours. Nor documents.

Or you get denied.

The Key is to getting a file that the Funder likes( or wants to approve)...not how quick they scan their documents once you give it to them

Getting the clients to SEND the documents thru numerous phone calls ...convincing the client to do business with you is the key ( and fitting a certain underwriting guideline with the right or best funder) You cant force the merchant to speed up his end ( sending docs and stips) no matter how hard we try.


You can never take the human element out of sales ...or underwriting.

Even the best underwriting caused massive defaults for A paper

[WhoisKingsley]

I agree. And even if it could be done thru ocr software.( which it cant for the reasons above ) Standard application forms create more opportunities for backdooring Also those initial algorithms are just a pre pre pre determining factor to see if a file moves on to stage 2...more underwriting. Or stage 3..more underwriting.


The speed of approvals of deals (that someone wants) is not the main concern in this industry..you send in docs, an application and within a few hours or 24 hours you get approved; funded within another 24 hours. Nor documents.

Or you get denied.

The Key is to getting a file that the Funder likes( or wants to approve)...not how quick they scan their documents once you give it to them

Getting the clients to SEND the documents thru numerous phone calls ...convincing the client to do business with you is the key ( and fitting a certain underwriting guideline with the right or best funder) You cant force the merchant to speed up his end ( sending docs and stips) no matter how hard we try.


You can never take the human element out of sales ...or underwriting.

Even the best underwriting caused massive defaults for A paper

Standard application forms create more opportunities for backdooring ?!? I call BS. CAN Capital had a standard app. I didn’t hear the work “backdooring” until people started creating their own applications and so on. Standard applications for anything (repeat ANY THING) that you go into contract to has to be a certain way. That’s why it’s a reseller contract and the broker doesn’t own the merchant account (for some funders- in a good way not the bad ones- hear me out here) If a Broker had to keep organized and liable for anymore they are already responsible for … no offense but how many of ya’ll live with your mom? Have roommates? Airbnb? and ya’ll are scared of regulation?

The speed of approvals of deals (that someone wants) is not the main concern in this industry.
So why tf does everyone have “fast approvals” on their website? You mean to tell me you have over 20 ISOs under you and they don’t haunt you sun up to sun down (I am guessing - To be an ISO Manager is a full time job- submissions is another… then communicating it all…)

[Cfairbank]

I think we're years away from getting instantaneous approvals from PDF files. Half of the time the PDFs are barely legible because they are just blurry scans of statements. In addition, many applications are handwritten and look like chicken scratch. I haven't seen any type of OCR software that can make heads or tails out of these documents unless the PDFs are perfectly formatted and 100% legible which isn't the norm.

This couldn't be further from the truth. If it's legible to you, the machine will learn it. Today's OCRs aren't built properly on ML (if I'm not mistaken, they are static solutions because if you allow them to "learn", they wouldn't solve the broader problem an OCR is attempting to solve (take any pdf and put it into word or excel) , while we have a specific type of document and all we care about is the authenticity, the accuracy, and the ability to extract and analyze data specific to bank statements and applications (to start) -- and it's the constant learning that allows the computer, that initially can't identify anything "non-standard", to learn with each new app, quickly catch up to human ability, and then move ahead because of their ability to cross reference every pixel on every pdf -- that's what makes it "easy".... you wouldn't believe how quickly this was built. And, at proper capacity, if the computer can't recognize it, the human couldn't either so, you have to re-request docs anyways.