Nathan, I've spoken to a couple of the new alternative lenders. Their underwriting is much closer to a bank than MCA (and it should be with longer duration portfolios). Not as tight of course but still eliminates the vast majority of who we deal with. I don't even think of them as competition to be honest.

One issue I had when being solicited was a really weak comp plan and the fact that they won't allow us to fund any short term deals because it was strictly prohibited in their contract. It seemed naive to me. Not that I was going to load them up with new deals and then fund the clients anyway. I had no interest in their services. It seemed naive because the BD reps seemed completely unaware of the stacking bonanza going on. They felt that their paper was secure from layering because of contract language and a "better" class of borrowers. Does anybody really believe that?

I think there is definitely a place for 2-5 year term stuff in the alternative lending space. No doubt about it. But it's a ripe product for performance problems from rampant layering and at much higher risk for micro and macro economic conditions. With mid teen WACs and 3+ year WAMs things can go awry pretty quick. We'll see how it all plays out over the next couple of years.