[MidnightAdvance]

Hi Everyone.

We recently pioneered a new concept in the MCA space, it's called "second chance funding". We give merchants who defaulted on other MCA companies, or on other lenders in general, a second chance to build back some payments history. After paying us off the merchant can qualify to get better terms and rates, and a second chance to get funding.

We recently funded a $100k deal on this program (the merchant was very happy that we gave him a chance, after getting declined everywhere).

In order to separate the default program from the other midnight deals, we designated a separate team, with new emails and different underwriters.

In recent weeks the deal flow has skyrocketed, after a lot of ISOs heard about this program. We are trying to keep up with the flow, and calling for all ISOs who are interested in giving this a shot to email us at: defaults@secondchancefunding.com to request an ISO package or more info.

[J.Celifarco]

Hi Everyone.

We recently pioneered a new concept in the MCA space, it's called "second chance funding". We give merchants who defaulted on other MCA companies, or on other lenders in general, a second chance to build back some payments history. After paying us off the merchant can qualify to get better terms and rates, and a second chance to get funding.

We recently funded a $100k deal on this program (the merchant was very happy that we gave him a chance, after getting declined everywhere).

In order to separate the default program from the other midnight deals, we designated a separate team, with new emails and different underwriters.

In recent weeks the deal flow has skyrocketed, after a lot of ISOs heard about this program. We are trying to keep up with the flow, and calling for all ISOs who are interested in giving this a shot to email us at: defaults@secondchancefunding.com to request an ISO package or more info.

If the other company still has an open judgment will you still consider the file? Do you payoff the company that the merchant screwed over in the first place?

[MidnightAdvance]

If the other company still has an open judgment will you still consider the file? Do you payoff the company that the merchant screwed over in the first place?

We like to see a satisfaction of judgement. If there's no SOJ we will either request payoff letters or investigate / find out what happened, why they defaulted, how much did they pay in, before they defaulted (if the merchant simply took money and blocked payments, we won't fund. If the merchant paid off 4 renewals and got screwed in the end.. that's a different story).

[Sachip24]

so for your default program you now go over 25k? or is that program something completely different from this one?

[MidnightAdvance]

so for your default program you now go over 25k? or is that program something completely different from this one?

In order to qualify for $100k you gotta do some serious volume.. But yes we do more than $25k.

[J.Celifarco]

We like to see a satisfaction of judgement. If there's no SOJ we will either request payoff letters or investigate / find out what happened, why they defaulted, how much did they pay in, before they defaulted (if the merchant simply took money and blocked payments, we won't fund. If the merchant paid off 4 renewals and got screwed in the end.. that's a different story).

didn't answer the question though if they did not fully payoff the default advance with the previous funding company will you fund the deal? Will you payoff that balance out of the advance? Do you decline and not fund? Defaulted but satisfied the debt and defaulted and screwed the funding company are 2 very different things just trying to see which ones you fund

[MidnightAdvance]

John how about you test it our with a few files.. You'll see Midnight actually funds your deals, pays commission and is your new best friend.

[J.Celifarco]

John how about you test it our with a few files.. You'll see Midnight actually funds your deals, pays commission and is your new best friend.

No thank you, the fact that you are not answering makes me believe you dont payoff outstanding balances, which means you are screwing over the company that previously funded them and thats not someone I have interest in working with. Now I could be wrong but I doubt it because if you did make sure all previous obligations were paid you would have answered the question..

[StipMeBabyOneMoreTime]

No thank you, the fact that you are not answering makes me believe you dont payoff outstanding balances, which means you are screwing over the company that previously funded them and thats not someone I have interest in working with. Now I could be wrong but I doubt it because if you did make sure all previous obligations were paid you would have answered the question..

This.

You're asking John to work with you to fund merchants that likely screwed his other funders. Doing so bites the hand that feeds.

[MidnightAdvance]

I did answer the question. We stay away from people who "screwed over" the other funder, and no, we do not pay off anyone. But every situation is different depending on the story (why they defaulted).

Do you fund merchant who screwed over their - credit cards, bank loans, student loans, mortgages, tax payments (the US government), and all other bad credit factors???

[abfunders]

I never understood why most funders automatically destroy the files of a client who modified payments once for a week or two during the "down" season, but never missed a payment, and then brand it a "default" and then can't get funding. If they had taken a CC split, they would be fine. I have a client who changed from a split to ACH, and everyone things that they defaulted. Only one funder is looking at it now from the perspective of "this person only qualifies for a split," as opposed to just straight declining.

Granted, it's 8 NSFs last month, so on a CC split makes sense.

Not all "defaults" are created equal.

[J.Celifarco]

I did answer the question. We stay away from people who "screwed over" the other funder, and no, we do not pay off anyone. But every situation is different depending on the story (why they defaulted).

Do you fund merchant who screwed over their - credit cards, bank loans, student loans, mortgages, tax payments (the US government), and all other bad credit factors???

This sounds like we don't fund them if they "Screwed Over" the previous advance company, but if just just stopped paying in a nice way well then we are fine with it, and don't care if they still owe ABC Funder money. So yeah thats just not right in my opinion, so no I wouldn't work with you.

[Eagle Funding]

Will give Midnight props here, have seen them in a few defaults where they actually helped the merchant.

[MidnightAdvance]

You didn't answer the question -
Do you fund merchant who screwed over their - credit cards, bank loans, student loans, mortgages, tax payments (the US government), and everyone else besides MCA ???

We, as MCA players, like to pride ourselves that we "fund when the banks say no" but when a deal defaults "on us" it's the worst thing in the world.

Again, I do understand that defaults are bad, we wouldn't touch them on our regular program, but don't make it as if it's more un-ethical than your regular MCA.

[J.Celifarco]

You didn't answer the question -
Do you fund merchant who screwed over their - credit cards, bank loans, student loans, mortgages, tax payments (the US government), and everyone else besides MCA ???

We, as MCA players, like to pride ourselves that we "fund when the banks say no" but when a deal defaults "on us" it's the worst thing in the world.

Again, I do understand that defaults are bad, we wouldn't touch them on our regular program, but don't make it as if it's more un-ethical than your regular MCA.

We must have very different ethics then because i think this is 100% unethical

[abfunders]

I've got a merchant out in California who defaulted on her student loans and LoanMe, FICO in the 520 range, but is getting funded and paying MCAs like a champ. She's slowly going out of business, but the dailies and weeklies keep coming out.

Someone scared her.

[J.Celifarco]

my problem is that if a merchant screws over a bank I work with and then I go get that merchant funded somewhere I am essentially helping them screw over a partner of mine. That is not something that I think is OK. Also if the 1st position bank finds out my relationship with them would be screwed. I think its both short sighted from a business perspective because you are risking a more profitable relationship for the ability to fund a few defaults, As well as unethical.. thats just me though

[abfunders]

my problem is that if a merchant screws over a bank I work with and then I go get that merchant funded somewhere I am essentially helping them screw over a partner of mine. That is not something that I think is OK. Also if the 1st position bank finds out my relationship with them would be screwed. I think its both short sighted from a business perspective because you are risking a more profitable relationship for the ability to fund a few defaults, As well as unethical.. thats just me though

Bank or Funder?
John, this is where things are important to get your vocabulary correct

[J.Celifarco]

your not wrong, but I think everyone got my point. Funder is the correct word though

[ryan $]

We must have very different ethics then because i think this is 100% unethical

That makes no sense to me.

If someone screws over ATT&T and gets sent to collections does Sprint repay ATT&T when customer goes to open an account? No.

If the Merchant is a default on YOUR books, and you then move them as you explained thats prob a little different, as you stated, but if he didnt default with you and you can then send them to midnight - i dont see the problem.

[J.Celifarco]

That makes no sense to me.

If someone screws over ATT&T and gets sent to collections does Sprint repay ATT&T when customer goes to open an account? No.

different people look at things different ways. I stick by what i said.

[abfunders]

If the Merchant is a default on YOUR books, and you then move them as you explained thats prob a little different, as you stated, but if he didnt default with you and you can then send them to midnight - i dont see the problem.

As long as you don't hide the fact from the new funder that there was a default, or the funder can do their own due diligence somehow. Don't send a file knowing that there's real criminal history to a funder hoping it'll get funded. At the beginning when every dollar counts, maybe. However, relationships are important. Packaging a loan is part of the broker's job.

I recently had a client who defaulted on 5 different funders in an old LLC (I found out after running biz credit on the old entity), he created a new LLC, and got funding from 5 other funders. One of the old ones he defaulted on was coming out of a separate account he set up just for that funder to pull from.

After lowering payments on the 5 stacks he had, I had a $450,000 term loan (secured by collateral) ready for him. After telling me that he was willing to do a controlled default to be ready re-fi (read: tortuous interference), and I told him no, running biz credit and seeing 5 judgements is what made me run the other way. (Yes, I tattled on him to the lender who he was funding on the new LLC and defaulted on the old one.)

[JMB]

That makes no sense to me.

If someone screws over ATT&T and gets sent to collections does Sprint repay ATT&T when customer goes to open an account? No.

If the Merchant is a default on YOUR books, and you then move them as you explained thats prob a little different, as you stated, but if he didnt default with you and you can then send them to midnight - i dont see the problem.

I agree with this!

[MidnightAdvance]

John, some of these "funders" have long forgotten about these defaults. Most of our stuff are at least a year old. These defaults were already juiced out for tax write offs.. let alone paid off most if not all of the debt.

Do we really wanna fund someone who outright stole $50k from another company? Absolutely not. But if the guy had 4 renewals and defaulted on the last $5k? Yes, send it.

[WestCoastFunding]

Coming next week: F.R.E.S.H. Start program for merchants that defaulted on Midnight’s default program.