[USATopISO]

It seems to me like there would be a big market for consolidations, especially if they are pitched correctly. Ill take any and all expert advice on these. Thx alot...

[USATopISO]

pros and cons

[WestCoastFunding]

It seems to me like there would be a big market for consolidations, especially if they are pitched correctly. Ill take any and all expert advice on these. Thx alot...

Stacking advances poses major risks to the original funders. Once these guys get 3 or 4 advances the risk of default skyrockets.

Someone who has a history of stacking advances tend to have few qualms with stacking more advances after a consolidation. So consolidations aren’t looked upon as something funders are itching to do. If it were my money, I’d consolidate about 2% of stacked merchants, because the overwhelming majority will be ready to stack the consolidation about 2 minutes after they are consolidated.

[USATopISO]

ok thx

[Christian]

pros and cons

Pro: I’m a broker trying to make a rip
Con: I’m a funder who just bought out every other funder for a client who absolutely loves to stack

[Lmonus]

Stacking advances poses major risks to the original funders. Once these guys get 3 or 4 advances the risk of default skyrockets.

Someone who has a history of stacking advances tend to have few qualms with stacking more advances after a consolidation. So consolidations aren’t looked upon as something funders are itching to do. If it were my money, I’d consolidate about 2% of stacked merchants, because the overwhelming majority will be ready to stack the consolidation about 2 minutes after they are consolidated.

well said.

[fundingsmbs]

^ habitual stackers will stack again after you pay the competitors off. there is a list of companies that first position funders (some not all) will no longer payoff as part of their UW. They tried and saw those companies come right back in and fund them post payoffs. In theory, sounds great to consolidate, in reality, it just doesn't work too well.

[abfunders]

Consolidations can be done with the right lender who's willing to take control of the file, and do the right safeguards against stacking afterwards, like suing them. Banks can just cancel the loan. Super G sues if you stack them. I'm sure some factors will do it, as well.

The key is getting GOOD QUALITY money on top, not just stacking endless debt on endless debt. Yes, I've seen reverses that have been stacked, as has everyone.

However, after someone has been in the MCA world for a while, getting them a really nice LOC will save them. A term loan might be needed to re-fi the existing debt, but there's got to be some form of revolving working capital to prevent future stacks. Also, a LOC at the beginning rather than "selling" an MCA might keep them as clients for longer, and much less work, much less "hope" for renewals. Any factor, Bluevine, Fundbox, Breakout.....

[Karen37a]

There is a way to do consolidations but the numbers must make sense.

Part of the reason I have lower defaults is I was consolidating and coaching the merchants. Most brokers some funders will just stack again for the commission

I only helped the ones I believed wouldn't then go back and stack...I guess I have been lucky, they didn't do it. And when certain brokers went back and tried it on me ...we decided to part ways

The merchant has to really be onboard for it( and you have to see thru the ones who are bssing you...and the brokers who are bssing you)...sales works 2 ways. One broker telling them to do A...one saying do B...stongest salesperson usually wins.

Your funder/lender/money man has to help with this mission ...which is why I tried to keep select relationships from deteriorating with defaults and not just send out files loosey goosey so I get stacked backdoored and pissed off

[RichardGerard]

Consolidations can be done with the right lender who's willing to take control of the file, and do the right safeguards against stacking afterwards, like suing them. Banks can just cancel the loan. Super G does that. I'm sure some factors will do it, as well.

The key is getting GOOD QUALITY money on top, not just stacking endless debt on endless debt. Yes, I've seen reverses that have been stacked, as has everyone.

However, after someone has been in the MCA world for a while, getting them a really nice LOC will save them. A term loan might be needed to re-fi the existing debt, but there's got to be some form of revolving working capital to prevent future stacks. Also, a LOC at the beginning rather than "selling" an MCA might keep them as clients for longer, and much less work, much less "hope" for renewals.

Super G is expensive money (I like those guys- but they will admit the same). If you add a factor rate on top of a factor rate in most instances it is a recipe for disaster. Each consolidation- like each company-is different. Reverses in theory are helpful, but only truly make sense when there is a global solution, and the reverse is a bridge to that solution.

What if the client does not have the marketable assets to get a LOC?

What if they don't have AR?

What if they really don't have any collateral?

There is no one size fits all solution and to categorize things by saying 'factor, LOC, or term loans without dissecting the balance sheet is essentially spitting in the wind.

[Karen37a]

All the brokers who cursed me out were not on board with this...


Sign up with an experienced Iso and they will be able thru their contacts to maybe get it done

Especially if they are syndicating their own money into the mix

[WestCoastFunding]

Newer brokers tend to think, “the merchant is showing they can pay $10,000 a week on 4 advances. Since they showed they can pay that amount, if they’re consolidated they will pay half that amoint each week, so there’s no risk to the funder.” They just don’t realize these merchant are like tweekers from the panhandle looking for another hit (or some copper wire to steal).

[Karen37a]

Newer brokers tend to think, “the merchant is showing they can pay $10,000 a week on 4 advances. Since they showed they can pay that amount, if they’re consolidated they will pay half that amoint each week, so there’s no risk to the funder.” They just don’t realize these merchant are like tweekers from the panhandle looking for another hit (or some copper wire to steal).

lol...

it's the balances, revenue and cash flow ( plus the dreaded algorithms) I try to tell people to put yourself in the Funders shoes...would you "lend"/give them money? They say no...but they still want it funded and for someone else to take the risk.

They do not care this is a pit stop for some...not a permanent career choice. you can tell the ones who hate it...they hate phone sales or any kind of marketing. When you point it out to them they will tell you that you are a telemarketer and have no education.

West Coast with the copper wiring...that was a big thing during the housing meltdowns but just to let you know they really don't do that in Florida ( not that I see), they are in a tent on the beach( too lazy) and copper and scrap metal isn't worth what it use to be ..Chinese stopped buying it...price tanked like a commodity

[Karen37a]

And they are really not in tents on the beach....they are being pushed out of here...I can't imagine where they would go...maybe towards the west.

Americans migrating to south america soon ...i dont think they will go there ...they dont like to pick frruit

[Guy With Questions]

We’ve been having a lot of success with the reverse consolidation/structured funding options. There are quite a few companies offering them now too like ML Factors, Par/Fast Advance and Arcarius. Look into them if you haven’t already best way to get it done presently and a super easy sell generally.