[Kevin Henry-Seacoast]

True, Kabbage also figured this out early on. They invested millions$ in automation from day 1 and today all of that investment paid off as they have a much lower cost of acquisition for customer's and lower overhead to service customers without having to pay a broker 12-15 points to acquire a new customer. But, I still contend, the broker space will be with the B-D funder's and layering as a future forward model of this MCA business as the behemoths continue to automate and not rely on third party business.

True.....you are leaving out a very important point. Most of the mature firms in the advance space much like all other alternative lending have access to cheaper cost of funds. When the advance companies partner with the large institutions with gobs of capital to deploy their costs go down significantly and they have captive customers. They will always have an "A" team referral network to help fill in the gaps and help build a clean sticky book. Deploying capital to sticky customers and getting it back is the key to building a book and being very profitable. Building relationships with large institutions that want to deploy capital helps because at the end of the day....he who has the most executable clean deal-flow wins. Once the larger more mature advance companies figure out a model and build a book with good clean paper and cheap money.....you bet your lucky stars they are going to use the same model at higher rates for somewhat riskier paper. If they have figured out how make money with good paper, they will certainly use the same model to go after riskier paper within reason. Will their be a market away from the larger players, sure....that's the way capital markets works.
Capital Markets is a fun business so long as you constantly evolve and never forget about the customer.