[RickyR3712]

So what's that word we've been discussing again? Oh, that's right, it's called "regulation". Any more proof this industry is a Wild Wild West?


- You have merchants out here being the victim of multiple stacks that equate to 40% or more of their monthly gross going to payback high costing merchant cash advances, which leads many of them to file bankruptcy

- You have brokers running around adding PSF fees of 10 points or more, on top of already a high costing program for the merchant in general

- You have co-brokers getting ripped out of commissions

- You have brokers in general getting ripped out of commissions

- You have brokers being back-doored

- You have funders being ripped off by unscrupulous brokers

- Scroll through the Rip Off Reports and you will see an assortment of MCA related companies

- Now add to the list, that merchants are on the hook for "advances" that they never actually signed up for

If we don't act, we are all going to be featured on an episode of American Greed in a moment.

Sounds like you can not close deals so you want the government to help level the playing field this way you can come back and try to make a living

[Karen37a]

Sounds like you can not close deals so you want the government to help level the playing field this way you can come back and try to make a living

https://www.youtube.com/watch?v=eclbaC3q94k

it did not have the effect Longshanks planned... and I Elizabeth rode out to pay homage to the big banks and regulators

You have bled with Wallace...now Bleed with me

[jotucker1983]

Sounds like you can not close deals so you want the government to help level the playing field this way you can come back and try to make a living

I respect your opinion, however, I don't think your opinion is based on sound reasoning?

- Please provide explanation on how making sure people like Ricky Dennis is blocked from entering the industry, making sure merchants aren't being stacked to 40% of their gross in payments, making sure brokers get paid, and making sure merchants have fair pricing standards......somehow is "bad" for the space?

- To your point about "leveling a playing field", there's no way to "level" a playing field that is structured based on leveraged strategic resources. The 20% of companies/brokers with the strategic resources will still be the ones making the vast majority of revenues, while the 80% without said resources will still be the ones barely scraping by.

- Regulation doesn't "level a playing field", regulation helps rid the industry of the bad actions listed above and in turn, helps to "protect" the duration of the space. If the space continues to operate like a Wild Wild West, the long term duration of it will be significantly impacted.

[Karen37a]

I respect your opinion, however, I don't think your opinion is based on sound reasoning?

- Please provide explanation on how making sure people like Ricky Dennis is blocked from entering the industry, making sure merchants aren't being stacked to 40% of their gross in payments, making sure brokers get paid, and making sure merchants have fair pricing standards......somehow is "bad" for the space?

- To your point about "leveling a playing field", there's no way to "level" a playing field that is structured based on leveraged strategic resources. The 20% of companies/brokers with the strategic resources will still be the ones making the vast majority of revenues, while the 80% without said resources will still be the ones barely scraping by.

- Regulation doesn't "level a playing field", regulation helps rid the industry of the bad actions listed above and in turn, helps to "protect" the duration of the space. If the space continues to operate like a Wild Wild West, the long term duration of it will be significantly impacted.

I had fights with you for THREE years...go relook at what i posted.

Then look at you slandering me because you cant make sales....making up lies. Enough already

[RickyR3712]

I respect your opinion, however, I don't think your opinion is based on sound reasoning?

- Please provide explanation on how making sure people like Ricky Dennis is blocked from entering the industry, making sure merchants aren't being stacked to 40% of their gross in payments, making sure brokers get paid, and making sure merchants have fair pricing standards......somehow is "bad" for the space?
.

I do not know ricky dennis and that is why that part was not quoted. I will go through each one and we can discuss it out.
making sure merchants aren't being stacked to 40% of their gross in payments- How do you decide those guidelines, Facts if those numbers put everyone out of business than pearl and yellowstone will not be the power houses they are now .Banks will give a guy 100 times his "gross monthly". Merchants know what they can handle and what they can not . I have a nail salon that has been paying over 40% for years now.(his real gross with cash is way higher)
making sure brokers get paid- To every rule there is loopholes that the same funders who do not pay will figure out a legal way not to pay.
merchant having a fair pricing standard- All this will cause is getting rid of alternative lending where all the thousands of merchants i have helped would just close up . Do you think yellowstone can keep there doors open if they have to do 15% . do you think on deck or rapid will be in business if they needed to compete with the banks at 3%
John you are to straight forward thinking thinking if there will be rules they will weed out the ****. Those guys will put there wife , mother,friend,neighbor.
Someone came to my office door offering me $500 a month to use my address for amazon and that i might get a return here or there. To me this means he already got thrown off amazon from his address ,ten different family members another ten friends and now is going door to door which he will 100% get someone and continue to screw people over.

[Karen37a]

I do not know ricky dennis and that is why that part was not quoted. I will go through each one and we can discuss it out.
making sure merchants aren't being stacked to 40% of their gross in payments- How do you decide those guidelines, Facts if those numbers put everyone out of business than pearl and yellowstone will not be the power houses they are now .Banks will give a guy 100 times his "gross monthly". Merchants know what they can handle and what they can not . I have a nail salon that has been paying over 40% for years now.(his real gross with cash is way higher)
making sure brokers get paid- To every rule there is loopholes that the same funders who do not pay will figure out a legal way not to pay.
merchant having a fair pricing standard- All this will cause is getting rid of alternative lending where all the thousands of merchants i have helped would just close up . Do you think yellowstone can keep there doors open if they have to do 15% . do you think on deck or rapid will be in business if they needed to compete with the banks at 3%
John you are to straight forward thinking thinking if there will be rules they will weed out the ****. Those guys will put there wife , mother,friend,neighbor.
Someone came to my office door offering me $500 a month to use my address for amazon and that i might get a return here or there. To me this means he already got thrown off amazon from his address ,ten different family members another ten friends and now is going door to door which he will 100% get someone and continue to screw people over.

Here just in case you do not see the other thread

China Locks Down Financial District As P2P Lending Implodes

https://www.pymnts.com/news/internat...ending-losses/

Collapse of Chinese peer-to-peer lenders sparks investor flight ( all the negativity cause people to flee, ive said it 100 times, like shorting a stock or placing a rumor...which is illegal)

[jotucker1983]

I do not know ricky dennis and that is why that part was not quoted.

See this thread here.

making sure merchants aren't being stacked to 40% of their gross in payments------How do you decide those guidelines, Facts if those numbers put everyone out of business than pearl and yellowstone will not be the power houses they are now .Banks will give a guy 100 times his "gross monthly". Merchants know what they can handle and what they can not . I have a nail salon that has been paying over 40% for years now.(his real gross with cash is way higher)

There's far too many cases of merchants being put out of business or running into cash flow issues, when the 4 - 6 advance stacks that they have equate to 40% or more of their monthly gross sales going to payback cash advances.

A case-by-base 2nd position stack in and of itself can be questionable, but it can usually work depending upon all of the circumstances at play such as cashflow, sales, the fact that the 1st position funder didn't provide as high of an approval as they could have, etc.

But there's absolutely no reason why a merchant should have 4 - 7 advances stacked on top of one another. The only reason this is happening is because as I mentioned here, the industry is based on leveraged resources and the brokers fighting at the bottom are fighting for scraps to pay their monthly expenses. As a result, they just stack and stack merchants who otherwise have no CLUE what they are doing. The merchants are very unsophisticated.

making sure brokers get paid- To every rule there is loopholes that the same funders who do not pay will figure out a legal way not to pay.

And those funders will be banned going forward as a result. Right now as a broker, when you fund a deal, all you can do is pray to the powers that be that you get paid. You might get paid, you might not get paid. There's no centralized police nor regulation that is there to make sure you get paid. Thankfully, the vast majority of the time, we get paid....but it's the fact of the matter that if we don't get paid, there's really no good recourse for the smaller shop.

merchant having a fair pricing standard- All this will cause is getting rid of alternative lending where all the thousands of merchants i have helped would just close up . Do you think yellowstone can keep there doors open if they have to do 15% . do you think on deck or rapid will be in business if they needed to compete with the banks at 3%

We would have to get together to determine what "fair" pricing looks like for A, B, C, D, and E Paper. Either we can do it together as an industry, or you can have the U.S. Government do it, which one do you prefer?

On the flip side, I'm not sure how anyone can justify a merchant paying a 1.50 over a 5 month term with the broker getting 10 points on the deal, then adding another 10 points in a PSF fee. That's not "special sales ability", that's taking advantage of an unsophisticated merchant that's desperate for funding.

John you are to straight forward thinking thinking if there will be rules they will weed out the ****. Those guys will put there wife , mother,friend,neighbor. Someone came to my office door offering me $500 a month to use my address for amazon and that i might get a return here or there. To me this means he already got thrown off amazon from his address ,ten different family members another ten friends and now is going door to door which he will 100% get someone and continue to screw people over.

So I have no intentions of being a jerk when I state this lol, but I feel that those who are fighting so hard against these "basic/common sense" forms of policing, are the ones that these "basic/common sense" forms of policing would begin to police.

You made the statement of: "Well John, you only want regulation because that would make it easier for you to generate business," and the statement alone is revealing because it's almost like you are saying that by doing RIGHT by the client, a broker can't generate business? It's almost like you are saying that business can only be generated when:

- A broker has a recent criminal history

- A broker adds 10 points in a PSF on the side, most of the time without the merchant really understanding what they are paying

- A broker stacks the living hell out of a merchant and nearly drives him out of business

- A broker rips off a co-broker that sent me a deal by not paying him his share of commission

- A broker rips off a funder by getting them to fund a merchant he already knew was shady

Surely this industry can still exist and make money without these practices taking place, right?

[WestCoastFunding]

See this thread here.

“A case-by-base 2nd position stack in and of itself can be questionable, but it can usually work depending upon all of the circumstances at play such as cashflow, sales, the fact that the 1st position funder didn't provide as high of an approval as they could have, etc.

But there's absolutely no reason why a merchant should have 4 - 7 advances stacked on top of one another.

Somewhere in the financing food chain is a senior debt lender (a bank) that feels that every single merchant advance (even 1st position A paper) is questionable and will no doubt hurt cash flow. To them, there is absolutely no good reason the business should resort to a cash advance, as it puts its own lending facility at risk.

So why the arbitrary line at 1-2 advances? And why at a percentage of revenue (as each company’s margins are different)?

[Karen37a]

Somewhere in the financing food chain is a senior debt lender (a bank) that feels that every single merchant advance (even 1st position A paper) is questionable and will no doubt hurt cash flow. To them, there is absolutely no good reason the business should resort to a cash advance, as it puts its own lending facility at risk.

So why the arbitrary line at 1-2 advances? And why at a percentage of revenue (as each company’s margins are different)?

And credit cards etc ( and people get 1st 2nd position home loans...commercial properties...seconds and credit lines)

__

And the reality is regulators would pay more money to get laws passed that we are worth...also the regulatory costs to oversee us. I can't see them footing the bill we are too small

And if you regulate us you are regulating Factoring as well? And Equipment loans?


This is like regulating plastic straws

I am tired of the desperate attempt

[jotucker1983]

Somewhere in the financing food chain is a senior debt lender (a bank) that feels that every single merchant advance (even 1st position A paper) is questionable and will no doubt hurt cash flow. To them, there is absolutely no good reason the business should resort to a cash advance, as it puts its own lending facility at risk.

So why the arbitrary line at 1-2 advances? And why at a percentage of revenue (as each company’s margins are different)?

I would argue that the bank is correct in feeling how they feel. This industry used to be based on purchasing future credit card receivables without a fixed payment associated with the payback period. We morphed into a fixed payment arrangement, which is fine, but that fixed payment arrangement should be structured in a way that allows a merchant enough "breathing room" to not potentially negatively effect him in paying other due expenses of his business.

Let's break this down:

- Merchant is doing $1 million a year in gross sales ($83,000 a month in sales) with a risk profile that puts them at A or B Paper

- Merchant is approved for $75,000 on a 15 month term with a cost factor of 1.30. Fixed payment comes out to 315 business day payments of $310 over the 15 months.

- This represents $6,510 per month in payments coming out that's going towards paying back the program, or about 8% of the $83,000 monthly gross sales.

- To the bank's point, this merchant can still default with this, but a majority chunk of merchants in this situation should have enough breathing room to where the program can be managed and paid back on time (in reasonable fashion).

- Now, when you stack the following advances below, things change:

* 2nd Position: $25,000 at 1.35 over 5 months, which is 105 business day payments of $321 ($6,741 per month in payments)

* 3rd Position: $20,000 at 1.45 over 5 months, which is 105 business day payments of $276 ($5,796 per month in payments)

* 4th Position: $15,000 at 1.45 over 4 months, which is 84 business day payments of $259 ($5,439 per month in payments)

The additional stacks have now added $17,976 in monthly payments, which combined with the 1st position of $6,510 this merchant is now paying about $24,500 per month in advance payments, which represents 30% of his monthly gross sales.

So 30% of his monthly gross sales are going to pay advances. That's not a lot of breathing room and this merchant is dangerously close to getting into bankruptcy territory.

This merchant clearly was unsophisticated both personally and business wise, but instead of our industry stopping this merchant in his tracks (telling him NO, no more funding, you can't afford it), we instead continued to feed him more "drugs" at his long term disposal and at our short term benefit.

[WestCoastFunding]

I would argue that the bank is correct in feeling how they feel. This industry used to be based on purchasing future credit card receivables without a fixed payment associated with the payback period. We morphed into a fixed payment arrangement, which is fine, but that fixed payment arrangement should be structured in a way that allows a merchant enough "breathing room" to not potentially negatively effect him in paying other due expenses of his business.

Let's break this down:

- Merchant is doing $1 million a year in gross sales ($83,000 a month in sales) with a risk profile that puts them at A or B Paper

- Merchant is approved for $75,000 on a 15 month term with a cost factor of 1.30. Fixed payment comes out to 315 business day payments of $310 over the 15 months.

- This represents $6,510 per month in payments coming out that's going towards paying back the program, or about 8% of the $83,000 monthly gross sales.

- To the bank's point, this merchant can still default with this, but a majority chunk of merchants in this situation should have enough breathing room to where the program can be managed and paid back on time (in reasonable fashion).

- Now, when you stack the following advances below, things change:

* 2nd Position: $25,000 at 1.35 over 5 months, which is 105 business day payments of $321 ($6,741 per month in payments)

* 3rd Position: $20,000 at 1.45 over 5 months, which is 105 business day payments of $276 ($5,796 per month in payments)

* 4th Position: $15,000 at 1.45 over 4 months, which is 84 business day payments of $259 ($5,439 per month in payments)

The additional stacks have now added $17,976 in monthly payments, which combined with the 1st position of $6,510 this merchant is now paying about $24,500 per month in advance payments, which represents 30% of his monthly gross sales.

So 30% of his monthly gross sales are going to pay advances. That's not a lot of breathing room and this merchant is dangerously close to getting into bankruptcy territory.

This merchant clearly was unsophisticated both personally and business wise, but instead of our industry stopping this merchant in his tracks (telling him NO, no more funding, you can't afford it), we instead continued to feed him more "drugs" at his long term disposal and at our short term benefit.

Literally none of this matters if we don’t know their margins. Either there’s enough there to debt service or there isn’t. Not to mention the margins for a consulting company is going to be much different than a restaurant?

So again I’m asking, what percentage of gross sales are you saying is too much? Provide a number. 10%? 20%? 40%?

Then, how do you write that into law?