Results 26 to 50 of 58
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08-07-2014, 10:05 AM #26
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08-07-2014, 10:13 AM #27
- Join Date
- Sep 2012
- Location
- Gainesville Florida
- Posts
- 168
I am probably going to make a lot of people mad with this statement... but Stacking is the lazy man's way of gaining market share... Hence the reason of 1% potential.. Very few new players(funders) are presenting anything to the market that requires a competitive nature which would drive new innovation and quality products. The last thing to come about was presenting fixed ACH products and still debatable the Algorithmic model.... All the growth is coming from Lead Gen companies not the actually funders.
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08-07-2014, 10:15 AM #28
- Join Date
- May 2014
- Posts
- 317
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08-07-2014, 10:19 AM #29
If a companies business model and marketing is built around second and third position deals that is just a recipe for disaster. If you cant build your own book of deals and grow your refi business I dont see how you can last. If you business model is stacking then you are working on deals with the lowest possible commissions and you need to do twice as many deals to make money. Bringing new clients to this form of lending and then having client control and being able to stop them from going to other companies for second and third positions will build you a book of business that is way more profitable then trying to squeeze a 5k 2 month 3rd position deal for clients that will be out of business in a month
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08-07-2014, 10:20 AM #30
- Join Date
- Jun 2014
- Location
- Houston Tx
- Posts
- 97
This industry does need some innovation from some of the major players but nobody is willing to fix a car that is already working in their favor. Most companies are already holding at least 12 to 25% in slow pays or bad debt. Surely the collections aspect of this industry is taking off...I am ready for some new products that will give an edge. The horror stories are too drastic on the merchant side for this industry to take much more before the Consumer Protection Agency or some other regulator steps in to blow everyone's mind.
Is there any way to move forward without brokering the stacked deals?
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08-07-2014, 10:29 AM #31
I think brokers are looking to funders to protect their new merchants better too (ie UCC filings). Nothing is worse for a broker than to spend the money and educate a merchant that hasn't used this product before....then the funder files a UCC and every other broker starts calling your merchant daily. Hopefully funders can come up with something to secure their interest in the business and not have that information go public so marketing companies attack it.
Last edited by Scott Williams; 08-07-2014 at 11:58 AM.
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08-07-2014, 11:12 AM #32
Going back to the tone of the original email received from your merchant, the way it was worded was just maddening.
"I really blame the companies for giving them to me when they should have seen I could not keep up with this (almost $500) daily payout."
She really blames the companies?? Was the funding done without specifically worded agreements that laid out exactly what it was that she was getting? Definitely not. Darwinism is alive in business just as it is in humanity, and if a company wants to start making stupid decisions and stack on top of funding they already have then it is on them if they don't survive. A smart business owner will see the merit in not taking more than one advance at a time. In this particular case, she could have easily extrapolated what each of these advances would cost her business on a daily, weekly, and monthly basis. Ultimately, a business owner has to take responsibility for his or her own actions.
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08-07-2014, 11:41 AM #33
yes blame falls on the merchant for making bad decisions, but dont the banks also get some blame for giving someone a loan that the bank knows will put the merchant in breach of their original contract???
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08-07-2014, 11:50 AM #34
I am sure the industry has not reached it's fullest potential as far as generating new deals for first positions, when I said most of the deal floating around already have positions, that's just what I see as an underwriter. You sales guys know how hard it is to bring in a new account, selling this product to someone that is not desperate or educated is practically impossible, so how do the reps keep their commissions up? Fund a deal, wait a month, add another position, wait two months, add another position.
I am not hating on reps, I will never hate on anyone's method of making money, by all means - do you, but I am not going to agree that it is completely ethical.Anthony Diamond
Underwriter
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08-07-2014, 11:56 AM #35
- Join Date
- Jan 2013
- Location
- Berlin, CT
- Posts
- 191
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08-07-2014, 12:02 PM #36
- Join Date
- Jul 2013
- Posts
- 352
Your reasoning throughout this thread has been inconsistent.
You'd have no qualms doing a 2,3,4,5th etc position on a deal but when you get caught holding the bag its everyone else that was acting irrationally.
How would you know if you've never tried it.
If you're in this for the long haul why would you do that you client base?
Bingo. New businesses are started every day.
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08-07-2014, 12:04 PM #37
So what methods are companies using now to generate clean leads beside pulling UCCs, SEO, SBA leads, etc? I'm curious, I would like to know how that side of the business operates. With all the new ISO shops popping up every day and each one of them going through the same lists - how do certain companies differentiate their methods?
Anthony Diamond
Underwriter
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08-07-2014, 12:07 PM #38
channin, he who has not paid attention to anything i've said thus far but is just looking for a reason to argue with me and call me out - if it makes sense and payments do not exceed 25%-33% of gross revenue then great, stack away. if payments exceed 50% of gross revenue, there is absolutely no rationale to stack. did that summarize my position in a way you can comprehend?
edit - and I wouldn't put myself nor my company in a position of holding the bag, as I've also said - I wasn't the 3rd or 4th position in that deal that started this thread.Last edited by ADiamond; 08-07-2014 at 12:10 PM.
Anthony Diamond
Underwriter
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08-07-2014, 12:10 PM #39
If thats what your sales guys are doing to make money then you need new sales guys they are cutting out there own legs to make a couple of dollars and screwing over the bank in the process... New business is harder to close but it is not impossible.. Like a lot of people in this thread have said there is plenty of new business out there you just have to go out and find it and then close it
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08-07-2014, 12:22 PM #40
- Join Date
- Jan 2013
- Location
- Berlin, CT
- Posts
- 191
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08-07-2014, 12:38 PM #41
- Join Date
- Jul 2013
- Posts
- 352
I'm done... I get it... You're very talented at underwriting a second position deal. Last I checked there is a 2 before 3 & 4. If you're writing the second you know there is a risk for 3 & 4 and that's why the rates are higher. Sometimes you win... sometimes you lose. No use blaming other's greed.
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08-07-2014, 12:53 PM #42
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08-07-2014, 01:12 PM #43
one thing is for sure, out of all the topics that are talked about on this site, nothing gets people going more than this topic
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08-07-2014, 01:12 PM #44
- Join Date
- May 2013
- Posts
- 10
ADiamond - don't you realize that you are the one who gave the merchant HIS FIRST STACK, hence how we was able to get to the point of a third, and fourth position. What makes you think that you can decide how much a merchant can or cannot afford. How long have you been in the industry? What kind of data are you basing these percentages of revenue of off. You are not realizing that you are just basing this off of what "you think good underwriting is" and what "you think a merchant can handle". I got news for you, you have no idea what you are talking about. I agree with Channin 100%. You are just as greedy as the 3rd position and 4th position lender. Fact of the matter is, you should have educated the merchant that it is dangerous to take a 3rd and 4th position, even a 2nd position. Your underwriting on the deal was not sufficient.
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08-07-2014, 02:48 PM #45
- Join Date
- Jul 2014
- Location
- New York, NY
- Posts
- 11
Touche! Another case of the pot calling the kettle black!
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08-07-2014, 02:55 PM #46
- Join Date
- Jun 2013
- Posts
- 351
So you mean to tell me that you think there are businesses out there that can operate their business, paying their rent, payroll, COGS, etc. all while 25-33 cents of every dollar that comes in goes to repaying debt? I dont know you or your company, but your comments in this thread are showing your inexperience and are not reflecting well. This is the problem with the stacking world we live in.
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08-07-2014, 03:00 PM #47
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08-07-2014, 03:08 PM #48
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08-07-2014, 03:10 PM #49
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08-07-2014, 03:11 PM #50
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