[Karen37a]

https://debanked.com/2018/08/califor...e-unfavorable/

California’s bill to mandate certain disclosures on business loan and merchant cash advance contracts is looking a little bit worse. TThe Annualized Cost of Capital method (Explained here) that some folks in the industry were accepting of, has been scrapped in favor of whatever formula a state regulator decides to pick. That means if the Commissioner of Business Oversight decides on an APR disclosure, which many industry trade groups believed they had already successfully lobbied against, all loans and non-loans alike would have to report an APR, a mathematical impossibility for a product like merchant cash advance. At present, however, all that is known is that the Commissioner’s choice must be an annualized metric.


https://www.bna.com/calif-smallbusin...-n73014482092/

Opposition Remains
Though the bill amendment doesn’t define which metric should be used, its supporters are backing the use of an estimated annualized rate to give borrowers something akin to an apples-to-apples comparison among products.

But some companies that offer open-ended financing products such as merchant cash advances and other nonfixed term financing say APR doesn’t give an accurate picture of the cost of their products, which can depend on the volume of transactions to repay credit.

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the amended version of the bill needs to get approval in both the Assembly and the Senate by Friday before the legislative session ends.

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**ps I can sell a 600% rate on paper in big bold print, and so can some other salespeople...so...this is where the real salespeople come in on the phone ( some are cutting thier own throats and they havent realized it yet)


I wonder what the A paper renewals with the double dip will look like on paper .. 66%...100%? Is kabbage going to disclose all the interest up front...i never calculaed that number to an exact figure. If it pays back early then what...you opened a hornet nest

And I said from the beginning you are not regulating some small ( in regards to funding) dui woman...the money is what is going to be regulated

[Karen37a]

https://dailyfunder.com/showthread.p...ders-and-ISO-s Thread from Feb 2017

Quote Originally Posted by Karen37a View Post
Yes it does.

And my main point has always been ( and I may be wrong but I doubt it ), that every time regulation steps in...Financial industry, stock-market /securities...Mortgage industry; when they force it, it brings a myriad of new problems with it, problems that people do not foresee. The main one being compliance and extra compliance and extra extra compliance, then compliance for compliance.

This forces the small players to merge in with the large ones because they can not have a dept on the second floor dedicated to it, nor can they bear the expense, or want to.So when people think the market will open up to less competition because the seedy brokers get out, thats partially true, but it also creates a monopolistic effect where you have to join the big boys club or you cant survive, or you have to have inside connections or extreme knowledge or deep pockets. Then compensation gets cut to the loyal ones on the inside, thats fun to watch and some of the big boys shut down .

Its like watching a movie but its live

here comes the monopoly

Ive seen it too many times before I guess, fool me once, fool me twice, fool me 3 times, i had enough....I don't trust them or people, or policing organizations and I do not want to be on here saying "told you so" in 3 years.This argument has been beaten to death. I am not going to change anyones mind and half the people have self serving beliefs and ideas.

I guess you would have had to experience it to know.

[Karen37a]

Edit

GL

[BB_Cooper]

So this CA bill proposed by Glazer died in committee??

[Sean Cash]

So this CA bill proposed by Glazer died in committee??

Yes, but then parliamentary procedure was challenged, the bill was withdrawn from the committee and just fast tracked to the floor for a vote. It passed. it will become the law, just needs the governor's signature (this is his party's bill).

[Karen37a]

Yes, but then parliamentary procedure was challenged, the bill was withdrawn from the committee and just fast tracked to the floor for a vote. It passed. it will become the law, just needs the governor's signature (this is his party's bill).

And this does not help with backdooring or defaults or stacking or background checks

just monitors the money and puts people in a more "fiduciary" capacity and opens the door for full-on regulation additional costs and monopolies

And the brokers who cant make sales...still cant make sales

[abfunders]

This bill might still be good for those of us non-salesmen. If it gets signed, it won't be about selling and faking out the client and talking around the rate, and pulling a fast-one, it's about related costs and comparing ROI, hopefully puts the merchants focused on getting higher quality money that will do what they need, not endlessly lock them into a debt cycle.

[Karen37a]

This bill might still be good for those of us non-salesmen. If it gets signed, it won't be about selling and faking out the client and talking around the rate, and pulling a fast-one, it's about related costs and comparing ROI, hopefully puts the merchants focused on getting higher quality money that will do what they need, not endlessly lock them into a debt cycle.

You still wont make sales if you are not a salesperson...its a dream

We are salespeople...anyone who doesnt want to be a salesperson can get a job as a non sales person I would assume

[Karen37a]

well ... I did everything I could...rallied people, calls for vote to change...I tried..gl in calif


So here's a question...are the contracts going to have a big fat 200% Apr on the face of the contract and these non sales people will have an easier time selling??

Add*And do not think that these merchants who try to slime out of paying back loans and advances do not have an extra weapon to slap you with

[fundingsmbs]

California historically, has always been a beast regarding this space. There were two historical lawsuits in California that newbies don't know about. The suit against Advanceme and the suit against Rewards Network. Both parties had to settle. Here is a blast from the past article:

http://www.greensheet.com/emagazine.php?story_id=3088

[Karen37a]

California historically, has always been a beast regarding this space. There were two historical lawsuits in California that newbies don't know about. The suit against Advanceme and the suit against Rewards Network. Both parties had to settle. Here is a blast from the past article:

http://www.greensheet.com/emagazine.php?story_id=3088

It wasnt newbies who battled me on regulation for 3 years

some went so far they made up a stock fraud story on me to say that I do not want regulation because I cant get thru the vetting process...which is a bunch of bs

And just like I said

they amended the bill the last second like I said they would, then people like Electronic Transactions Association (ETA), whose members include companies that offer merchant financing, like PayPal Inc. and Amazon.com Inc. opposed it

and lickity split hustled it in a bing bam boom ..voted on approved

and i am sure just like Doofy frank zillions of amendments will be coming down the pipeline

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as stated

Dodd-Frank financial reform bill, an 850-page bill that has generated over 2,000 pages of interpretive regulations so far and required “as many as 698 new regulations,”


bureaucratic suffocation of mega-bills...the wolf is in the hen house

[fundingsmbs]

It opens the door to more suits. If the bill is signed off, and, funder's do not disclose the fees they are mandating, history will once again repeat itself. What is the APR for a 1.49/3 mo deal on a daily repayment? anyone?...

[Karen37a]

It opens the door to more suits. If the bill is signed off, and, funder's do not disclose the fees they are mandating, history will once again repeat itself. What is the APR for a 1.49/3 mo deal on a daily repayment? anyone?...

200%? lol not compounded?

what is a renewal on A paper 1 .20 50k additional 50k at 1.20...i bet its more than 20% ..guessing its always 6666


but if it pays back early double that

[jdlaw]

Personally, I don't do CA for numerous reasons. I just wait for the businesses to move to TX or FL then fund'em.

[Karen37a]

Personally, I don't do CA for numerous reasons. I just wait for the businesses to move to TX or FL then fund'em.

I didn't go in there either...people yelling at me on the DF saying I didn't know how to fill out the forms...meanwhile, I think I licenced up 5000 people over the years In Financial Services...various states

More if you count in the one hit wonders...pass the test...quit day one when they see the phone

[fundingsmbs]

merchant's who need the money, even if disclosed, will still sign to get the money. Will some merchant's jump out of their seat if an APR is disclosed on front page of contract? Yes. Time will tell how this shapes the industry in Cali and if other states adopt the practice in the future

[Karen37a]

merchant's who need the money, even if disclosed, will still sign to get the money. Will some merchant's jump out of their seat if an APR is disclosed on front page of contract? Yes. Time will tell how this shapes the industry in Cali and if other states adopt the practice in the future

Articles on unconscionability

https://www.sfchronicle.com/bayarea/...e-13153780.php

https://www.americanbanker.com/news/...lif-high-court

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Calif. Supreme Court: High-Interest Loans May Be Subject to Price Unconscionability Attack ( this was a consumer payday loan)

I still believe ( I am not a lawyer) "plaintiffs have the burden of proof an and will have to prove that the lender" operated in a noncompetitive market or charged interest at rates that departed significantly from rates charged by competitors," and whether the rates were excessive in relation to costs and/or generated excessive profits"

And this is where the bice comes in...best pricing

Some Lenders like pp are at 9% ?

You add Fiduciary into this mix anyone who doesn't meet or beat that rate will be in breach of Fiduciary Duty

** And I am repeating myself again...there are going to be lawsuits set up just so merchants can weasel out and debt relief is going to go on the attack( this is the major reason for me not getting a Calif Licence and past posts have me stating" you are going to get sued" )

And numerous people wanted regulation...advocated for it, over and over and over me beating against it over and over and over...they wanted this and pushed for it


*** I can see one way to possibly protect against liability. I am going to check financial privacy laws before I toss the solution out ***...and repeating I am not a lawyer so the idea will have to be checked


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As I sit here thinking about all this like bad dream some people should realize that some of us have squeaky clean ex-licences because we try to know the laws and rules, possibilities, landmines and traps. I said in the past its like I am watching people being herded like sheep into a fire pit from hell numerous time and that it is hard for me to stay silent watching it.
And disparaging my background to get a point across, then looking into it and then You found out I was in Igc ..big bang theory classes, 12th grade reading and math level n the 3rd grade, played the clarinet, was on a swim team at the YMCA , gymnastics team, tennis team, Ymca Leader club Vice president, youth and govt, volunteers for handicapped swim, and taught the underprivileged kids to swim, sat morning program coordinator 4 years from 9th grade to 12th ( taught kids gym, swimming and arts and crafts...every sat morning).. and was most popular in High school., aerobics instructor and a lifeguard, driving around in a red BMW convertible ..happy? Made you feel better or worse?)


I do not have a crystal ball to see things. In business, you live through things ...30 years of living through things in financial services.. I think I understand some of it. I know Regulation is a nightmare. I was not hiding from something crazy like he tries to make it seem so he can get his piker agenda through.

The overconfidence of some who think because they can say "vertical" 'box" and other industry jargon terms that makes them relevant in some way.
People use other peoples false ego against them to con them. Take their shoes right out from underneath them as they are saying "thank you for letting me call myself CEO on a business card because id never be 1099"...(great send me your deals..white label) (" you are 1099 you fool..Karen").

This is not a game anymore...I told everyone that months ago.

People need to regroup...i said NOW OR NEVER 100 times...this is really the last time I am helping

People in Calif should be pissed off

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You have bled with Wallace now bleed with me

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


Add Edit...I forgot that I played softball....pitcher and shortstop, over 400 batting average .. MVP ..went to the state regionals lost in the final game( they broke our team up said it was unfair, we were slaughtering people 40 -0)...they made rules to stop the games ..we would have won if they didnt break us up... and did ballet, tap and jazz dance

Some were predestined for wall st( from hard work up t 5 am before school to go to swim practice)...some a truck driver ( and there is nothing wrong with it but this is Finance)...we are a capitalistic society, not socialists...deal with it

Once we were broken up...my best friend hit a home run off of me to win a final game( the following year.)..i didnt know if I should hug her or cry...we did hug each other on the mound ...some of you people need to learn how to lose with dignity

[Karen37a]

Website on Kabbage comparion on Apr

http://blog.streetshares.com/how-to-...ess-loan-offer


Calculate the APR on Your 6-month Kabbage offer:

Enter your line of credit amount in green
Enter your fee for the first two months in green
Enter your fee for the next four months in green


http://blog.streetshares.com/how-to-...ess-loan-offer

View your APR in the yellow box
You’ll see the fee is being charged on the original loan amount and not the remaining balance. (Scroll to the right to see the cost of credit and the total cost of the loan.) See below for further explanation.


Line of Credit *$ * * 50,000* Factor Rate 16.0%
Fee 1 - 2 months 4.00% APR 54.1%
Fee 3 - 6 months 2.00%

Payment 1 Payment 2 Payment 3 Payment 4 Payment 5 Payment 6 Total
Principal payment *$ * * * 8,333* *$ * * *8,333* *$ * * * *8,333* *$ * *8,333* *$ * * *8,333* *$ * * 8,333* **Principal* *$ * 50,000*
Fee payment *$ * * * 2,000* *$ * * *2,000* *$ * * * *1,000* *$ * *1,000* *$ * * *1,000* *$ * * 1,000* *Cost of credit* *$ * * 8,000*
Total Payment *$10,333.33* *$ * *10,333* *$ * * * *9,333* *$ * *9,333* *$ * * *9,333* *$ * * 9,333* *Total cost* *$ * 58,000*


I think Some boiler room isos know math*

[jdlaw]

Don't have a problem with merchants seeing price of the money. If you haven't done
a cost justification by the time they see paperwork, you'haven't really sold the funding yet.

If we haven't had a conversation on how a $50K advance is benefitting your business,
I haven't done my job. But if you project a 20% increase in revenue (assume you're doing $60K monthly)
that's an annual increase of $144K annually, year after year all things being the same.

So, if I'm getting you $50K for $77,500 (1.35), money is costing you $17,500.
Is it worth $17,500 to jump revenue by $144K, or is it better to just be stagnant.

[Karen37a]

Don't have a problem with merchants seeing price of the money. If you haven't done
a cost justification by the time they see paperwork, you'haven't really sold the funding yet.

If we haven't had a conversation on how a $50K advance is benefitting your business,
I haven't done my job. But if you project a 20% increase in revenue (assume you're doing $60K monthly)
that's an annual increase of $144K annually, year after year all things being the same.

So, if I'm getting you $50K for $77,500 (1.35), money is costing you $17,500.
Is it worth $17,500 to jump revenue by $144K, or is it better to just be stagnant.

I agree. The same for me but unfortunately this was a hail mary for some brokers who can't sell. Some that are out of business. They thought it would help them somehow...no matter how many word salad posts i made people will have to experience it for themselves

[Karen37a]

( almost ) All the people who wanted Regulation can list how this was helpful if they would like

[admin]

Karen if you feel like you need to add more commentary, just edit your previous post. Some of these threads have 3 and 4 posts in a row all from you and it's hard to find other people's input.

[DiamondBL]

There are at least a couple lenders (we know) that use proper full disclosure on the loan they issue (which looks like an MCA but is called loan).

[Michael I]

as of now is this only for California ? if yes i will say that funders will just walk away from that state

[Karen37a]

as of now is this only for California ? if yes i will say that funders will just walk away from that state

I agree. And they will walk away from other states that follow along. People cant demand risky capital at low rates from people. Default ratios prove its not working model.

Id search for my posts on default ratios/ sba statistics etc ...but it isnt worth the energy