[Karen37a]

Karen the first half of your argument shows why we need to show an annulized rate —> businesses are getting killed by the renewal rates (and augmented double dipping —> which should imo be included in disclosure) to make a decision based on ToC on your first ST loan that doesn’t reflect the ultimate cost of capital needed to run their business for the year..... they’ll get churned (most likely) and end up with a ToC per MCA/loan they can’t manage or understand.... unless the loan is longer than one year with no double dipping.

Put it this way, If u were a biz owner taking a loan and knew u were taking 140% Effective APR (or choose your own annualized rate definition), would you take it? Would u churn it? Would u even realize you were getting double dipped w/o an accountant (presuming u are like most business owners that don’t understand double dipping — and yes Karen, I know u know how damaging that can be)? I doubt it.

Why are we able to feature a low single digit loss rate across our four year portfolio ( half the industry loss rates at A paper shops) but fund 470 FICOs or consolidate 8 positions with APR-based loans in the teens to 30s? We get creative to de-risk the customer instead of offering a commoditized MCA or loans.

Which is why I advocate for it when its warranted but what people do not understand isThe merchant is going out of business with or without a cash advance and it was not the cash advance that put them under
Its like they are a product on a grocery store shelf...with a shelf expiration date

This one needs to be frozen or it spoils in 3 months
this one 9''
this is a can of soup
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If you had a crystal ball to see the future and you knew it was going to default in 12months 14 months 24 months whats the rate?AND when you renew certain people even A paper 1st postion you are speeding up the default ratio time ( which is why I make them wait for the balance to go lower sometimes...I do talk about their business goals to see if they really want to make it. I come from a cross selling loans/investment/insurance financial planning background) ( which is not some isos style )..., like that hurricane barreling in picking up speed( so they do not deserve a longer term and lower rate)..and if you give to much money certain people think they hit lotto and force themselves under

( this has nothing to do with disclosures)

Now maybe you can't see the defaults coming in advance but I can reasonably guess, just like I can guess when the MCA broker/ iso/ funder is going to fold after talking with them for 10 minutes. Or the story they are going to spin.

I've been doing it too long, it's like a giant repeat groundhogs day. Different decades different hairstyles and different clothing styles

Someone saying the rate put me under is an excuse because I know from extensive past experience with stock and bonds in a total market free fall implosion and loans in a world collapse implosion.. like rats backed into a corener they will blame everyone for their demise except the man in the mirror

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add . The bottom line is we are not partners in the merchants business. We are not going to participate if they strike it rich. Its a cash advance with no real way to get your money back if they go out of business ..all risk , high chance of default. I really in my heart of hearts believe If they do not want the money, go to the bank or their grandmother, lose their money. We are not a charity or a grant. Or go on the Shark tank and have mr Wonderful humilate you on tv or take a 51% stake in your business and sell it out from under you.