[Don Dolla]

We are about to go into the worst recession we as Americans have ever seen (our generation at least). **** is real

[Don Dolla]

Trumps dumb ass tariffs are to blame FYI. All u Bozzos who didn’t go to school, it’s simple economics

[Don Dolla]

If I could rep my own thread I would. REALEST **** I EVER WROTE!

[Sean Cash]

In case anyone is wondering if history repeats itself, this was the 2008 version of Bloomberg articles about how MCAs are bad, except it was in Forbes, not Businessweek. https://www.forbes.com/2008/01/31/ca...l#222b8dc125f0

The same thing happened. Politicians rallied around protecting businesses from "predatory lenders" as you can see from an example of a resolution passed below. By 2009, when the bottom of the economy dropped out and all credit completely froze, MCA companies went from being demonized as vampires to "fintech" pioneers who were keeping small businesses alive.

COJs were not in use then, but the point is the same. Terrible article comes out, politicians act outraged, then it becomes evident that there is no alternative and so everyone goes back to acknowledging that nobody else is going to offer financing to these businesses, especially not banks.

Feels like deja vu.

The U.S. Conference of Mayors
76th Annual Meeting
June 20-24, 2008
Miami
2008 ADOPTED RESOLUTIONS

PROTECTING MAIN STREET SMALL BUSINESS OWNERS FROM PREDATORY LENDERS

WHEREAS, America’s 26.8 million small businesses are the engine of the U.S. economy, employing half of all private-sector employees, representing 99.7% of all employers, and responsible for 45% of net new jobs generated annually in the last decade;and

WHEREAS, eight million of these small businesses pursue financing each year throughout the United States; and

WHEREAS, 65% of these eight million (5.2 million) are unable to secure traditional bank loans or lines of credit; and

WHEREAS, as a result, many small businesses use family money, personal credit cards or personal loans and approximately 35%have relied on home-equity loans to finance their businesses;and

WHEREAS, the recent turmoil in both the housing and credit markets has caused banks to tighten their lending criteria and consequently, credit opportunities to small business owners have been significantly reduced; and

WHEREAS, a perfect storm has emerged across the United States, leaving many small businesses, including millions throughout the main streets of our cities and towns, struggling to access the capital they need to sustain and grow their businesses; and

WHEREAS, predatory lenders have emerged to exploit the current credit environment and increasing cash flow needs of small businesses and are selling usurious products known as merchant cash advances (MCA), which are advances on a business’s future credit card receivables (aka “factoring of future credit card sales”); and

WHEREAS, merchant cash advances are not loans and do not have to follow state or federal lending regulations, and feature over 85% approval rates and imputed annual percentage rates as high as 200%, and in addition to these egregious rates, require daily deductions of 18-25% of the small business’s credit card sales -significantly more than a business can afford; and

WHEREAS, merchant cash advance companies have already lent approximately $2 billion at egregious rates and have been quoted in leading main stream media publications such as Forbes, Business Week, Dallas Morning News, and American Banker claiming that their new originations have increased 75% in the first half of 2008; and

WHEREAS, America’s cities need strong Main Street businesses to continue to have a stable tax base, safe streets and a vibrant commercial center, and

WHEREAS, as with payday lenders and predatory lenders in the home mortgage community, Mayors need to take a leadership role to scrutinize predatory merchant cash advance companies, educate small business owners of the dangers posed by these firms, and increase awareness and promotion of alternative, more affordable funding sources to support this vital segment of our economy;and

WHEREAS, the mayor in each of our cities can protect our small businesses by promoting and advising small business owners to ask and have answered five simple questions before agreeing to accept any type of financing from a non-traditional provider:

a.
Is the financing product a regulated loan?
b.
What is the total interest paid and how does that cost translate into an Annual Percentage Rate (APR)?
c.
What is the payment amount?
d.
What is the payment frequency?
e.
Exactly how long will it take to repay the loan?

NOW THEREFORE, BE IT RESOLVED, that The U.S. Conference of Mayors strongly supports small businesses and the independent business owners located in our cities and will protect them from predatory lenders offering exploitive merchant cash advances;and

BE IT FURTHER RESOLVED, that the mayor in each of our cities shall educate Main Street business owners and the small business community of the dangers of merchant cash advances and promote to them alternative lending sources that are more affordable;and

BE IT FURTHER RESOLVED, that to protect the general health and viability of their small business communities, cities should investigate whether they can effectively regulate or ban merchant cash advances.

[BROKER TIME]

In case anyone is wondering if history repeats itself, this was the 2008 version of Bloomberg articles about how MCAs are bad, except it was in Forbes, not Businessweek. https://www.forbes.com/2008/01/31/ca...l#222b8dc125f0

The same thing happened. Politicians rallied around protecting businesses from "predatory lenders" as you can see from an example of a resolution passed below. By 2009, when the bottom of the economy dropped out and all credit completely froze, MCA companies went from being demonized as vampires to "fintech" pioneers who were keeping small businesses alive.

COJs were not in use then, but the point is the same. Terrible article comes out, politicians act outraged, then it becomes evident that there is no alternative and so everyone goes back to acknowledging that nobody else is going to offer financing to these businesses, especially not banks.

Feels like deja vu.

The U.S. Conference of Mayors
76th Annual Meeting
June 20-24, 2008
Miami
2008 ADOPTED RESOLUTIONS

PROTECTING MAIN STREET SMALL BUSINESS OWNERS FROM PREDATORY LENDERS

WHEREAS, America’s 26.8 million small businesses are the engine of the U.S. economy, employing half of all private-sector employees, representing 99.7% of all employers, and responsible for 45% of net new jobs generated annually in the last decade;and

WHEREAS, eight million of these small businesses pursue financing each year throughout the United States; and

WHEREAS, 65% of these eight million (5.2 million) are unable to secure traditional bank loans or lines of credit; and

WHEREAS, as a result, many small businesses use family money, personal credit cards or personal loans and approximately 35%have relied on home-equity loans to finance their businesses;and

WHEREAS, the recent turmoil in both the housing and credit markets has caused banks to tighten their lending criteria and consequently, credit opportunities to small business owners have been significantly reduced; and

WHEREAS, a perfect storm has emerged across the United States, leaving many small businesses, including millions throughout the main streets of our cities and towns, struggling to access the capital they need to sustain and grow their businesses; and

WHEREAS, predatory lenders have emerged to exploit the current credit environment and increasing cash flow needs of small businesses and are selling usurious products known as merchant cash advances (MCA), which are advances on a business’s future credit card receivables (aka “factoring of future credit card sales”); and

WHEREAS, merchant cash advances are not loans and do not have to follow state or federal lending regulations, and feature over 85% approval rates and imputed annual percentage rates as high as 200%, and in addition to these egregious rates, require daily deductions of 18-25% of the small business’s credit card sales -significantly more than a business can afford; and

WHEREAS, merchant cash advance companies have already lent approximately $2 billion at egregious rates and have been quoted in leading main stream media publications such as Forbes, Business Week, Dallas Morning News, and American Banker claiming that their new originations have increased 75% in the first half of 2008; and

WHEREAS, America’s cities need strong Main Street businesses to continue to have a stable tax base, safe streets and a vibrant commercial center, and

WHEREAS, as with payday lenders and predatory lenders in the home mortgage community, Mayors need to take a leadership role to scrutinize predatory merchant cash advance companies, educate small business owners of the dangers posed by these firms, and increase awareness and promotion of alternative, more affordable funding sources to support this vital segment of our economy;and

WHEREAS, the mayor in each of our cities can protect our small businesses by promoting and advising small business owners to ask and have answered five simple questions before agreeing to accept any type of financing from a non-traditional provider:

a.
Is the financing product a regulated loan?
b.
What is the total interest paid and how does that cost translate into an Annual Percentage Rate (APR)?
c.
What is the payment amount?
d.
What is the payment frequency?
e.
Exactly how long will it take to repay the loan?

NOW THEREFORE, BE IT RESOLVED, that The U.S. Conference of Mayors strongly supports small businesses and the independent business owners located in our cities and will protect them from predatory lenders offering exploitive merchant cash advances;and

BE IT FURTHER RESOLVED, that the mayor in each of our cities shall educate Main Street business owners and the small business community of the dangers of merchant cash advances and promote to them alternative lending sources that are more affordable;and

BE IT FURTHER RESOLVED, that to protect the general health and viability of their small business communities, cities should investigate whether they can effectively regulate or ban merchant cash advances.

i was not in the business in 08 but i know several people who were and they feel that this time feels like alot more action will be taken

[GoodCustomerService]

COJ's were used in the space back in 2007. Why does nobody remember that?

[BROKER TIME]

COJ's were used in the space back in 2007. Why does nobody remember that?

anyone one that was in the industry since 07 their brains are prob fried from all the drugs

[Sean Cash]

COJ's were used in the space back in 2007. Why does nobody remember that?

By who? I never came across one back then.

[mcaguru]

Sean that's ironic that a decade later the very same Forbes puts out a piece making a case as to when the MCA product can be helpful to a business:


https://www.forbes.com/sites/forbesc.../#47b46e5a3309

[GoodCustomerService]

PM me. We should talk.

[Michael I]

COJ's were used in the space back in 2007. Why does nobody remember that?

i do not remember that who was it ?

[GoodCustomerService]

Small funder in LI started using them in 2007. Pretty sure the 2nd company to start using them was Pearl when they operated out of Yellowstone's office. That was 2008. I remember Andy from SFS telling me "I would never participate in a deal with a COJ. It makes it a loan and usurious!"

[fundingsmbs]

was Pearl the first official large mca using them? Followed by YSC who sounds like today's largest COJ funder?

[shieldfunding]

Sean that's ironic that a decade later the very same Forbes puts out a piece making a case as to when the MCA product can be helpful to a business:


https://www.forbes.com/sites/forbesc.../#47b46e5a3309

actually you cannot compare an editor of Bloomberg writing an article 10 years ago.. do a an mca provider posting on community voice

[Chambo]

COJ's were used in the space back in 2007. Why does nobody remember that?

I don't remember hearing about COJ's until 09-10, the earliest, and then only on the bigger deals and initially, only in California

The issues today are more about the COJs and wiping merchants out completely. Comparing banking issues from 07-08 to today is apples to oranges

[GoodCustomerService]

Define LARGE MCA?

[Chambo]

Define LARGE MCA?

Usually over $100,000

[GoodCustomerService]

I was responding to @fundingsmbs question regarding Pearl being the first LARGE MCA to start using COJ's. I think size of the company isn't really relevant. Pearl was probably using them in their agreements more than most at that point, and was funding a lot of business. Pearl was killing it on individual units and had a minuscule default rate. So they didn't file many judgements overall. And, back then there weren't a substantial amount of large Pearl deals. So a lot of their deals, or at least for the first few years of the Abe/Meir days, didn't have COJ's and were small enough to deal with internally. That led to simple basic collection reps in the office (good old Marion) hounding people all day. It was effective until **** went crazy and $150k+ 2nd positions deals started to exist, and 4-15th positions started!

[mikethemcaman]

I still remember him on the phone telling merchants "Persistence beats resistance" and that Im gonna keep calling until you pay... Once told a default of mine, a tow company, to get in his tow truck and drive down to NY to make payments... Loved the suits though...

[pcfunder]

Trumps dumb ass tariffs are to blame FYI. All u Bozzos who didn’t go to school, it’s simple economics

This is definitely not Trumps fault. An entire economy doesn't go through a recession from a few years of one mans small influence through just one branch of government. It takes a lot more than one man to impact this country. People need to stop acting like Trump is so powerful. America has survived good presidents and horrible presidents. People are giving this man more credit than he deserves.

[newunderwriter007]

People are giving this man more credit than he deserves.

Technically you are correct, but not really. People invest based on how they think the market will move in the future. If enough people start to think the general business market will slow, they will slow down their activities, causing a slowdown. If people think Trump will somehow single-handedly wreck the economy, the damage will be done. Its more the thought of what Trump may do, rather than his own actions that would cause market disruptions.

[pcfunder]

Technically you are correct, but not really. People invest based on how they think the market will move in the future. If enough people start to think the general business market will slow, they will slow down their activities, causing a slowdown. If people think Trump will somehow single-handedly wreck the economy, the damage will be done. Its more the thought of what Trump may do, rather than his own actions that would cause market disruptions.

That's a fair honest good point newunderwriter and its true but I don't think trading of the stock market dictates recessions. I think that recessions just have a large impact on how the stocks trade. Like lets say America decided to spend trillions of dollars on a fictional war on terror that can never be won because you can't beat "terror" and instead bled us dry of resources and pride in ourselves which caused us to collapse 10 years ago only to have our government decide to put a band-aid on the collapse hoping a miracle will happen before the band-aid falls off. That's not really reflective of what traders or investors are thinking but instead the traders and investors will just be impacted from the results.

[newunderwriter007]

That's a fair honest good point newunderwriter and its true but I don't think trading of the stock market dictates recessions. I think that recessions just have a large impact on how the stocks trade. Like lets say America decided to spend trillions of dollars on a fictional war on terror that can never be won because you can't beat "terror" and instead bled us dry of resources and pride in ourselves which caused us to collapse 10 years ago only to have our government decide to put a band-aid on the collapse hoping a miracle will happen before the band-aid falls off. That's not really reflective of what traders or investors are thinking but instead the traders and investors will just be impacted from the results.

Wasn't talking about the stock market, although my point is also true for that. If business owners thinks that business will slow down, they will not hire more staff, invest less and look to cut costs. If enough people do that, group psychology cause a recession.

[pcfunder]

Wasn't talking about the stock market, although my point is also true for that. If business owners thinks that business will slow down, they will not hire more staff, invest less and look to cut costs. If enough people do that, group psychology cause a recession.

Then people are dumb because Trump's influence is only temporary and he controls so little regardless.

[Chambo]

In case anyone is wondering if history repeats itself, this was the 2008 version of Bloomberg articles about how MCAs are bad, except it was in Forbes, not Businessweek. https://www.forbes.com/2008/01/31/ca...l#222b8dc125f0

The same thing happened. Politicians rallied around protecting businesses from "predatory lenders" as you can see from an example of a resolution passed below. By 2009, when the bottom of the economy dropped out and all credit completely froze, MCA companies went from being demonized as vampires to "fintech" pioneers who were keeping small businesses alive.

COJs were not in use then, but the point is the same. Terrible article comes out, politicians act outraged, then it becomes evident that there is no alternative and so everyone goes back to acknowledging that nobody else is going to offer financing to these businesses, especially not banks.

Feels like deja vu.

The U.S. Conference of Mayors
76th Annual Meeting
June 20-24, 2008
Miami
2008 ADOPTED RESOLUTIONS

PROTECTING MAIN STREET SMALL BUSINESS OWNERS FROM PREDATORY LENDERS

WHEREAS, America’s 26.8 million small businesses are the engine of the U.S. economy, employing half of all private-sector employees, representing 99.7% of all employers, and responsible for 45% of net new jobs generated annually in the last decade;and

WHEREAS, eight million of these small businesses pursue financing each year throughout the United States; and

WHEREAS, 65% of these eight million (5.2 million) are unable to secure traditional bank loans or lines of credit; and

WHEREAS, as a result, many small businesses use family money, personal credit cards or personal loans and approximately 35%have relied on home-equity loans to finance their businesses;and

WHEREAS, the recent turmoil in both the housing and credit markets has caused banks to tighten their lending criteria and consequently, credit opportunities to small business owners have been significantly reduced; and

WHEREAS, a perfect storm has emerged across the United States, leaving many small businesses, including millions throughout the main streets of our cities and towns, struggling to access the capital they need to sustain and grow their businesses; and

WHEREAS, predatory lenders have emerged to exploit the current credit environment and increasing cash flow needs of small businesses and are selling usurious products known as merchant cash advances (MCA), which are advances on a business’s future credit card receivables (aka “factoring of future credit card sales”); and

WHEREAS, merchant cash advances are not loans and do not have to follow state or federal lending regulations, and feature over 85% approval rates and imputed annual percentage rates as high as 200%, and in addition to these egregious rates, require daily deductions of 18-25% of the small business’s credit card sales -significantly more than a business can afford; and

WHEREAS, merchant cash advance companies have already lent approximately $2 billion at egregious rates and have been quoted in leading main stream media publications such as Forbes, Business Week, Dallas Morning News, and American Banker claiming that their new originations have increased 75% in the first half of 2008; and

WHEREAS, America’s cities need strong Main Street businesses to continue to have a stable tax base, safe streets and a vibrant commercial center, and

WHEREAS, as with payday lenders and predatory lenders in the home mortgage community, Mayors need to take a leadership role to scrutinize predatory merchant cash advance companies, educate small business owners of the dangers posed by these firms, and increase awareness and promotion of alternative, more affordable funding sources to support this vital segment of our economy;and

WHEREAS, the mayor in each of our cities can protect our small businesses by promoting and advising small business owners to ask and have answered five simple questions before agreeing to accept any type of financing from a non-traditional provider:

a.
Is the financing product a regulated loan?
b.
What is the total interest paid and how does that cost translate into an Annual Percentage Rate (APR)?
c.
What is the payment amount?
d.
What is the payment frequency?
e.
Exactly how long will it take to repay the loan?

NOW THEREFORE, BE IT RESOLVED, that The U.S. Conference of Mayors strongly supports small businesses and the independent business owners located in our cities and will protect them from predatory lenders offering exploitive merchant cash advances;and

BE IT FURTHER RESOLVED, that the mayor in each of our cities shall educate Main Street business owners and the small business community of the dangers of merchant cash advances and promote to them alternative lending sources that are more affordable;and

BE IT FURTHER RESOLVED, that to protect the general health and viability of their small business communities, cities should investigate whether they can effectively regulate or ban merchant cash advances.

Sean, as you can remember, it was tight....but again, there weren't COJs freezing all of a merchants receivables, stopping them from doing business.

If COJs aren't curtailed, there will be screaming and crying (rightly or wrongly), and John Q public will listen, as will politicians.