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12-14-2018, 11:08 AM #1
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The Strange Connection Between Bloomberg, the AG’s Office, and the State Senator Prop
https://debanked.com/2018/12/the-str...4821124&_p_c=1
Wow. This screams corruption. I wonder if OnDeck is involved and if so to what extent. They have a ton to gain by the higher risk companies going down (same as all A funders but their book is probably the largest).
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12-14-2018, 11:15 AM #2
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Who is the main co that stacks ODC and possibly.....
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12-14-2018, 11:47 AM #3
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12-14-2018, 11:38 AM #4
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Seems like a pretty loose, circumstantial argument. Definitely interested to see if more concrete evidence emerges.
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12-14-2018, 11:48 AM #5
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12-14-2018, 12:56 PM #6
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12-14-2018, 12:00 PM #7
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Has ODC sued any co for stacking them that anyone knows of? Outside of Rapid VS Pearl, who else has tried to go that route. Did it fizzle out because layering isn't illegal and even blue chip companies who fund in this space do it to?
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12-14-2018, 12:24 PM #8
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Can’t think of any.
I’m gonna run with my conspiracy theory: understanding the economy is about to slow, current merchants may find themselves defaulting on advances, and these guys want to collect without the COJ funders jumping in line. So they proactively fed this story in hopes of getting the COJ guys out of the way when it comes to collections.
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12-14-2018, 12:39 PM #9John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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12-14-2018, 12:52 PM #10
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I think there’s zero risk of any sweeping regulation that would hurt them at all. It will be impossible to outlaw MCAs. But these guys would love to see regulation that reigns in brokers and their competitors. Notice how quickly the SBFA was to endorse the Rubio/Brown bill, and also step forward with their own stuff they’ve been pushing for 2-3 years.
So I see this story as nothing but upside for OnDeck and the likes.
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12-14-2018, 01:01 PM #11
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12-14-2018, 12:55 PM #12
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I kinda agree with John here.... Why would anyone bring focus to the industry that would get the attention of not only regulators and law makers, but banks and other institutions that they have stacked themselves.
You can cool believe that now this has been brought to light a host of institutions are going to make damn sure that their clients did not only stack them, but also make sure there is not a COJ in the weeds that could cause cash collateral to get swept away.Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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12-14-2018, 12:59 PM #13
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Because the SBFA has been trying to do just that for years.
Rather than keeping clear of any focus, Rapid jumped all in:
“This is a bad practice that must be eliminated,” said Jeremy Brown, chairman of RapidAdvance and SBFA. “Unfortunately, certain small business financing providers are misusing “confessions of judgment.” We firmly support any legislation that will provide small businesses protection from the misuse of this practice. If a small business we fund runs into trouble, we believe they should be treated fairly and deserve our commitment to help resolve the issue in a manner that is professional and respectful.”Last edited by WestCoastFunding; 12-14-2018 at 01:01 PM.
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12-14-2018, 01:22 PM #14
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I like the conspiracy. Instill "the enemy of my enemy is my friend" moment. So when some poorly timed regulation hits just before a recession, the "higher-tier" lenders/funders have put some distance between them and the "lower-tier" lenders/funders, thus mitigating regulatory damage.
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12-17-2018, 09:33 PM #15
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Love a good conspiracy theory does not seem far off. But there is plenty of no coj 2nd position company’s like Lendini, Forawrd and Knight that don’t need a coj on every deal .Brokers know those deals are the easiest to stack and they operate clean practices with brokers and clients.COJ only funders will have to live without cojs eventually 2nd position funders that used to use a COJ on every deal will go out of bussiness or adjust and lower there funding amounts and underwriter better.
Last edited by arealfundguy; 12-17-2018 at 09:35 PM. Reason: Typos
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12-14-2018, 12:49 PM #16
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lets not forget, Bloomberg was once upon a time fired by Salomon Brothers. Capital Z partners (the ones who bought Pearl for 40m) is run by two former Salomon brothers bankers. Just adding to the conspiracy theory.
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12-14-2018, 01:09 PM #17
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If they are against it, they should also be against working with brokers. Brokers take the same deals they fund with SBFA members and stack them with companies like YSC and others. So, if the SBFA really wants to get down to brass tactics, its both the second position co and brokers who they are against. Not saying all brokers stack SBFA but many prob do on deals monthly.Surprised they even participate in broker shows anymore considering the quagmire
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12-14-2018, 01:11 PM #18
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12-14-2018, 01:12 PM #19
Anyone who thinks this was a simple smear piece by one or two funds with an axe to grind is being quite naive. This was well thought out, planned, strategized....and has been going on for months. Zeke first reached out to every currently or formerly associated with Yellowstone back in August or Sept I believe
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12-14-2018, 01:18 PM #20
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12-14-2018, 01:20 PM #21
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12-14-2018, 01:13 PM #22
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actually, there is a case study in california on usury that made all contracts null void with merchants. it is not impossible. It was a $64M settlement representing 3,000 merchants.
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12-14-2018, 01:15 PM #23
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Well what was puzzling was yesterdays piece started turning from subprime and took a direct hit on all MCA's that charge up to 99%
https://www.bloomberg.com/news/artic...redatory-loans
Krueger, the incoming chairman of the Senate Finance Committee, said in a statement that she also would seek changes in the marshal program. She added that lawmakers should clarify that cash advances are loans and therefore subject to state usury laws. These laws limit interest to 25 percent.
Under current law, most New York judges accept the industry’s contention that cash advances aren’t loans, allowing them to charge for their services at an effective annual rate of 400 percent or more.
So i don't care what the motives are but if it was generated by funders now you hear them discussing MCA-Usuary and 25% cap.Marcus Clapman | Business Development | Cresthill Capital
(High Commissions Payout Group)
——————————————————————————
Tel: 917-521-6528 | Fax: 212.671.1473
Email: bizdev@cresthillcapital.com
http://www.cresthillcapital.com
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12-14-2018, 01:19 PM #24
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12-14-2018, 01:31 PM #25
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