[blashley]

Can someone please explain to me why some Funders require payback months and why some dont? Wouldn't a Funder want to know a business owners revenue for a year ?

[FCF Fund]

It gives idea of performance with prior year going into future months. It helps identify seasonality. So if it's a 6 months deal you'd want to see Jan-June 2018 to get an idea of what to expect for 2019.

[blashley]

I am more curios, to know about the funders who dont require payback months. Are they underwriting more on data or dont care about the merchants prior months of revenue.

[DTFdowntofund]

Its requested to justify volume for seasonal businesses. It's smart underwriting, not based on a funding shop itself. Generally they'll seek financing, or a bridge, during the slower months. If you additionally send the pack back months / months by which are the highest in revenue for the business.. itll give them more adequate info to better determine the funding amount they're qualified for.

[WestCoastFunding]

I am more curios, to know about the funders who dont require payback months. Are they underwriting more on data or dont care about the merchants prior months of revenue.

It’s not that there are funders that require them, it’s that there are funders that will fund businesses with seasonality. And every seasonal business is going to need to show payback months. For instance, if the company is a resort, and they’re seeking financing in Feb, I’m going to want to see how much revenue they usually make in March-Aug. Hell, I want to see how a sandwich shop outside of college campus does in the summer. I want to see how much home construction companies do in the winter. I want to see how much a indoor baseball batting cage facility does in summer. I want to see how well inflatable children’s bounce house party rentals do in the winter months. Etc. etc.

[blashley]

I get it if the business has seasonality.But on average deal, what allows some funders who are going out long term to just go off 3 months of bank statements and bank login for deals. When you have other funders requiring payback months on all deals they fund.

[DTFdowntofund]

Because they have the right to request whatever documentation they choose to validate and verify the risk prior to funding. Believe me, if it were your money, you'd want to do the same.

[ridextreme]

I get it if the business has seasonality.But on average deal, what allows some funders who are going out long term to just go off 3 months of bank statements and bank login for deals. When you have other funders requiring payback months on all deals they fund.

Every funder is different with different underwriting criteria. Do you really think every funder is following the exact same underwriting guidelines?

[DTFdowntofund]

I don't really see the big deal in getting them either? If they request it. Just get it. Its a simpler stip in the grand scheme of things.

[blashley]

Every funder is different with different underwriting criteria. Do you really think every funder is following the exact same underwriting guidelines?

Thats what im trying to figure out. I'm not fighting about stips,just trying to figure out what capability/know how some funders have versus the funders who stip heavy.

[DTFdowntofund]

Thats what im trying to figure out. I'm not fighting about stips,just trying to figure out what capability/know how some funders have versus the funders who stip heavy.

It has nothing to do with a funder stipping heavy. They are going to ask you for payback months for all seasonal industries because that's how you underwrite.

[blashley]

im not talking about a deal with seasonality. Just a regular deal.

[brokerCompany]

Might be a new underwriter who just graduated with their associate's degree in arts and trying to flex their underwriting muscles

[WestCoastFunding]

im not talking about a deal with seasonality. Just a regular deal.

Then find another funder.

Providing payback months can often get you an INCREASED offer should the 3-6 months of statements you already submitted had a down month or two. But if that bothers you so much, then don’t use them.

I mean, everyone is explaining exactly what they’re needed for, and you keep continuing asking why they need them. Work with one of the other 5,073,575 funders then.

[WhoisKingsley]

Can someone please explain to me why some Funders require payback months and why some dont? Wouldn't a Funder want to know a business owners revenue for a year ?

Depending on the business - Funders want to see how the sales were the same time last year. "Payback Months" is a term we use in the industry B2B but if you tell a Merchant they need to send payback months they are like WTF?

Explain that an offer is based on your future receivables, yes, but we would like to see your sales from the same time last year. Even though you aren't seasonal Mr. Merchant, your type of business and location is a big factor in your sales. We want to see how you did last year and make sure we are giving you an approval and a payback amount you can afford during this time of year.

Also, do you have anything coming up in the next 3 months that may be different from what you did last year that would help show the underwriter that there will be a boost in sales? We love to see businesses take advantage of holidays and social events to boost their products or services. This would be a great highlight to give them along with the payback months. Once the season is over, I would love to compare your last years sales vs. this year and see how you did. We can also take that information and see if we can start growing your reputation with our funding partners to get you into a more strategic financial product if an advance wasn't your first choice for cash flow.

GOLD ^