[ryan $]

Decline - Reason, Lowered Payments to Principis

My Response "Principis had FlexPay, a True percentage of sales month over month. Their monthly payment is different each month. Yes the payment, lowers and rises on a monthly basis but THE MERCHANT DID NOT LOWER PAYMENTS"

I mean this is common knowledge right? How can people approving deals not know this happens with principis

[rdgllc]

Decline - Reason, Lowered Payments to Principis

My Response "Principis had FlexPay, a True percentage of sales month over month. Their monthly payment is different each month. Yes the payment, lowers and rises on a monthly basis but THE MERCHANT DID NOT LOWER PAYMENTS"

I mean this is common knowledge right? How can people approving deals not know this happens with principis

I had a decline from a very reputable lender one time because they didn't know TBB offered bi-weekly payments. Lender thought they lowered on TBB even though the payment amount and schedule never changed. Client had to dig up and show his contract and bi-weekly addendum from TBB in order to reverse the decline. It wasn't a huge issue for the client, but come on. lol

[WestCoastFunding]

Decline - Reason, Lowered Payments to Principis

My Response "Principis had FlexPay, a True percentage of sales month over month. Their monthly payment is different each month. Yes the payment, lowers and rises on a monthly basis but THE MERCHANT DID NOT LOWER PAYMENTS"

I mean this is common knowledge right? How can people approving deals not know this happens with principis

Sadly, I had a similar situation.

Maybe more funders need to adjust payments weekly to prevent being stacked on.

[ryan $]

I just thought Principis is the onle lender that does it ALL THE TIME. Its like common knowledge.

I guess I can understand though - there are always new underwriters.

[abfunders]

This seems to be a dream. The simplicity for a broker of the ACH, the advantage for the merchant of the CC splits.

Why aren't more people doing this?

[OC Funder]

This seems to be a dream. The simplicity for a broker of the ACH, the advantage for the merchant of the CC splits.

Why aren't more people doing this?

1) It's the worst of both worlds where the funder is concerned - the inconsistency in payback of a CC split deal with the NSF risk of an ACH deal
2) If you read the contracts, more funders than you realize actually offer this in order to keep it structured as a true cash advance and not a loan. They will NOT go out of their way to alert the merchant of this; it's on the merchant to call and request a change in payment due to declining sales (backed by statements/login info). Doing so may affect their ability to get a renewal if they are no longer performing at their expected turn (what you may have incorrectly been selling as the note's term).

Moral of the story: Understand the product you're selling, kids! (Not directed at Mikah but the community in general)

[Michael I]

I just thought Principis is the onle lender that does it ALL THE TIME. Its like common knowledge.

I guess I can understand though - there are always new underwriters.

it is usually the front line min wage person that declines that and it doesn't get to the actual uw .

[abfunders]

OC, you are saying accurately.

The funder wouldn't want to do that because it affects their cash-flow assumptions, however it does reduce defaults significantly. I know that's why they don't do it up-front, however I would wonder why there aren't more funders who don't offer this plan. I guess for the same reason they don't want to do a CC split.... it's harder to really underwrite properly.

[OC Funder]

OC, you are saying accurately.

The funder wouldn't want to do that because it affects their cash-flow assumptions, however it does reduce defaults significantly. I know that's why they don't do it up-front, however I would wonder why there aren't more funders who don't offer this plan. I guess for the same reason they don't want to do a CC split.... it's harder to really underwrite properly.

Sadly, you can't assume everyone really cares about the health of the merchant. True, it may keep a file or two out of default, but some may decide that by clawing back quicker on the rest of the performing portfolio and redeploying the capital at a faster rate, they'll make more by letting a few die... especially if their pocketbook struggles to keep up with production.

[abfunders]

Yeah, OC, they're selling a product.

Just like the luxury vacation salesman don't care if you take out a 2nd mortgage on your home to buy their product. It's about selling cash.

MCA are designed to ignore merchant health. Then brokers come in and sell it as the best thing since sliced bread. Hence.... our industry has a lot of actors in it.

I know not everyone wants to, it's just curious that there aren't more who do offer it as a marketing ploy to brokers to place their harder-to-fund files with them so that they can sell the daily/weekly draws easier.

[fundingsmbs]

there are a lot of merchants who take an advance with fixed daily or weekly and a few months in, modify the repayments to funder. When a new funder sees the banks and a change in the fixed daily or weekly, it's easy to assume a modification may have happened. I would not decline it immediately but rather train the UW to ask first for clarification/proof, than decide.

[Bloomingdale Funding]

there are a lot of merchants who take an advance with fixed daily or weekly and a few months in, modify the repayments to funder. When a new funder sees the banks and a change in the fixed daily or weekly, it's easy to assume a modification may have happened. I would not decline it immediately but rather train the UW to ask first for clarification/proof, than decide.

Train the underwriter? Lol

[fundingsmbs]

^, yes, the funding co should. How many deals are being rejected without looking closer daily

[ryan $]

The Company who declined the file initially, did re-look at it and issued an Approval, so I respect them for that, Unfortunately got a better offer/more points elsewhere and funded at 4:58 yesterday evening.

[Bloomingdale Funding]

^, yes, the funding co should. How many deals are being rejected without looking closer daily

I have worked with many underwriters, big to small shops. Nothing to train.

Majority, if not all, will take under table payment if u want them to pre approve at 15-20% as a good intent gesture.
Obviously, if it goes thru, then u pay the full 100% prior to funding or it gets hold up. I have seen iso reps pay underwriters $100-$200 undertable approvals. I personally have paid some myself.

I have talked to some ceos and cfos and kickbacks to them are common .

[fundingsmbs]

^ now thats a story for Bloomberg Bloomingdale!

[Chambo]

I had a decline from a very reputable lender one time because they didn't know TBB offered bi-weekly payments. Lender thought they lowered on TBB even though the payment amount and schedule never changed. Client had to dig up and show his contract and bi-weekly addendum from TBB in order to reverse the decline. It wasn't a huge issue for the client, but come on. lol

TBB also has variable payments....ACH payments that fluctuate with merchant seasonality. I have had to produce the actual contract proving the merchant wasn't in default before as well