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08-28-2014, 09:24 AM #1
- Join Date
- Aug 2014
- Posts
- 187
Floor Rate?
I know this is an amateur night question, but I'm sitting here with a new guy, and he's asking me what the lowest possible rate is, and I thought: "Gee, I really don't know....I think IOU is offering 13.99%, but I don't really speak to them and a lot of my guys are not qualifying like that." I have heard numbers as low as 12.99, and some prospects are saying they got a 10 - which I assume to be a lie.
What does group consensus say about the very lowest possible rate and funder, and of course, who is that funder?
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08-28-2014, 09:28 AM #2
Floor Rate?
Ondeck is offering a 1.11 but it's only for their in house sales guys
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08-28-2014, 09:48 AM #3
- Join Date
- Apr 2013
- Location
- NY
- Posts
- 203
On deck will do the lowest rates, I have clients funded 12 month 1.20s with no fees with Ondeck, however those are unusual situations where we have came to special arrangements because that's lower than their normal buy rates. And those were super clean files the merchant could have got bank loan but didn't want to be bothered with all the paperwork, on decks quick and simple streamlined process made it worth the extra cost to the merchant.
IOU has an actual 12.99% APR loan, but it has fees that raise the actual cost.
Keep in mind that very few merchants will qualify for either of those programs.
If you are going to mention your rock bottom rates, I would always do so with a disclaimer-
"well Mr Business Owner since you insist on know what is the best possible rate we can do, its 12.99% however very few of my clients qualify for that program, send in your paperwork and I will get your the lowest rate that you qualify for"
If someone tells you they got a 10% rate 9/10 times they have it confused with their holdback %. You'd be amazed how many business owners that take out cash advances still do not understand what a cash advance is, and they think the holdback % is the cost of the money
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08-28-2014, 09:58 AM #4
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
Rapid Capital offers 6 month 1.15's for their inside sales team.
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08-28-2014, 09:59 AM #5
Have to agree with Isaac the lowest I have seen is the ondeck 1.11, I have run into it a couple of times when competing with their in house sales guys and unless you can get them a lot more money that makes the merchant forget about the rate chances are you are going to lose that battle
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08-28-2014, 10:25 AM #6
Floor Rate?
Gbr's 15 month 130 is a sick product, huge offers but very few actually fund. A lot of them get killed late in the underwriting process and you are left with a pissed off merchant
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08-28-2014, 10:44 AM #7
- Join Date
- Mar 2014
- Location
- Ann Arbor, Michigan
- Posts
- 1,289
You might be interested in one of our term loans that run as low as 6% simple, not add on and terms up to 120 months.
If you are competing with a low MCA rate we will always come in with longer terms and lower monthly payments.
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08-28-2014, 10:46 AM #8
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08-29-2014, 09:28 AM #9
- Join Date
- Mar 2014
- Location
- Ann Arbor, Michigan
- Posts
- 1,289
Advance Credit Funding
734-929-3800
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08-28-2014, 10:45 AM #10
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
GBR's underwriting process is the toughest I've ever seen. ARF is also really tough. Stips upon stips upon stips. Good people to work with but they put the merchants through a ringer!
Last edited by MCNetwork; 08-28-2014 at 10:48 AM.
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08-28-2014, 11:06 AM #11
- Join Date
- Sep 2012
- Posts
- 23
Swift Capital does 6 months 1.079 in house. ISO channel 1.139 6 months. 12 month lowest rate in house for us 1.179
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08-28-2014, 11:35 AM #12
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
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08-28-2014, 05:27 PM #13
- Join Date
- Mar 2013
- Posts
- 33
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08-28-2014, 08:52 PM #14
- Join Date
- Sep 2012
- Posts
- 23
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08-28-2014, 11:11 AM #15
Floor Rate?
Wow that's really low
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08-28-2014, 11:15 AM #16
how can that be profitable with cost of underwriting, bad debt and all the other overhead factored in????
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08-28-2014, 11:25 AM #17
- Join Date
- Jun 2013
- Posts
- 26
I just saw OnDeck give a 1.15 for 9 mos. Merchant averaged about 70K over last 3 months but very up and down, and received 65K
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08-28-2014, 01:02 PM #18
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08-28-2014, 02:41 PM #19
which begs the question why are they offering these rates
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08-28-2014, 03:02 PM #20
- Join Date
- Sep 2012
- Posts
- 23
Our loss rates are much lower than 10%
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08-28-2014, 03:20 PM #21
Floor Rate?
That's a great question if it's not profitable why are they doing it?? grab market share and hope to one day way down the line make money, sounds very similar to 1997-2000 dot com era
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08-28-2014, 03:39 PM #22
- Join Date
- Dec 2013
- Posts
- 4,713
the only ones making money are probably the short term 65-88 day paybacks.
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08-28-2014, 03:45 PM #23
- Join Date
- Sep 2012
- Posts
- 23
That being said...7.9% isnt something everyone gets! on average we are at about 1.19 for 6 month rate
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08-28-2014, 05:42 PM #24
I think companies are making money in the traditional deals the 5-8 month 1.35-1.42 deals and I think some companies are making money on some of the longer term deals depending on the factor rates and how good underwriting is.
That said these companies with these crazy low rates though they sound great to sell, I don't know how long they are going to be around and I would be scared to send a lot of my business there when I don't know if they will be around in 6 -12 months when i need to renew my merchants.
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08-28-2014, 10:56 PM #25
- Join Date
- Jul 2014
- Location
- Jackson Hole Wy
- Posts
- 730
Swift has great rates, speed and service NOT there yet compared with the other guys. But with the strict UW and low loss I am sure they will continue to be around for a long time
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