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10-01-2014, 09:32 AM #1
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Ahh, the whole "double interest" thing. And what do you call paying multiple stacks?! Single interest?
Lets take the merchant in question as an example:
They are paying 5 positions, $917 daily, that's $4585 per week. You get them a consolidation deal for $80,000 which relieves them of all that debt. Unfortunately, they only net $35,000 but still; $80,000 @ 1.38(a factor I have sold on consolidations) 9 Month term that is about $585 daily, about $2900 per week.
So, the Lenders all get paid off, the Merchant gets more money and saves about $1700 per week in fees and we make a lot more money than if we had done a lousy $10,000 6th position 60 day 1.499 stack. The Lender who consolidates does their due diligence and adds an addendum that protects their investment. Everyone's happy. Sounds pretty good to me, much better then stacking. Risky, of course. But it makes sense and I am glad to see some Lenders are finally doing this(successfully).
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10-01-2014, 10:06 AM #2
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10-01-2014, 11:14 AM #3
Reputation points: 2893
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The one that stipulates that by taking more money you automatically default and must pay a fine. Yes, some will ignore it and I am sure collection will be a *****. I also think the sense of relief and gratitude would inspire loyalty by many of these Merchants. We have all made mistakes or used bad judgment in our lives. Some of us learn from it and correct ourselves, some don't. Consolidation is not a perfect solution, but it is a solution. One that can reduce stacking and legitimately benefit our clients.
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10-01-2014, 12:10 PM #4
If someone stacks once they will stack again. And by consolidating all you are doing is playing into the hands of the 5 companies that get paid off. They get there money out of the deal and can now go back into it having already secured a profit on the first deal.. The whole idea of consolidating a deal with more then 1 or 2 positions is crazy. The banks will end up getting screwed every time.
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