[Chambo]

LOL

IOU central needs to be watched. I just saw them fund a decent sized $60k fixed daily 12 month ACH on top of an AMI $150k advance. They seem to think that loans on top of advances don't infringe on any contracts. They even have an underwriting rule that if an MCA is in place it needs to have 90 day seasoning before they will fund a loan.

IOU, New Logic, TBB, MAX, On Deck....they ALL stack on top

[AMLvet]

Stacking is only appropriate when a responsible lender goes behind an MCA and / or ACH product ,with a underwritten compliant loan. The merchant must demonstrate the ability to pay back and accomplish a tangible benefit from the transaction. The only outfit that does close to this is IOU. They take 2nd position with a 14.99 over 12months (yes there are fees ) would You rather have the other guys go behind with a 2M 1.50??

[Finance1]

Stacking is only appropriate when a responsible lender goes behind an MCA and / or ACH product ,with a underwritten compliant loan. The merchant must demonstrate the ability to pay back and accomplish a tangible benefit from the transaction. The only outfit that does close to this is IOU. They take 2nd position with a 14.99 over 12months (yes there are fees ) would You rather have the other guys go behind with a 2M 1.50??

I agree about IOU being "responsible" in regards to underwriting on top of an advance. I'm not sure anyone really knows the stats behind stacking and defaults. Still way too early in the game to have any reliable empirical evidence one way or another. I also think that TBB is "responsible" as well in making sure it's affordable.

And I also agree that I would feel better being behind a longer term deal than a 1.50/2. It gets muddy pretty quick though. The vast majority of merchants looking to stack have zero chance at qualifying for a "responsible" stack. So the IOU's and TBB's of the industry are in the serious minority in comparison to the you know who's out there hammering merchants.

Off topic but IMHO, IOU isn't going to make it in the US. I'm not sure how their Canadian parent is doing but from what I'm seeing with their underwriting and terms they are poised to fail. Once you figure in the fees on a 12/mo deal, their gross margin is about 23 cents on the dollar. Strip out the 6pt commission and they margin drops to 17 cents on the dollar. Their underwriting isn't THAT good. ISO's are going to load them up for the next 6-12 months and after that we'll see what happens to their portfolio and if they are still offering the same terms.

[MCNetwork]

Ouch! Rough post! There's no love for him on Ripoff Report either!

[Chambo]

If you're going to come to these boards and brag...better bring your A game! Seasoned Experts here who have no time for silly smoke & mirror promotions. I love it!!

[Scott Williams]

ISO’s that just submit deals to 3rd party companies to farm out will never be successful in this industry. You better learn which lenders like certain deals and know all their guidelines like the back of your hand. Anything else is just being lazy and you will never rise to the top.

[MCNetwork]

Hold on while I make some popcorn. I'm enjoying the fireworks!

[MCNetwork]

You are the fly in the ointment of the industry the loose wheel on a well oiled machine. I could go on with euphemisms but i dare not elude to one that would exceed your minuscule level of comprehension.

By the way, these are idioms. Not euphemisms. Just sayin'

[Capital Stack]

Hold on while I make some popcorn. I'm enjoying the fireworks!

LMFAO "why cant we all just get along"

[Chambo]

Hold on while I make some popcorn. I'm enjoying the fireworks!

Woo Hoo! Good ol DRAMA!

[HeatherF]

.. So at which moment did you pull his hair........

I come to the boards to get away from all the drama of working with a lot of females only to find the mostly male dominate discussion board is working on its own cat fight. Watch out for the press on nails to start flying.

[cashcowboy]

@MCnetwork good catch on the idioms
@chambo fasten your seat belt
@heatherF i get real gel manicures press ons fall off when im riding my cash horse to the cash saloon

[HeatherF]

The fact you know what a gel manicure is.. don't even know where to begin

Thanks for the entertainment!

[FactorExchange]

Don't feed the trolls ladies and gentlemen. Isn't that right mike?

[cashcowboy]

@ heather who said i was a male perhaps im the cashcowgirl

[admin]

OK cashcowboy you had your fun. This is a legitimate thread about stacking, an issue that deserves the active discussion its gotten so far.

Not everyone in the industry is an attorney and regulations governing all this are lax, if there are really any at all. Thus we have a wide range of opinions on what can or can't be done. There's a difference between calling out a perceived bad business practice and outright attacking someone. We've got a lot big names in the industry reading or participating in these discussions, even if some are using aliases. Let's keep it productive.

Everyone has the right to call BS on something, but just don't attack personally.

[Chambo]

aw man...just when it was getting good!

[HotRod]

The lenders can absolutely go after them. The merchant is selling a percentage of their future receivables and are presenting the value of those receivables with the statements they used for the application. The contracts clearly state they must maintain the way they run their business and that includes those accounts. If the merchant then intentionally changes their business practices and even change their accounts to avoid detection on another funding program, the first lender can easily and clearly prove it beyond a reasonable doubt in front of any judge.

[HotRod]

One last thing. There's a reason the good lenders require a payoff letter or balance letter on any UCC filing they find. They do not partake in stacking and if your rep finds out you partake in it. You can kiss goodbye any exception you need on a legitimate deal. Stop spending all your time on UCC's and give first time loans a chance. You'll avoid a lot of this mess.

[HotRod]

Oh and back to the legalities. If the first lender can prove the merchant intentionally devalued the receivables which were sold, changed the way their business is structured in order to avoid detection by them OR detection that their deal exists to the second lender, they can pursue the individual if the business should fail.

The problem is, the only good this does the first lender is if the business fails, with a large amount due and if they believe they can actually collect the funds anyways. This is why you rarely see judgements from MCA providers on credit reports.

[Franklin]

The most interesting stack I've seen in my travels was a merchant in Michigan.

I don't know which lender funded first and which ones stacked, they're in no particular order -



Balances

Ami 31000 cc
Platinum 2500 - (one payment from paying off)
Pearl ach - ??
Yellowstone 24,000
Pierce 5500

Merchant was doing 80K to 100k in Monthly sales, with 80,000 in mthly. gross deposits. Was looking for a 6th loan/advance to consolidate everything and lower weekly/daily nut. Would any funder take a deal like that?








-
www.UCCRadar.com
Make an offer, I dare you...

[Regium]

No way... he will consolidate and then just go get another advance a week later.

[Ryan Shiroky]

are these merchants on drugs?!?!?!? he is killing himself...

[Joseph Esparza]

I just spoke to someone that does seconds & thirds and is soliciting for more business - openly. Seems like business as usual for them.

[abfunders]

I don't know the search function for something else, but this thread caught my attention.
The industry has changed quite a bit in 5 years.
A Fundkite rep (maybe he worked somewhere else before?) complaining about "openly soliciting for for seconds and thirds."