[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.