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03-20-2020, 06:09 PM #1
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Merchants defaulting and lowering payments
We’ve been getting Numerous merchants Bouncing stopping payment and panicking what is everyone’s feedback on this
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03-20-2020, 06:17 PM #2
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i can already hear the phone calls fr debt relief companies calling merchants to stop repayment and now they have a national crisis to be the reason for such . ambulance chasers will also be helping merchants who claim they are being sucked dry. this is just the beginning. when investors lose their money they to will be chasing everyone for repayment
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03-20-2020, 06:24 PM #3
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I truly believe default rates will exceed 35% for almost all funders, A paper included. Most will not survive
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03-20-2020, 06:25 PM #4
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^ if that occurs, they will not survive. anything double digits >10% and the red zone begins
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03-21-2020, 01:01 AM #5
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Goldman Sachs GDP prediction:
Q1: -6%
Q2: -24%
Keep in mind, at the height of the 2008 financial crisis it dropped by -8.4% in Q4 2008.
Guys, if these Goldman Sachs predictions come to be, default rates of 35% are totally realistic and could even be conservative. I’d be shocked if even Marcus is funding on Monday.Last edited by WestCoastFunding; 03-21-2020 at 01:09 AM.
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03-21-2020, 03:31 PM #6
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Guide thru a true-up
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03-21-2020, 08:11 PM #7
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It's a FLOOD. A ton of merchants are really hurting right now or completely closed. But be aware, there are merchants with multiple positions who are hearing form brokers or directly form funders that relief is available if they are affected... and Voila, all of the sudden they are being affected. Hard to separate truth from fiction in times like these. MTD helps but not much with how quick the world is changing.
Work with your merchants and support them. Build the relationship even stronger and help them come back. That is the only way you will not get slaughtered. KEEP IN TOUCH and be a RESOURCE.
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03-22-2020, 02:56 PM #8
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Many are just taking advantage. We're going case by case on whether to give them a break or not.
I will say that many files are going to Legal this week for sure.
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03-22-2020, 03:08 PM #9
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Had a merchant say they needed payments stopped because governor gave an order demanding non-essential businesses must close, and that her business had been closed for days because of it. Looked it up and couldnt find such order. Funder requested MTD, and she said she couldn’t provide right now because she was busy running her business.
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03-22-2020, 03:46 PM #10
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03-22-2020, 05:31 PM #11
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03-22-2020, 05:35 PM #12
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Florida has many businesses shut down by the Governor
Dave Lambert, Business Development
dave@fcbankcard.com
Merchant Services Consultant
High Risk Merchant Payment Solutions
SBA 7(a) Loans & Short-Term Funding
T/VM: 727-291-7890
Office: 727-233-1111
Skype: fc-financial
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03-22-2020, 11:22 PM #13
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03-23-2020, 12:08 AM #14
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03-23-2020, 12:31 AM #15
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so the legal threat to merchants prob will not work too well. during a time of national crisis, those threats could backfire on you really fast. for all contracts that are purchase/sale, if sales slow down, it is within their legal rights to have any fixed repayments modified. for those who are signing loan contracts with web bank, celtic bank, b of I, finwise that some funders use to fund merchants, those are not purchase/sale contracts and have tough language to wiggle out during a slowdown in sales, however, if the merchant cannot pay it, they cannot pay it. sue them and BK will fllw.
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03-23-2020, 02:48 AM #16
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I am a merchant in Texas, and was just hit with a shelter in place that starts on Monday (03/23/2020) night at 11:59PM.. 80% of my business is online.. But with the shelter in place I an not even able to go to my business to produce and ship the orders out. I'm currently in an advance with Paypal. Called them up, and they said they would immediately stop drafting payments! See my post here on the forum about this titled Covid-19 Shelter in Place: Paypal stopped my repayment drafts!
So worst case sceanario, I am never able to recover from this what happens in regard to the Paypal deal I am in?
Do I file bankruptcy and it all gets sorted out then?
I have no clue how the other side of the coin works. I have an 800 credit score and have all ways paid my debts. So with all my new found time I am trying to learn a lot about how all this works and what's the best exit strategy so that I am prepared as best I can be.Last edited by Winning; 03-23-2020 at 02:57 AM.
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03-23-2020, 08:14 AM #17
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It really will go by what they decide than . I had merchants that were hurt with the hurricane in Florida a couple of years ago.some funders were really good with sticking to the specified percentage and if the merchant did not rebuild they did not go after him . Some were ok with stopping lowering payments but than will not renew later on or forgive loan. And some were just plain jerks and should be burnt down.
now most funders are going by mtd and a ton of merchants that won't submit it they are filing judgements.number 1 is always to be in touch and have open conversations.
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03-23-2020, 08:29 AM #18
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Also how long this takes is going to be a huge factor.funders can only survive for so long and at some point they will start grabbing what ever they could before they shut down.
2 weeks every thing will be the same
2 months more than 50% will be closed
6 months everyone is out of business
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03-23-2020, 12:50 PM #19
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This is a very unfortunate situation for everybody but it's disgusting to see some of these merchants take advantage of what's going on. I had three different merchants call me last week to renew. They sent me statements and the next day two asked me to stop payments because they were ordered to stay home (NM & AR) and the other had already stopped paying three days earlier.
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03-23-2020, 01:13 PM #20
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03-23-2020, 02:19 PM #21
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So for me.. This is similar to a trauma accident.. If you are in an accident and get your legs cut off, the 1st step to saving your life is to stop the bleeding. Once that is under control and you live through the night, you can then go through the revision surgery, spend some time in ICU, transfer to inpatient rehab, eventually get new prosthetic legs, & then be able to walk again, albeit with a little bit different gate(the way you walk).
So in this situation I have to 1st stop the bleeding, which in this case is $$$'s...
Then I can have a shot to live to see another day then...
*** Go through revision surgery (figure out what path I will attempt to take)...
*** Spend some time in ICU (maybe take on additional debt to give my self a shot to seeing this new path through)...
*** Transfer to inpatient rehab (do business with the new changes that I decided would be best for me)...
*** eventually get new prosthetic legs (proof of concept! my new path is working out and the rehab did some good, so I am ready to double down and learn how to walk with prosthetic legs)...
*** I am now back walking (my business may not look exactly the same as it did before I lost my legs, but I have adapted and I am still Winning!)...
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03-23-2020, 02:24 PM #22
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https://www.washingtonpost.com/us-po...omic-stimulus/
they just need to pass this bill. they are trying to push rapid loans that are forgiven if its specific to payroll. a lot is riding on this stimulus package for small business owners. but as usual, bipartisan politics impacting decisions
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03-23-2020, 08:22 PM #23
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Ondeck down. All those that stacked ONDECK are gonners!!
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03-23-2020, 09:06 PM #24
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03-23-2020, 10:12 PM #25
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OnDeck sent me some amazing offers today.
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