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  1. #26
    Quote Originally Posted by abfunders View Post

    Also, I don't think that a merchant who's entering a 24-month program with a balloon will be going back for MCAs so quickly (at least I hope not). Saving the merchant the money on the payoff and increasing cash-flow might save their business.
    I'm looking at a submission that used a similar service one month ago on a 12 month term for ~500k and is already looking for advances right now

    I question the profitability on these, no way all these deals are getting completely stacked out.

  2. #27
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    The ZBLs say that the balance is $0 and that's all in every case where we have done transactions. It is a mutually agreeable transaction between us and the merchant cash company. It is NOT a settlement or a default.

  3. #28
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    Michah,

    You are 100% correct on everything you have said, especially the lines about saving their business.

    And again, we have no adversarial relationships with any MCA companies. They are happy to get their capital back from a merchant who is struggling with cash flow.

  4. #29
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    In the end, the letters we get prior to closing before we payoff all the MCAs are "payoff" letters and then we get zero balance letters. There is no language anywhere in the letters stating "settlement" or "default" nor are any 1099-Cs issued which would indicated that it was settled. The contract is simply amended by the payoff letter. Its very simple.

  5. #30
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    Quote Originally Posted by KanjorskiPartners View Post
    The ZBLs say that the balance is $0 and that's all in every case where we have done transactions. It is a mutually agreeable transaction between us and the merchant cash company. It is NOT a settlement or a default.
    It’s been brought up before, and I still don’t understand why you’re targeting consolidation of MCAs. 99% of subprime lenders and A paper MCA funders aren’t funding right now. Why not simply use your program to target companies without MCAs considering there isn’t anyone offering subprime 24 month loans? You’d have no competition while getting higher grade borrowers. Why simply pass that up and go right to consolidating cash advances? That really makes no sense to me.

  6. #31
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    We target MCAs because more than a majority of the time they are unsustainable financing products and without renewals and new money, and even after that, the business cannot sustain the payments. The businesses need a new amortization to survive/thrive and get their equity back and the merchant cash companies normally want to get out of an over-leveraged stack anyway. Its an easy case for a refinance and everyone wins in our transactions.

  7. #32
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    Quote Originally Posted by KanjorskiPartners View Post
    In the end, the letters we get prior to closing before we payoff all the MCAs are "payoff" letters and then we get zero balance letters. There is no language anywhere in the letters stating "settlement" or "default" nor are any 1099-Cs issued which would indicated that it was settled. The contract is simply amended by the payoff letter. Its very simple.
    You can't possibly guarantee that an MCA company will word THEIR zero balance letters the way YOU tell them to.

  8. #33
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    Quote Originally Posted by WestCoastFunding View Post
    It’s been brought up before, and I still don’t understand why you’re targeting consolidation of MCAs. 99% of subprime lenders and A paper MCA funders aren’t funding right now. Why not simply use your program to target companies without MCAs considering there isn’t anyone offering subprime 24 month loans? You’d have no competition while getting higher grade borrowers. Why simply pass that up and go right to consolidating cash advances? That really makes no sense to me.
    Because they're angels from heaven doing the lords work! Duh!

  9. #34
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    Quote Originally Posted by KanjorskiPartners View Post
    We target MCAs because more than a majority of the time they are unsustainable financing products and without renewals and new money, and even after that, the business cannot sustain the payments. The businesses need a new amortization to survive/thrive and get their equity back and the merchant cash companies normally want to get out of an over-leveraged stack anyway. Its an easy case for a refinance and everyone wins in our transactions.
    Wait a minute, so rather than use this 24 month term loan product to market to good businesses who can’t access capital because there aren’t options available, you chose to market to companies that are higher-risk — all because you want to do your civic duty and help them?

    If you did have investors, wouldn’t they think this plan is bat****crazy? What investor would say, “bypass the strongest customers that would pay this same rate and, instead, focus on the weakest customers who have a history of adding subordinated high interest debt that puts the original facility in jeopardy”.

    Really doesn’t make any sense to me.

  10. #35
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    Quote Originally Posted by WestCoastFunding View Post
    Wait a minute, so rather than use this 24 month term loan product to market to good businesses who can’t access capital because there aren’t options available, you chose to market to companies that are higher-risk — all because you want to do your civic duty and help them?

    If you did have investors, wouldn’t they think this plan is bat****crazy? What investor would say, “bypass the strongest customers that would pay this same rate and, instead, focus on the weakest customers who have a history of adding subordinated high interest debt that puts the original facility in jeopardy”.

    Really doesn’t make any sense to me.
    he answered before in a different post because he needs to make a certain percentage and cant have it be usury. this way he can make 40-50 points and have contract only say 20%.
    i fully agree with mica that this helps a merchant however ricky point on how funders will react is a legitimate concern .To me the fact that it is the funder decision and no arm twisting i do not see the issue

  11. #36
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    Quote Originally Posted by Michael I View Post
    he answered before in a different post because he needs to make a certain percentage and cant have it be usury. this way he can make 40-50 points and have contract only say 20%.
    i fully agree with mica that this helps a merchant however ricky point on how funders will react is a legitimate concern .To me the fact that it is the funder decision and no arm twisting i do not see the issue
    1. This would require approaching the original funder and asking for a reduction in the total debt — which could trigger the Funder filing.

    2. What’s to stop funder from adding to Datamerch.
    Last edited by WestCoastFunding; 04-24-2020 at 12:57 PM.

  12. #37
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    Quote Originally Posted by KanjorskiPartners View Post
    No we do not tell merchants to stop paying their old advances. We pay off their MCAs and get them zero balance letters. We roll it all into one loan at the par value owed on a 24 to 36-month amortization with one monthly payment.
    When you negotiate a lower payoff amount with the MCA funders, is the merchant made aware of this? Specifically, do you tell the merchant what the negotiated payoff amount would be, or are they kept in the dark?
    Last edited by WestCoastFunding; 04-24-2020 at 01:59 PM.

  13. #38
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    The discount to par and our APR makes the transaction work for us and manages our risk. MCA companies get their capital back with their expected return and they redeploy it, our referral partners get paid and the business / merchant receives a more-than-manageable monthly debt payment and gets on a path to getting their equity in the business back. Period.

  14. #39
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    this has been asked before and yes they are made aware of this right from the start. They are more-than-happy to have a new payment that is 50 to 90% less per month than it is on their MCA amortization.

  15. #40
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    Quote Originally Posted by WestCoastFunding View Post
    When you negotiate a lower payoff amount with the MCA funders, is the merchant made aware of this? Specifically, do you tell the merchant what the negotiated payoff amount would be, or are they kept in the dark?
    This has been asked before and yes they are made aware of this right from the start. They are more-than-happy to have a new payment that is 50% to 90% less per month (because of their new amortization) than it is on their MCA amortization and the MCA company is more-than-happy to get an accelerated return on their capital or at minimum the expected monthly return on their capital, therefore the can reroll the compounded return into a new origination. Its a win-win-win-win transaction no matter how you try to dissect it (broker, merchant, us, MCA funder)

  16. #41
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    Quote Originally Posted by Michael I View Post
    he answered before in a different post because he needs to make a certain percentage and cant have it be usury. this way he can make 40-50 points and have contract only say 20%.
    i fully agree with mica that this helps a merchant however ricky point on how funders will react is a legitimate concern .To me the fact that it is the funder decision and no arm twisting i do not see the issue
    We haven't had one merchant cash company react poorly. They are happy to get their capital back on a file that is overleveraged, especially the 1st and 2nd position funders.

  17. #42
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    Quote Originally Posted by KanjorskiPartners View Post
    We haven't had one merchant cash company react poorly. They are happy to get their capital back on a file that is overleveraged, especially the 1st and 2nd position funders.


    Are you guys familiar with Solace or New Horizon?


    This program has been around for many years by the way.



















    www.UccRadar.com

  18. #43
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    Can rest assured on a secured advance platform there would not be a release of lien on property if they did not pay in full. If he owes me 10K he will pay the whole 10K not taking 8K and I will make life hell for the merchant that uses the debt consolidation company to dodge the debt. They were all about it when we fund them we are all about it when its time to collect. No funder should take even once cent of a discount if they are contacted by these clowns on behalf of the merchant debt
    Metromedia Funding Solutions LLC
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    https://www.metromediafunding.com/

    Like us on Facebook!https://www.facebook.com/mpmetromedia/

    Rick@metromediafunding.com

    Your friends in funding.

  19. #44
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    Well Rick...we're not debt settlement if you read the post. Its a good thing that we never see metromedia funding solutions anywhere on the thousands of applications that we process. You would be the first funding company to want balance in full. The smart companies get their capital back, take their accelerated return and put it back out on the street LOL.

    I'm sure it this policy "...will make life hell for the merchant..." that prevents you from expanding your business and obtaining customers. Don't worry, you are already doing that.
    Last edited by KanjorskiPartners; 04-27-2020 at 10:02 AM.

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