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04-24-2020, 11:49 AM #1
- Join Date
- Apr 2020
- Location
- Broomall, PA
- Posts
- 123
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.
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04-24-2020, 12:03 PM #2
- Join Date
- Oct 2016
- Posts
- 4,318
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.
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04-24-2020, 12:34 PM #3
- Join Date
- Jun 2015
- Posts
- 3,317
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
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04-24-2020, 12:49 PM #4
- Join Date
- Oct 2016
- Posts
- 4,318
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04-24-2020, 02:51 PM #5
- Join Date
- Apr 2020
- Location
- Broomall, PA
- Posts
- 123
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04-24-2020, 04:12 PM #6
- Join Date
- Oct 2013
- Location
- Designer
- Posts
- 580
Are you guys familiar with Solace or New Horizon?
This program has been around for many years by the way.
www.UccRadar.com
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04-24-2020, 02:45 PM #7
- Join Date
- Apr 2020
- Location
- Broomall, PA
- Posts
- 123
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.
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