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04-24-2020, 08:09 AM #1
- Join Date
- Jan 2020
- Location
- New York, NY
- Posts
- 102
The bottom line, is that original 'total payback' is not being paid back. In your example, the MCA company is getting $12,625 less than what is stated on the contract. You are using the word 'interest' which is the difference here. It's a very clear stated payback amount on an MCA. Anything less than that is technically considered a default. Most MCA companies won't default the client if an agreement is reached - but it's exponentially harder to get a merchant an MCA once they have 'settled' on a prior MCA. I don't think any broker on here would risk their direct lender relationships - or risk the chance that they will never be able to do another MCA for whichever client takes part in this.
Last edited by FHFunding; 04-24-2020 at 08:14 AM. Reason: accuracy
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04-24-2020, 10:01 AM #2
- Join Date
- Apr 2020
- Location
- Broomall, PA
- Posts
- 123
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.
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04-24-2020, 11:55 AM #3
- Join Date
- Jan 2020
- Location
- New York, NY
- Posts
- 102
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