[inacio]

I am asking this to the seasoned more advance people here.

Sales will not be were they were some some time, 6-12 months maybe?
Now, I am speaking to the industry i am in which is any retail store front shop.
DISCLAIMER sadly.
Retail store front shops.
Yes Iv'e been told many times seek a different industry

My credit card processing volumes in California is down by 35% and i'm sure cash is way down.

With that in mind.

With an MCA loan of $25k
Total payback $33,750
Term 8 Month's
Daily payments $192
Monthly $4,218

I just don't see it in the near future.

Yes other industries, Yes. I just don't see a sttruggling merchant paying those payments.

Your opinion?

[MCA]

Our CC portfolio of approx 4000 merchants, total processing volume is down 68% to date from same time last year. I don't see this getting better that soon, my brother who works at the Pentagon and is part of the Covid 19 task force there said they are all in agreement that we really don't get out of phase 1 easement until early next year, some states will try phase 2 but they will see a spike again. This will be the norm for awhile, unfortunately

[fundingsmbs]

without a vaccine or massive herd immunity the uncertainty is going to linger for awhile. in order to get to a large herd immunity status, 70% or more of the population would have to become infected and immune to it, and, reports are stating 1-3% currently are immune (lots of debates on real #s). will wearing face masks and opening up brick mortar again lead to healthy sales revenues again? nobody can really answer that question today. i certainly will agree that taking on expensive debt has to be on the low end of importance right now for most business owners. we will see after this next PPP round what occurs and how many were left behind without funding. we are in survival mode, which, is the worst stage to be in for an mca debt service. i think you will see select states and industries continue to be the norm for UW entertaining funding.

[Michael I]

I am asking this to the seasoned more advance people here.

Sales will not be were they were some some time, 6-12 months maybe?
Now, I am speaking to the industry i am in which is any retail store front shop.
DISCLAIMER sadly.
Retail store front shops.
Yes Iv'e been told many times seek a different industry

My credit card processing volumes in California is down by 35% and i'm sure cash is way down.

With that in mind.

With an MCA loan of $25k
Total payback $33,750
Term 8 Month's
Daily payments $192
Monthly $4,218

I just don't see it in the near future.

Yes other industries, Yes. I just don't see a sttruggling merchant paying those payments.

Your opinion?

I think we will see the return of credit card splits. Which is what you should do so you are paying a percentage and the funder is risking if the estimated 8 month term will take you 6 months if sale are back up or 12 plus month if sales are down

[Yankeeman07]

Credit card splits never disappeared.
Tighter underwriting moving forward.

Also, NO STACKING!!

Short-Term MCA should only be for "Growth" what specifically will the funds be utilized for.

Not a Broker stating "Max Offer"

[Michael I]

Credit card splits never disappeared.

when i started in this industry over 10 years ago,we were 100% credit card splits .fast forward a couple of years we were still 80% cc split. 2019 we were at 5% of cc split at most.I feel 2020 we will be doing 50/50 of cc split or even more.

[abfunders]

Our CC portfolio of approx 4000 merchants, total processing volume is down 68% to date from same time last year. I don't see this getting better that soon, my brother who works at the Pentagon and is part of the Covid 19 task force there said they are all in agreement that we really don't get out of phase 1 easement until early next year, some states will try phase 2 but they will see a spike again. This will be the norm for awhile, unfortunately

Processing is down 68% over all merchants, but what about over the merchants that are still in business?

[GoodCustomerService]

You have 3 kinds of merchants now:

1. The ones who are open and have not been heavily impacted (20% of our portfolio)
2. The ones who are open but have had a drop in revenue (70% of our portfolio)
3. The ones who are completely closed (10% of our portfolio)

Merchants in category 1 reported between 10-35% drop in revenue.

Merchants in category 2 have seen between 50-90% drops in revenue, and had payments reduced by an average of 80%. I don't think this group will ever regain normal payments again. Chances are they'll be at reduced payments until paid in full.

Merchants in category 3 are a mystery right now. They have no revenue at all. Most of them aren't making any type of payment right now. No revenue, no payments. I believe a quarter of them won't be reopening.

[inacio]

Consumer confidence will be the key (solution)
How can we get this consumer confidence back swiftly and quickly?
Obliviously it would be the cure to the virus.
I believe this is in the horizon sooner than what we expect, not talking about vaccines.
Thank you for the input

[Kevin Henry-Seacoast]

Consumer confidence will be the key (solution)
How can we get this consumer confidence back swiftly and quickly?
Obliviously it would be the cure to the virus.
I believe this is in the horizon sooner than what we expect, not talking about vaccines.
Thank you for the input

Consumer confidence may get a bump as states start opening up businesses again. Once the consumer realizes that life will be quite different until a vaccine is readily available, most will hunker back down. I expect that a lot of small Mom & Pop businesses may open back up, but struggle and ultimately close.

[J.Celifarco]

Consumer confidence may get a bump as states start opening up businesses again. Once the consumer realizes that life will be quite different until a vaccine is readily available, most will hunker back down. I expect that a lot of small Mom & Pop businesses may open back up, but struggle and ultimately close.

This is exactly what Governors and the President need to worry about with how they open back up. In the long run I am more worried about opening too soon and having this happen then staying closed longer and opening when people are ready to go out and start moving back to normal. If business try to open too soon they will spend money to prepare for that and being tight on cash if they spend money and dont have any sales that is going to make a bad problem worse in my opinion.

[Kevin Henry-Seacoast]

This is exactly what Governors and the President need to worry about with how they open back up. In the long run I am more worried about opening too soon and having this happen then staying closed longer and opening when people are ready to go out and start moving back to normal. If business try to open too soon they will spend money to prepare for that and being tight on cash if they spend money and dont have any sales that is going to make a bad problem worse in my opinion.

The old expression "death by 1000 cuts". Opening too soon and having the virus spike again or take longer to manage would be far worse than keeping things closed until things are more manageable. Either way, it's ugly..... The later could be less painful for the business owner.

[J.Celifarco]

The old expression "death by 1000 cuts". Opening too soon and having the virus spike again or take longer to manage would be far worse than keeping things closed until things are more manageable. Either way, it's ugly..... The later could be less painful for the business owner.

Unfortunately there are no right answers. We are all operating on "BEST GUESS" because we have never seen anything like this before.

[SFC]

This thread seems to be overly pessimistic. Nothing is ever as good as it seems (see 6 weeks ago) and nothing is ever as bad as it seems.

John's right, we're all operating on "best guesses." The thing I think that will hurt the most (and we've seen it a lot) is this culture of people deciding it's okay not to pay what they owe, be it rent, credit cards, loans, etc.

For people who legitimately can't afford it that's one thing, but there is so much info out there now on debt forgiveness and stopping payments and we've seen tons of merchants try to play the system.

I think this will only increase with merchants taking advances and then claiming Covid issues.

[WestCoastFunding]

You’ll know the industry is back when Marcus starts trolling DF again.

[Moshe73]

As an underwriter I'll be blunt here. I see the industry staying the same for the next several months at least(Ex: Shorter terms than usual, Essential businesses only, Cut commissions, etc). I'm sure high risk will return with their 20% fees and 10-20 payments for the riskier businesses in the coming weeks.

As mentioned above, no one knows whats going to happen. I'm still declining deals in states that are reopening as restaurants, retail, etc are all going to still be hit and who knows in a few weeks the reopened states could be back in lock down. Brokers often forget we aren't dealing with play money here and there are repercussions if we are not funding smart. For funders its best to stick with what we know will be safe and pay for now.

[NoBiggie]

You have 3 kinds of merchants now:

1. The ones who are open and have not been heavily impacted (20% of our portfolio)
2. The ones who are open but have had a drop in revenue (70% of our portfolio)
3. The ones who are completely closed (10% of our portfolio)

Merchants in category 1 reported between 10-35% drop in revenue.

Merchants in category 2 have seen between 50-90% drops in revenue, and had payments reduced by an average of 80%. I don't think this group will ever regain normal payments again. Chances are they'll be at reduced payments until paid in full.

Merchants in category 3 are a mystery right now. They have no revenue at all. Most of them aren't making any type of payment right now. No revenue, no payments. I believe a quarter of them won't be reopening.

Do you write off category 3 as bad debt today? Do you wait 3-4 months to see if they went BK or are still open?

[NoBiggie]

This is exactly what Governors and the President need to worry about with how they open back up. In the long run I am more worried about opening too soon and having this happen then staying closed longer and opening when people are ready to go out and start moving back to normal. If business try to open too soon they will spend money to prepare for that and being tight on cash if they spend money and dont have any sales that is going to make a bad problem worse in my opinion.

And if waiting around until it's safe to open again isn't until the end of 2021 (when they assume the vaccine will be ready, at the earliest), can you expect everyone to just sit and relax at home without rioting to get out of the house and go to public places?

[inacio]

This thread seems to be overly pessimistic. Nothing is ever as good as it seems (see 6 weeks ago) and nothing is ever as bad as it seems.

John's right, we're all operating on "best guesses." The thing I think that will hurt the most (and we've seen it a lot) is this culture of people deciding it's okay not to pay what they owe, be it rent, credit cards, loans, etc.

For people who legitimately can't afford it that's one thing, but there is so much info out there now on debt forgiveness and stopping payments and we've seen tons of merchants try to play the system.

I think this will only increase with merchants taking advances and then claiming Covid issues.

pes·si·mis·tic tending to see the worst aspect of things or believe that the worst will happen.

Its a valid question as to current events, hard to hear maybe but is very true. People and business will not be as before, for a while anyway.
I believe this environment will be short lived.

States will be fully opened and business operating fully by late summer July early August 2020, will it be the same commerce, of course not.
Some businesses will close.
A cure, not a vaccine will change the narrative. I am not taking no dam vaccine that's for sure.

[NoBiggie]

I think this will only increase with merchants taking advances and then claiming Covid issues.

Agreed. Merchant's have gotten much smarter about how they take their MCA's and I can't imagine only the real dirtbags are the ones who've closed up shop cuz they're already 4-7 positions deep (with 10 previous defaults)
Nature of our industry is we deal with real scumbags who'll stop at nothing to gain access to unsecured money

[Yankeeman07]

While the controlled News Media from NY & D.C and of course the Cuomo Sitcom we have everyday,
ponder these numbers as of April 27, 2020

USA Population 320,000,000 (Estimated) add 45 to 50 Million Illegals
Total Confirmed Cases 972,967
Total Tragic Deaths - 55,118 = 5.3826171875e-13% of the population and we allowed
the so-called experts to shut down a $19,000,000,000,000 economy

Gives a person reason to ponder what and why the talking heads are blasting over the controlled news media 24/7.

[Kevin Henry-Seacoast]

While the controlled News Media from NY & D.C and of course the Cuomo Sitcom we have everyday,
ponder these numbers as of April 27, 2020

USA Population 320,000,000 (Estimated) add 45 to 50 Million Illegals
Total Confirmed Cases 972,967
Total Tragic Deaths - 55,118 = 5.3826171875e-13% of the population and we allowed
the so-called experts to shut down a $19,000,000,000,000 economy

Gives a person reason to ponder what and why the talking heads are blasting over the controlled news media 24/7.

Confirmed cases=people that were actually tested and the test came back positive. There is about a 30% error in testing....false negatives. There are other studies done in NY with testing for anti-bodies. Of the groups tested 24% of the people had the anti-bodies, but no symptoms and were NOT tested for the virus. It is truly a damned if you do....damned it you don't scenario.

The testing for the actual virus done to date is less than 1% of the entire population of the US. Of which, a bunch were false negatives. At the rate of testing today, it would take a full year to test less than 10% of the population. We should have switched to anti-body testing weeks ago....deep and hard. If and when the testing for anti-bodies begins, you will get a true number on how many actually had the virus.

[abfunders]

A cure, not a vaccine will change the narrative. I am not taking no dam vaccine that's for sure.

Um, may I ask, why would a vaccine NOT change the narrative?
I'm one of the biggest pro-vaccine people out there, let's not get into the reason why the pseudo-science of anti-vaccines are so stupid, but a vaccine certainly helps even if some isolated idiots don't take them and don't trust anyone.
But that is my question - why would it NOT change the narrative?

[fundingsmbs]

CBS did a poll with a margin of error of 2.5 pts**

If a stay at home were to be lifted would the consumer be comfortable going to a bar or restaurant: 71% said no. get on an airplane: 85% said no. go to a large event: 87% said no. so even as states slowly open up business, the general population is not confident in the current pandemic safety

one thing that can be learned from this and 2008 era when funders went under and brokers closed shop, don't rely solely on MCA for a living. This business always has ups and downs and some funders even in ok times have folded. Arm yourself with other products and services and never rely on one income stream.

[Kevin Henry-Seacoast]

Um, may I ask, why would a vaccine NOT change the narrative?
I'm one of the biggest pro-vaccine people out there, let's not get into the reason why the pseudo-science of vaccines are so stupid, but a vaccine certainly helps even if some isolated idiots don't take them and don't trust anyone.
But that is my question - why would it NOT change the narrative?

The challenge with a vaccine: There is no Covid vaccine on the market. The current strain could mutate next year. There have been other variations of this virus. If they can develop one and stay onto of the virus changes....I will be taking it>