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04-25-2020, 04:47 PM #1
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The problem With MCA After Opening For Business
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?
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04-25-2020, 05:07 PM #2
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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
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04-26-2020, 12:15 PM #3
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04-26-2020, 07:59 PM #4
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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.
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04-27-2020, 02:26 PM #5
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04-27-2020, 05:49 PM #6
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04-25-2020, 07:14 PM #7
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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.
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04-25-2020, 09:20 PM #8
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Last edited by Michael I; 04-26-2020 at 12:14 AM.
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04-26-2020, 07:24 AM #9
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- Mar 2014
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- Florida
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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"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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04-26-2020, 09:34 AM #10
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04-27-2020, 11:01 AM #11
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- Oct 2019
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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
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04-27-2020, 11:05 AM #12
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- Boynton Beach
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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.
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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04-27-2020, 11:34 AM #13
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.
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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04-27-2020, 11:39 AM #14
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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.
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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04-27-2020, 11:43 AM #15John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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04-27-2020, 02:29 PM #16
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- Apr 2020
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04-27-2020, 03:49 PM #17
I dont think they should wait around till next year that is crazy but when they do decide to open it needs to be with a clear understanding of where they are located and the mentality of their customers. Opening for the sake of opening and doing no business will hurt more than help. All I am saying is an extra couple of weeks now then opening and being busy is better than opening now and having no customers
Think about a restaurant, they buy food expecting to do business when they open and use whatever extra cash they have to buy it. They open, do no business, food doesnt get sold. By the time people are comfortable and ready to go out in a week or 2 they dont have the money they need to buy more food. Yes I am looking at the worst case scenario but this will happen on some level to any business that opens before their customers are ready to go back to normal spending and behaviorJohn Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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04-27-2020, 01:02 PM #18
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- Sep 2019
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- 402
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.
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04-27-2020, 02:32 PM #19
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- Oct 2019
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- 48
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.
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04-27-2020, 02:47 PM #20
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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?Last edited by abfunders; 04-27-2020 at 04:03 PM.
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04-27-2020, 02:54 PM #21
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- Boynton Beach
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Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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04-27-2020, 04:08 PM #22
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- Feb 2017
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Funny. As you were posting this, I was on the phone with a client who was looking for a real estate loan who happens to a family doctor and an army reservist. I asked him about the mutations, here's what came out:
1) His sources (he was talking in context of the army reserves) have documented that it leaked from a Chinese lab, it did not transfer from a bat. That's the main reason why China didn't talk about it for the first 3 weeks, they didn't want anyone there doing research about it. (I'm reporting, I'm not pushing.)
2) It mutated a little bit immediately once it got from China to the US, and they were expecting a lot more since then. It suddenly stopped mutating. Mutation for next year is a complete unknown.
3) If mutations stopped, a lot more people have likely been exposed to it than we realize, in which case we might already have achieved herd immunity.
4) Vaccines work (duh) and will make further immunity
So, basically, we just have to wait it out. It could be that next year we have no more problems, maybe not.
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04-27-2020, 10:07 PM #23
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- Oct 2019
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- 48
Its seem since Vice President pence announced that the Federal Government would pay hospitals for any Covid19 related illnesses or deaths the WHO CODE U07.2 was used on patients and deaths pretty generously by hospitals bypassing insurance company and getting funded emediatly from the Fed Gvt.
Emergency use ICD codes for COVID-19 disease outbreak
An emergency ICD-10 code of ‘U07.2 COVID-19, virus not identified’ is assigned to a clinical or epidemiological diagnosis of COVID-19 where laboratory confirmation is inconclusive or not available.
Both U07.1 and U07.2 may be used for mortality coding as cause of death. See the International guidelines for certification and classification (coding) of COVID-19 as cause of death following the link below.
Could the Corona numbers turnout to be a big scandal? Hell i don't know, but its worth to be investigated.
https://www.who.int/classifications/icd/covid19/en/
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04-27-2020, 09:57 PM #24
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04-27-2020, 02:34 PM #25
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- Apr 2020
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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
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