[Chambo]

I am new to the industry working in an ISO and have found this board invaluable in the learning curve. Thank you all. I found the video in the news letter interesting. The renewal thing has had me a little concerned from the perspective of the merchant. How was this conversation taken by those at the conference? Is this an elephant in the room?

"Double Dipping" refers to renewals for most of the industry. The merchant has pay off the remainder of their own balance with a portion of the new advance. No different than if they were moving to a different fund. TBB (MCC and BFS do it too, so it isn't original) adds on the funds instead of refinancing, or paying off the balance. Jim calls it double dipping, everyone else calls it refying.

The add on theory is really in the merchant's best interest. Some brokers ***** about it though, because the commissions aren't as fat (there's a smaller portion you are getting your commission on). These add ons are sold as credit lines. You can keep coming back every coule of months, based on the max RTR you are/were qualified for vis a vis what you have paid down. The problem with these deals though is 1) certain brokers cannot stand them because the commission is basically a fraction of what they would earn by flipping and 2) sooner or later, the Fund doesn't want to renew and keep extending the terms, so they hold off and wait for a huge chunk to get paid off.

Of course, in this market environment, that just invites stacking.