Results 1 to 12 of 12
-
10-22-2014, 11:34 AM #1
Can A Company Lose Money When It Charges A 50% Interest Rate?
-
10-22-2014, 11:57 AM #2
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
Very good article. 100% accurate.
-
10-22-2014, 12:05 PM #3
-
10-22-2014, 02:57 PM #4
Really a great article breaking down the numbers/details of what's involved in this industry which seems all roses. There is a risk adjusted approach to these numbers that are factored into the discount rates, which in many cases the media exploits negatively.
Cheers to Marc Prosser of Forbes for pointing out there are many thorns with these roses.
-
10-22-2014, 03:02 PM #5
- Join Date
- Jan 2013
- Location
- New York City
- Posts
- 409
50 (Per)cent is Gangsta
This Forbes Article seems to be incomplete.
You absolutely can lose money while lending money at 50% interest, but I'm not sure if losing money at 50% interest (on average 6 month turns) is actually something that you can easily do... I mean you would have to actually try...
Our very rudimentary model available for download by clicking here shows that you just about break even at 50 percent - 6 month turn - 33 percent default rate.
For this model, we classify a default as an event where the money goes out the door, and a net $0 is collected to pay back the deal (not common). Playing with the values in row two gets you some sort of gauge as to how a guys portfolio performs based on those values. We'll turn this into a mini "web app" (Buynance loves calculators) to supplement my next eBook(let).
I hope the writer completes the piece.
-
10-22-2014, 03:26 PM #6
- Join Date
- Jan 2013
- Location
- New York City
- Posts
- 409
Posted my thread before seeing this one. Sorry. Feel free to merge.
Also - I think the writer doesn't quite understand that ISO driven shops struggle to be efficient.
That leads to a waste of time. Time is money. This can be quantified. Just our preliminary calculations are enough to make you sit up in your chair. The industry can do better.Last edited by JayBallentine; 10-22-2014 at 03:38 PM.
-
10-22-2014, 03:41 PM #7
- Join Date
- Oct 2013
- Location
- Designer
- Posts
- 597
"Those dastardly middlemen currently weighing down returns for alternative lenders...."
Where's Jay Ballentine when you need him....?!!!!!
-
10-22-2014, 03:41 PM #8
- Join Date
- Oct 2013
- Location
- Designer
- Posts
- 597
I apologize Jay, that was uncalled for, but I couldn't resist .....
-
10-22-2014, 04:00 PM #9
- Join Date
- Jan 2013
- Location
- New York City
- Posts
- 409
No worries. We're shipping a slew of very basic; time saving services for brokers next year. First of which will allow you to remain 100% anonymous in finding out if you're competing against 88 brokers for the same file. Enough is enough. We're going to put up or shut up.
-
10-22-2014, 04:02 PM #10
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
-
10-22-2014, 04:14 PM #11
- Join Date
- Jan 2013
- Location
- New York City
- Posts
- 409
The fact that you have to make that assumption lends credence to the fact that the article is incomplete.
-
10-22-2014, 04:45 PM #12
People are often shocked at the cost of a MCA but they never look under the hood and realize these are very high risk advances/loans and they need to have the risk priced into the cost
Similar Threads
-
US BASED COMPANY....does business and has money in Mexican Bank
By JSL23 in forum Deal BinReplies: 7Last Post: 10-06-2014, 11:32 AM -
Floor Rate?
By fundgorilla in forum Merchant Cash AdvanceReplies: 28Last Post: 08-29-2014, 05:22 PM -
Interest paid on an Unsecured Business Loan is an ordinary business expense...
By SBF in forum Business LoansReplies: 6Last Post: 05-29-2014, 07:52 PM -
Central banks can’t even predict the interest rates they control
By CO1 in forum Merchant Cash AdvanceReplies: 0Last Post: 03-11-2014, 10:23 AM -
FUNDERS: Does this interest you at all?
By JayBallentine in forum Merchant Cash AdvanceReplies: 0Last Post: 12-02-2013, 07:26 PM