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  1. #1

    Question What Prepayment Incentives are everyone doing these days?

    It seems like half of the deals I fund, the merchants are inquiring about our prepayment incentives. It always makes me laugh inside since it's super rare that anybody ever pays off early anyway, but I was just curious what Prepayment Incentives are everyone doing these days?

  2. #2
    We provide an aggressive prepayment discount schedule. Terms go out to 36 months, bi-weekly payments available, we offer equipment financing as well. Shoot me a DM to connect

  3. #3
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    Quote Originally Posted by TheUnderwritingProdigy View Post
    It seems like half of the deals I fund, the merchants are inquiring about our prepayment incentives. It always makes me laugh inside since it's super rare that anybody ever pays off early anyway, but I was just curious what Prepayment Incentives are everyone doing these days?
    Our standard pre pay discount if the merchant asks is 10% off the interest in the first 30 days then 5% off in 31 to 60 days after funding. So nothing crazy. I agree it is rare that a merchant pays off early but it's a good sign if they are asking those sort of questions.
    Eric Christensen
    ISO Relationship Manager
    Torro

    eric.christensen@torro.com
    (801)-441-7958

  4. #4
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    I have done some extremely aggressive Early pay options on certain deals.
    Im referring to much more than the standard 10% off in 30 days and 5% off in 60 days.

    I have some merchants that pay me off every 30 days and take a new advance since the pay off discount is so strong

  5. #5
    Quote Originally Posted by TheUnderwritingProdigy View Post
    It seems like half of the deals I fund, the merchants are inquiring about our prepayment incentives. It always makes me laugh inside since it's super rare that anybody ever pays off early anyway, but I was just curious what Prepayment Incentives are everyone doing these days?
    I’ve done early pays where we get merchants to 1.09 in short term deals. Otherwise 10-15% or more is no issue. Never understood why people do less discount after 30 days if the discount is on the current balance at the time of payoff.

    But either way feel free to message me.

  6. #6
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    Our typical early pay is -

    Days 1 - 30, 12%
    Days 31 - 60, 8%
    Days 61 - 90, 4%

    We can get more aggressive, if needed.
    Jeff Pecori
    Business Development & ISO Relations

    VitalCap Fund | 48 Wall St. | New York, NY 10005
    P. 850.630.7509 Ext.101 | F. 646.219.7949
    jeff@vitalcapfund.com

  7. #7
    Quote Originally Posted by Akanner View Post
    I have done some extremely aggressive Early pay options on certain deals.
    Im referring to much more than the standard 10% off in 30 days and 5% off in 60 days.

    I have some merchants that pay me off every 30 days and take a new advance since the pay off discount is so strong
    Do you do it on remaining balance, funded amount, or payback amount?

  8. #8
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    Quote Originally Posted by TheUnderwritingProdigy View Post
    Do you do it on remaining balance, funded amount, or payback amount?
    Usually, i put a discount on the payback/factor rate as an early pay option in the contract.

    If a merchant calls shortly after getting funded and wants to pay off with a slight discount, i take it off remaining balance

  9. #9
    We offer up to 15 months on A paper MCA submissions and 24 months on Term Loan submissions. Very aggressive buyback addendum's as well. Feel free to reach out for additional information.
    Benjamin Lugassy
    SOS Capital
    blugassy@soscapital.com
    P:212-235-5462
    F:212-235-5459
    www.soscapital.com

  10. #10
    Quote Originally Posted by TheUnderwritingProdigy View Post
    It seems like half of the deals I fund, the merchants are inquiring about our prepayment incentives. It always makes me laugh inside since it's super rare that anybody ever pays off early anyway, but I was just curious what Prepayment Incentives are everyone doing these days?
    My team at Select Funding has engineered what we are calling “The Advantage Program”. It's a true, no prepayment penalty program that offers the merchant the ability to prepay the contract at any time and get all unpaid factor charges forgiven. We’ll pay up to 6 points initially on the program and will release additional commission if/when the contract goes to term. Check out this quick explainer video -



    Feel free to reach me directly for more on this program.


    Pooja Nene
    Business Development
    (818) 292-0604
    pooja@selectfunding.com

  11. #11
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    UFS standard discount is 10-12% if paid in 30 days and 5-7% if paid in 60

    we will do prepays as low as 1.13 on select deals

    side note a lot of companies will offer prepays but not if another Company is paying them off ( we will always offer it)
    Irving Winograd
    Unique Funding Solutions
    646-460-3139

  12. #12
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    Fox has some creative EPO's, Daniel got me a 1.12 within 30 days on 125k. Every deal is case by case, But it's how you can work it out with the merchant.

  13. #13
    Senior Member Reputation points: 30475 Zach's Avatar
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    Quote Originally Posted by Pooja Nene View Post
    My team at Select Funding has engineered what we are calling “The Advantage Program”. It's a true, no prepayment penalty program that offers the merchant the ability to prepay the contract at any time and get all unpaid factor charges forgiven. We’ll pay up to 6 points initially on the program and will release additional commission if/when the contract goes to term. Check out this quick explainer video -



    Feel free to reach me directly for more on this program.


    Pooja Nene
    Business Development
    (818) 292-0604
    pooja@selectfunding.com
    I beat out other brokers every day with this program. Can't beat a ~1.03 for 1 month prepay, not even close.
    Zachary Ramirez – CEO
    Phone: 562-391-7099
    Email: zach@zacharyjosephramirez.com

    1661 N. Raymond Ave #265
    Anaheim CA 92801

  14. #14
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    most merchant's never prepay early and several contracts forbid other funder's from paying it off to get the discount. How would they pay 6 points on a 1.03/30 day payoff? The broker would make more than the company.

  15. #15
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    Anyone that's asking about early pay is a strong file and as a funder, I would fight really hard to win that deal.... feel free to reach out zalman@askzalman.com

  16. #16
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    Quote Originally Posted by Zach View Post
    I beat out other brokers every day with this program. Can't beat a ~1.03 for 1 month prepay, not even close.
    Zach and Pooja, from my understanding / conjecture, the reason why nobody else does this is because to put capital at risk for low ROI on the investors side.
    Something tells me that almost no merchant ever takes this option, so there's no reason why not to offer?
    I'd love some insight into the understanding here.

  17. #17
    Quote Originally Posted by abfunders View Post
    Zach and Pooja, from my understanding / conjecture, the reason why nobody else does this is because to put capital at risk for low ROI on the investors side.
    Something tells me that almost no merchant ever takes this option, so there's no reason why not to offer?
    I'd love some insight into the understanding here.
    Hey Micah,

    Absolutely! The math isn’t quite “almost no merchant” pays off early but it is a lot less that suggest they will in the sales process. We want to provide to a product that a merchant can say “yes” to.

    We’ve taken some losses on the program already after paying an ISO 6 points and the merchant paying us off after a large receivable comes in or inventory flips quickly after 3 or 4 payments. We will never ask for the 6 points back and will pay more if/when the deal goes to term (and most will).

    I don’t know of a better prepay option in the market but know it is getting us market share.

  18. #18
    Quote Originally Posted by Zach View Post
    I beat out other brokers every day with this program. Can't beat a ~1.03 for 1 month prepay, not even close.
    This is extremely interesting. What do the offers look like overall? Is it a 1.03 1 month prepay but a 1.49 over 6 months? Not familiar with Select Funding but this has my attention...
    Adam Wines
    Holloway Funding Group
    www.gohfg.com
    Processing@gohfg.com

  19. #19
    My team at Select Funding has engineered what we are calling “The Advantage Program”. It's a true, no prepayment penalty program that offers the merchant the ability to prepay the contract at any time and get all unpaid factor charges forgiven. We’ll pay up to 6 points initially on the program and will release additional commission if/when the contract goes to term. Check out this quick explainer video -

    https://www.youtube.com/watch?v=iqAjNPMll4Y

    Lets add this program to your tool belt!

    Dakota Cooley
    818-928-3957
    Dakota@selectfunding.com
    https://www.linkedin.com/in/dakota-cooley-a6997554

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