Results 1 to 25 of 35
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05-21-2021, 12:16 AM #1
- Join Date
- Jun 2020
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- 34
Last Chance Funding Suing for Clawbacks
Anyone notice that LCF filed clawback lawsuits vs 9 iso shops this month
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05-21-2021, 12:31 AM #2
- Join Date
- Dec 2016
- Posts
- 379
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05-21-2021, 07:27 AM #3
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- Jun 2015
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- 3,325
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05-21-2021, 07:29 AM #4
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- Jun 2015
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- 3,325
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05-21-2021, 08:42 AM #5
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- Dec 2016
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- 379
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05-21-2021, 09:23 AM #6
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- Mar 2019
- Posts
- 105
I agree with this entirely. Even though it goes against my personal interests the incentives are totally misaligned in this industry and most brokers could quite literally could not care less about the merchant many times and will stack em till there cooked. If you are syndicating your deals you should be getting paid out as the deal pays in my opinion. If you are syndicating you should get more leeway about getting paid commission upfront.
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05-21-2021, 09:46 AM #7
- Join Date
- Nov 2018
- Posts
- 30
those are some petty ass 3k lawsuits. just take the L and move
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05-21-2021, 11:26 AM #8
- Join Date
- Jun 2019
- Posts
- 44
Really? So I paid for the lead, sold the lead, closed the lead and on top of that I should be responsible for them paying it back? If another ISO ends up funding this merchant and over leverages them Im supposed to be responsible for that? Should we show up every day to the place of business to make sure things are running smooth too? Pay me upfront, sorry not sorry
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05-21-2021, 12:07 PM #9
- Join Date
- Nov 2013
- Posts
- 598
I feel your pain but its the same if not worse for the funder at least monetarily. They paid for the marketing, processed and funded it.
I do think the A/R should be aligned with a higher commission payout and frequency, for example get paid 10% on RTR not principle. Get paid weekly on it as funder collects. This way you get residuals and higher profit margins. Interests are also aligned as collections are in everyones interest.
Reverse Funding companies like GFE do this, I personally like it and it has no clawback.
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05-21-2021, 12:26 PM #10
anyone who was around back in 07, 08, 09, know this is how most companies paid commissions. 6/4 - 7/3 or some other combination of upfront and residuals. Back then as a sales guy I loved the residuals that basically became your salary a set amount you could count on every month and up front commission was the bonus. It always surprised me that as stacking became more prevalent in the industry that more companies didnt try to go back to this form of commission.
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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05-21-2021, 12:32 PM #11
- Join Date
- Mar 2019
- Posts
- 254
EPIC ADVANCE
Mark@epic-advance.com
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05-21-2021, 12:38 PM #12
- Join Date
- Jul 2017
- Posts
- 130
Our original commissioning approach at AdvanceMe (later CAN Capital) was a decent upfront of 5-8% of the Funded amount, plus an additional 4-6% Residual on the RTR as it came in. It let the good ISO's build a book of Residuals they could draw on when they hit a cold spell, and protected the Funder as well. ISO's got paid similarly on Renewals. The move to 100% upfront commissions has been one of the de-stabilizing changes in the MCA industry
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05-21-2021, 01:39 PM #13
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- Jun 2018
- Posts
- 6
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05-21-2021, 02:18 PM #14
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- Jun 2015
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- 754
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05-21-2021, 02:28 PM #15
- Join Date
- May 2014
- Location
- California
- Posts
- 347
I agree with First Us.
There are no guarantees in life.
F@%k claw backs.
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05-21-2021, 05:24 PM #16
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- Jun 2019
- Posts
- 44
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05-24-2021, 08:34 AM #17
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05-24-2021, 09:51 AM #18
- Join Date
- Jan 2018
- Posts
- 519
someone owes 31k oof.... also why would you spend 31k before 30 days go by? I used to wait 30 days if commission was 5k+.
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05-24-2021, 10:16 AM #19
- Join Date
- Feb 2017
- Posts
- 3,433
A deal I worked not long ago: A broker double-funded with Credibly followed by a stack from Forward (same day, clearly the Forward stack was done with Credibly's knowledge). $300k+$150k. I only found out about Credibly because of UCC search the day before funding with what I thought was a 1st position. We were working with Fox to get a second before we found out that the 2nd position was funded (upon bank login). The client said, "So why can't I just get both fundings?" I responded, "Because that's fraud." So we were trying for a 3rd quick stack as well for $80k, but the client was weird, ready for funding call, never was around her non-English speaking husband, so the funder put it on the side for a few days, and eventually felt something was wrong and killed it, which I was happy about. We and funder tried calling a few days later, and the phone line was disconnected.
I feel bad for the other broker who worked so hard..... they were clearly going to get their commission clawed back. $45,000+.
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05-24-2021, 11:19 AM #20
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- Jun 2015
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- 3,325
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05-24-2021, 12:25 PM #21
- Join Date
- Jun 2017
- Posts
- 2,049
LCF is pretty forgiving when it comes to Clawbacks.
Some companies will rip a Clawback out of your account at one missed payment. Even if they then makeup the payment, its already ripped out of your account, and you have to fight to get paid again.
LCF was always reasonable, especially if you try and get the merchant back on track, they hold off taking clawback until the deal is absolutely 100% bad, and even then give you the option to pay it out of future comissions.
They want their money, the deals went bad within 30 days. Thats just how it is.
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05-24-2021, 03:19 PM #22
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05-25-2021, 10:17 AM #23John 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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05-25-2021, 03:43 PM #24
- Join Date
- Jul 2014
- Posts
- 92
15 years ago the marketing expenditure per funded deal shouldn't have been more than a couple hundred dollars... now there's shops spending thousands. I think the residual model is great but it will choke out newer and poorly financed ISOs (some can argue that's a good thing).
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05-25-2021, 05:13 PM #25
- Join Date
- Nov 2013
- Posts
- 598
Other industries like CC processing, Insurance brokers etc live off residuals, its not uncommon. Just like any small business, If you dont have enough resources to survive first 3-6 months then you are not ready to fly solo.
Keeps the MCA industry honest. Besides, if its off RTR you are essentially a syndicate partner and you have more upside long term. Its win / win. Especially if they renew or payoff early, are you going to be mad at the money?
Thinning out the ISO crowd is good for the industry, long term.
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