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  1. #1
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    High balances

    I have a merchant who is a security company. His revenues are $126,000 March with $28602 month ending balance. $83950 April with $49817 month ending balance. May $107,000 with $6141 month ending balance. Those are true deposits. Has 3 positions. $94,000. $48,000 and $44000. He seems way overleveraged, but he keeps getting funded, so there has to be room for something. A little capital, or a reverse, or both would work. Can anyone do?

  2. #2
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    SBA Bolt? Term loan? SBA Express? Hard money property loan? Personal loan? I realize you all are familiar with MCA's and maybe why not consider looking at alternatives?
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  3. #3
    Quote Originally Posted by Olderguy View Post
    SBA Bolt? Term loan? SBA Express? Hard money property loan? Personal loan? I realize you all are familiar with MCA's and maybe why not consider looking at alternatives?

    Why do you always say stuff like this?

    People are in the business of making money and feeding their families. Who is actually gonna sit there and work out and sba express or bolt for an 100K merchant with three pos…fund the 4th or move on

  4. #4
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Quote Originally Posted by BigDogFinancing View Post
    Why do you always say stuff like this?

    People are in the business of making money and feeding their families. Who is actually gonna sit there and work out and sba express or bolt for an 100K merchant with three pos…fund the 4th or move on
    Because you're not looking out for the best interests of the client, you are looking for how to make the most money for yourself and there is no future in that. You should be looking for both....

    Anybody that needs more than 2 positions, needs professional financial help to run their business and none of you here has that experience. We have that experience to get them out of these MCA products and into better options for their business. All of you here should be looking to do the same if you expect to survive.

    The future of this country is helping people how to thrive, not pushing them into financial instruments out of greed and their inability to operate their businesses in a financially prudent manner.
    Last edited by Olderguy; 06-04-2023 at 10:26 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  5. #5
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    Yes, but we are BROKERS and not FIDUCIARIES.
    Our goal is creating the appropriate match between what the client wants and what exists.
    Even at a bank they don't offer MCAs, and they just throw out the files that don't match.
    Occasionally they have a referral relationship, but mostly they just toss them. MCA brokers aren't wrong for doing it, either. It's a business model. I don't disagree with your approach, however being a Loan Officer and "trusted partner", but if I'm not selling hardware, don't come to my grocery store expecting to buy a light switch. However, if you want to buy a can of beans, I'll sell it to you. Don't come to me for a loan on a private home, I am not licensed. Don't come to be for 1 point on an SBA, I have a sales floor that needs money faster, otherwise we wouldn't be in business.
    Don't get upset at Ondeck that they aren't offering SBAs.

    The problem IMHO is when brokers get greedy and convince they to take a financial instrument they shouldn't take, especially if it's a bait and switch. However, how many times do they come to me for X, I recommended credit repair and SBA, and over the next month they take on another 2 positions (they needed money quick and someone else offered it!) and I was left with ZERO money?

    There's a balance here. And you can't make money if you're not diversified.

    @k lion, I have a program, shoot me an email, its awesome and it works and it pays wonderfully, and this client, assuming his business credit is excellent, would be a good fit.

  6. #6
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    ChatGPT made a really nice story that it called Loan Brokers vs. Fiduciaries
    (Don't worry, I asked ChatGPT to make it an interesting read and it really did a good job!)
    https://chat.openai.com/share/c25d4f...b-c72987a0de97

  7. #7
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Actually that's pretty funny even though it's completely false. Brokers should be looking out for what is in the best interests of their clients. BROKERS and not FIDUCIARIES? That is an excuse to sell high commission MCA's to people because is makes you money, not because it is in the best interest of the clients. Nobody on his site has the skills to take care of clients the way they should/could be handled. Getting professional support both financial and organizational for these people is not fiduciary. It's professional business.

    Micah - one other thing you are missing. When this industry get regulated. And when they devise a test like the nmls, and when licensing is required, and an ethical declaration is demanded, almost all of you will fail because you will be required to perform in a way that is in the best interests of the client.

    I went through that in the mortgage industry and 95% of the brokers went out of business. The same wll happen in this industry. Expand your offerings, grow or die.
    Last edited by Olderguy; 06-05-2023 at 12:44 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  8. #8
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    Insurance brokers that you are referring to and loan brokers are completely different entities. Completely different experiences. As a broker I have the right to steer them towards the product that I want them to buy. If I wanted to be a fiduciary, I would look for a CFO job. If I'm only allowed to make 1% on any loan that I ever do you never charge a fee agreement, what are the small businesses going to do? I can't afford to make $500 on a $5,000 loan, I can't afford to make $5,000 on a $500,000 loan. I would go out of business. That's why 95% of them go out of business.

    I don't deny that creating ethical boundaries is important, and yes we are playing with people's lives much more than used car salesman is and the person selling the useless piece of plastic widget, however if the regulation forces me to only sell particular types of loans, then small businesses don't stand a chance. There's a reason why the alternative lending industry exists and it's not in the bank world. Debanked is a thing. There's nobody that can help them. Even in California with all of its wacky paternal laws don't forbid a broker from making a lot of money with an MCA as long as they are licensed. Maybe they will need to pass a test, and they will revoke their license once they do fraud, that doesn't change the fact that there's a significant aspect of sales for a broker that does the fiduciary should not.

    I've said this many times in this form I believe it's true still, that a broker is like a matchmaker. Well we want the match to work and to get the best match for them and then be happy with us, at the end of the day if all they're looking for is something that I think doesn't make sense, I am not their father, and I am not their financial advisor, I'm not their lawyer, and I do not even play one on TV. I know people who have money who want to give it out, and I know people who need money, and I make the best experience possible, and get paid when the match is consummated.

  9. #9
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Not referring to insurance brokers,was using licensed nmls mortggae brokers as an example. It was a greedy messed up industry like the MCA world is today. Regulation cleaned it up. Was saying the same think will probably happen to the MCA world.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  10. #10
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    Quote Originally Posted by Olderguy View Post
    Not referring to insurance brokers,was using licensed nmls mortggae brokers as an example. It was a greedy messed up industry like the MCA world is today. Regulation cleaned it up. Was saying the same think will probably happen to the MCA world.
    Yeah, but it won't end MCAs. Nor should it. You're avoiding the criticism I made against you again: MCAs aren't inherently bad, and there's nothing inherently wrong with only offering them, either from the broker side or from the lender/funder side. Most people here are intelligent and can/will be able to learn and will pass a test if we're forced to. This is not something you need to spend 4 years in high-level classes and residency to understand.

    It's NOT a good idea to insult and claims that "NOBODY" has skills. "Nobody on his site has the skills to take care of clients the way they should/could be handled. " ?!?!?!?!?!?!?!?!

    That's literally insulting the entire community!!! When you spend your days posting requesting for co-brokers. all that's needed is someone a bit less haughty and a bit less presumptuous, and they'll take over your SBA/RE co-brokering in minute. I'm 100% certain that there are people here who have scenarios that they refuse to send to you because they're insulted by your early-morning posts.

  11. #11
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Come on bro.....how many brokers call and ask "how many points can I get"? And how big of a PFS can I charge in addition to the SBA fees? There are few people who can help a company with a financial and operational analysis to get their business out of a MCA into something better. All I am suggesting is take a look at the bigger picture. I deal with brokers and merchants every day who are in trouble and need financial help to run their business. Many agree and take us up on that offer. Most don't get it. If people are insulted because I try and suggest a better loan for their client, the broker complains he needs to feed his family so he needs to push a client with an expensive MCA so he can make money, not because it is best for the client.
    Last edited by Olderguy; 06-05-2023 at 08:52 AM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  12. #12
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    Quote Originally Posted by Olderguy View Post
    Come on bro.....how many brokers call and ask "how many points can I get"? And how big of a PFS can I charge in addition to the SBA fees? There are few people who can help a company with a financial and operational analysis to get their business out of a MCA into something better. All I am suggesting is take a look at the bigger picture. I deal with brokers and merchants every day who are in trouble and need financial help to run their business. Many agree and take us up on that offer. Most don't get it. If people are insulted because I try and suggest a better loan for their client, the broker complains he needs to feed his family so he needs to push a client with an expensive MCA so he can make money, not because it is best for the client.
    I get that all the time also. "I'm not doing less than 5 points." "I need at least 3 points up front even if there are residuals." I know it. However, you said "NOBODY" has the skills and that's what's insulting (you modified it to "all I'm suggesting" and "a few people" in this last post). Many are not (yet) familiar with the products and they start in MCA and branch out. I personally have been co-brokering for a lot of years, and eventually most of them learn how to do what I've been doing, or they graduate to other realms of finance, so we're always left looking for more newbies. Personally I'm involving myself with a completely different type of lending that's paying a whole lot better and merchants LOVE it, and it's for people that are passed SBAs, LOCs and MCAs, specifically designed to enable these clients have to monthly payments, but without all of the "noise" of long underwriting. So I'm moving "down wind" so to speak to service these clients. EVERY part of the ecosystem deserves to have good service, it's just hard sometimes to find them.

  13. #13
    Sounds like it may be worth a try - call me - Jodi Levy, BizFun Canada, 416-892-1600 or email jodi.l@bizfund.ca AND/OR jodilevy123@gmail.com

  14. #14
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    Quote Originally Posted by Olderguy View Post
    Because you're not looking out for the best interests of the client, you are looking for how to make the most money for yourself and there is no future in that. You should be looking for both....

    Anybody that needs more than 2 positions, needs professional financial help to run their business and none of you here has that experience. We have that experience to get them out of these MCA products and into better options for their business. All of you here should be looking to do the same if you expect to survive.

    The future of this country is helping people how to thrive, not pushing them into financial instruments out of greed and their inability to operate their businesses in a financially prudent manner.
    Come on, you are just trying to get people to submit to you for your split. Let us know when you open up a non profit or are ok with a 5% split instead of 50%.

  15. #15
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Quote Originally Posted by RickyR3712 View Post
    Come on, you are just trying to get people to submit to you for your split. Let us know when you open up a non profit or are ok with a 5% split instead of 50%.
    Sure I'd be glad to pay you just a 5% split. You clearly are just trying to be antagonizing and good luck finding someone who is experienced to work with these situations.
    Last edited by Olderguy; 06-05-2023 at 04:45 PM.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  16. #16
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    Quote Originally Posted by Olderguy View Post
    Sure I'd be glad to pay you just a 5% split. You clearly are just trying to be antagonizing and good luck finding someone who is experienced to work with these situations.
    Ricky, let me know if you want to work a deal ;-)

  17. #17
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    Quote Originally Posted by Olderguy View Post
    Sure I'd be glad to pay you just a 5% split. You clearly are just trying to be antagonizing and good luck finding someone who is experienced to work with these situations.
    You got the point we are all doing this for the money, including you.

  18. #18
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Ignored.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  19. #19
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    Quote Originally Posted by Olderguy View Post
    Ignored.
    What I think you mean is "cancelled"

  20. #20
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    Quote Originally Posted by BigDogFinancing View Post
    Why do you always say stuff like this?

    People are in the business of making money and feeding their families. Who is actually gonna sit there and work out and sba express or bolt for an 100K merchant with three pos…fund the 4th or move on
    because a 4th puts this guy out of business and at some point "what is good for the merchant" has to be the focus not how can you make a couple extra bucks
    John Celifarco
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  21. #21
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    The reason they just "get a 4th" is because they are part of the 99 out of the 100 businesses who won't qualify for anything else. How many 700+ credit scores do you come across that have 4 positions? How savvy of a business owner do you have to be to take out 4 positions? You think they own their home free and clear? You're on an MCA forum trying to pick deals out of the line that is going to the chopping block. You are much better spending this energy at the local banks trying to get their declines. Time is the most valuable thing that we all have.

    Sure I'm always game to try and help someone out of the cycle of death(4 positions) but lets be real here...its a 1 out of 100 game. Maybe more. And this is coming from another person who is fully capable of processing any of those types of programs you mentioned. And we make good money doing so. Along with MCA.

  22. #22
    Senior Member Reputation points: 66298 Olderguy's Avatar
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    Quote Originally Posted by brandon_ View Post
    The reason they just "get a 4th" is because they are part of the 99 out of the 100 businesses who won't qualify for anything else.
    That's because most brokers probably just peddle MCA's to make money and push a guy when he's down, aside from your comment to do otherwise.. A merchant should be reviewing his financial situation and thinking about better options when he gets his first MCA. That's what should happen and probably will happen when this industry gets regulated.
    Steve Benjamin
    Professional Business Loans

    1012 Contessa
    Irvine, CA 92620
    steveprobiz@gmail.com
    https://probizloans.net/
    Broker, Underwriter, general business loan expert
    949.228.1050


    @ 24 hour funding working capital loans
    @ Term loans from 3 years to 10 years at 9.5% and up
    @ Equipment financing up to 7 years
    @ Property loans - Hard Money and traditional - Primary, Investment, commercial, land, fix and flip, construction.
    @ SBA loans - 7A and 504.
    @ Private money equity and debt for major investments
    @ Personal Loans up to gross income from personal tax return.

  23. #23
    Quote Originally Posted by Olderguy View Post
    That's because most brokers probably just peddle MCA's to make money and push a guy when he's down, aside from your comment to do otherwise.. A merchant should be reviewing his financial situation and thinking about better options when he gets his first MCA. That's what should happen and probably will happen when this industry gets regulated.
    I reject the notion that merchants only take MCAs when they're desperate, uninformed, or can't qualify for anything else. Speed, structure, frequently no liens... they're are several reasons why an MCA might work better than less expensive forms of financing. If a broker chooses to only offer cash advances that's their prerogative and they shouldn't be shamed for it if they're being honest about it. If they're baiting with fake lines of credit and other nonsense that's a different story, but otherwise there's nothing unethical about selling this product and it's odd that you insist that it is (here of all places).

  24. #24
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    Quote Originally Posted by OC Funder View Post
    I reject the notion that merchants only take MCAs when they're desperate, uninformed, or can't qualify for anything else. Speed, structure, frequently no liens... they're are several reasons why an MCA might work better than less expensive forms of financing. If a broker chooses to only offer cash advances that's their prerogative and they shouldn't be shamed for it if they're being honest about it. If they're baiting with fake lines of credit and other nonsense that's a different story, but otherwise there's nothing unethical about selling this product and it's odd that you insist that it is (here of all places).
    fully agree with this

  25. #25
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    Quote Originally Posted by Olderguy View Post
    That's because most brokers probably just peddle MCA's to make money and push a guy when he's down, aside from your comment to do otherwise.. A merchant should be reviewing his financial situation and thinking about better options when he gets his first MCA. That's what should happen and probably will happen when this industry gets regulated.
    You do realize that a vast majority of business owners are financially illiterate but NOT dumb. I own a fractional CFO company as well & most owners just do not get it. Regulation is not going to fix that side of it. Aside from fraud, most owners know exactly what they are doing. They believe that their inconsistent revenue is temporary, covid effects are temporary, costs are going to go down, their profit margin is higher, or a heavy chunk of A/R is going to get paid out in 45 days, etc.

    What happens when they are wrong? Cash flow is crushed and they need to take another advance or loan. This process repeats until you have an extremely overleveraged individual.
    Look at all the high-risk industries and see what they have in common

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