[CraaaCraaa Radio]

I have a solid merchant that I have funded many many times in the past hit me up for capital.

Industry
Healthcare Facility

Time in Business
1988

No Postions

Monthly Revenue
75k+

Funder gives approval 85k over 10 months 1.20 buy rate.

I ask for a stretch in term as merchant fico is 650+

They come back to me with 100k over 12 months at 1.32 paying 5 points to the house.

This Funder now goes to my DNC FUNDER LIST

[Robinhood21]

I have a solid merchant that I have funded many many times in the past hit me up for capital.

Industry
Healthcare Facility

Time in Business
1988

No Postions

Monthly Revenue
75k+

Funder gives approval 85k over 10 months 1.20 buy rate.

I ask for a stretch in term as merchant fico is 650+

They come back to me with 100k over 12 months at 1.32 paying 5 points to the house.

This Funder now goes to my DNC FUNDER LIST

Try kaptius they love the health care industry

[Yankeeman07]

You consider a FICO of 650+ a good credit risk?

Let's assume you could close this deal, on a $100K deal, you would earn $5K - what is your gripe?

[Ehenek]

It is simply relative Yankeeman. Why don't you the it a step further and discuss the tradelines, age f tradelines, comparable tradelines. I think the persons point would be a 650 ia better than most files.

[CraaaCraaa Radio]

You consider a FICO of 650+ a good credit risk?

Let's assume you could close this deal, on a $100K deal, you would earn $5K - what is your gripe?

why would I close the deal for 5 points at 100k...when they gave me 85k 10 months at 1.20 buy rate with a max 12 point up sell.

Are you nuts.?

I ll close the deal elsewhere.

Let's assume you can count Yankee

[kpeng]

You're asking for a longer term, the funder has to hedge their risk somehow. Increasing the factor rate to get a longer term and higher dollar amount is reasonable.

Funders have to make money too.

[TheUnderwriter]

If you are such a baller, fund it yourself. Charge a 1.20-1.30 for 100k, pull daily, weekly or monthly (most likely weekly or monthly since brokers cant sell daily to save their life lately even if merchant has 100x the daily payment amount as an average bank balance), whatever your little heart desires, and make 20-30k then. Why only make 5k or 10k?

[CraaaCraaa Radio]

You're asking for a longer term, the funder has to hedge their risk somehow. Increasing the factor rate to get a longer term and higher dollar amount is reasonable.

Funders have to make money too.

Peng so elevate gives me 85k over 10 months at a 1.20 buy rate and I ask for a term stretch and you come back wirh 100k and 12 months at 1.32 only paying 5 points.

Meanwhile I could fund the 85k at 10 months making 12 points double the commission.

so the funder built in 12 points to make 1.32 and increase 15k that I didn't ask for... and increase term by 2 months. that justifies 5 point commission on a solid file,

No I ll take it to Kapitus, Credibly, Mulligan, IOU and never use you again. And let all my iso's know to beware with the tactics used by this funder and the uw team.

if that's how you do deals Peng.. and you think it's normal....than now I understand why you really don't see alot of paper....

[kpeng]

Peng so elevate gives me 85k over 10 months at a 1.20 buy rate and I ask for a term stretch and you come back wirh 100k and 12 months at 1.32 only paying 5 points.

Meanwhile I could fund the 85k at 10 months making 12 points double the commission.

so the funder built in 12 points to make 1.32 and increase 15k that I didn't ask for... and increase term by 2 months. that justifies 5 point commission on a solid file,

No I ll take it to Kapitus, Credibly, Mulligan, IOU and never use you again. And let all my iso's know to beware with the tactics used by this funder and the uw team.

if that's how you do deals Peng.. and you think it's normal....than now I understand why you really don't see alot of paper....

I'm sorry who are you again?

[CraaaCraaa Radio]

someone who has been funding when credit card processing had to be converted first to get the advance


meaning someone who has been in the industry longer than you

[freeprocessing]

I think the point here is that they don't want the deal sold over a 1.32. A lot of funders cap the sell at a certain rate for risk purposes. They had to increase the buy rate when stretching the term which is totally normal although an increase of 3.5 a month is a little extra. Should be 1 or 2 points. You should not be upset at the situation other than the 3.5 increase in buy rate a month is excessive. What you should do is tell the funder that you want to make 12 points and you want to sell it at a 1.36 for 12 months which is more than fair. If they are strict on not selling past a 1.32, than say you want 8 points at least for the 12 month term.

[CraaaCraaa Radio]

it's either I take the 1.20 buy rate 85k at 10 months and up sell 12 points

or I take the 100k at 12 months at 1.32 points already built in by funder

paying the house 5 points.

that just doesn't sit right with me

if you can give me a buy rate at 10 months and I ask for a stretch in term. you give me 12 months and the points already built in at 1.32 d ou CA only pay the house 5 points...

ridiculous

[Michael I]

very common when funders go out of their box

[abfunders]

I've been trying to figure this point, but I think I finally did. Now I think I get it. The 1.20 over 10 was with an upsell to 1.32, paying 12. The 1.32 over 12 was really a 1.27 with an upsell of 5. Is that accurate? If so, it appears that their underwriter is very strict and they don't like doing 12 month deals, and they went out of their comfort to a different sub-fund that does 12 month deals and doesn't pay as well. Not anyone's fault, just their guidelines. Don't know why it's a "goodbye" moment, it's just that it's not their box, and you should haven taken it to IOU anyway, and you'll go to them next time. Hopefully for you that the client doesn't find a different broker to work with and get a better deal (the 1.32 over 12 vs 10).

[Robinhood21]

I've been trying to figure this point, but I think I finally did. Now I think I get it. The 1.20 over 10 was with an upsell to 1.32, paying 12. The 1.32 over 12 was really a 1.27 with an upsell of 5. Is that accurate? If so, it appears that their underwriter is very strict and they don't like doing 12 month deals, and they went out of their comfort to a different sub-fund that does 12 month deals and doesn't pay as well. Not anyone's fault, just their guidelines. Don't know why it's a "goodbye" moment, it's just that it's not their box, and you should haven taken it to IOU anyway, and you'll go to them next time. Hopefully for you that the client doesn't find a different broker to work with and get a better deal (the 1.32 over 12 vs 10).

every lender just has a different box there isnt anything wrong with that lol

[mistamca]

why would I close the deal for 5 points at 100k...when they gave me 85k 10 months at 1.20 buy rate with a max 12 point up sell.

Are you nuts.?

I ll close the deal elsewhere.

Let's assume you can count Yankee

Then close it elsewhere. While adding 7 points for 2 months is a bit high, I wouldn't call this blast-worthy. It's funny because a rep will ask for a bump all the time and then when a funder increases the buy rate to offset the risk, the original deal is sold more often than not.

In legit shops, portfolio management is a real thing. They might be top-heavy with 12-month deals and the only way to balance the portfolio and offer 12-month terms is to make the buy rate above their average.

[BR-Nightmare]

it's either I take the 1.20 buy rate 85k at 10 months and up sell 12 points

or I take the 100k at 12 months at 1.32 points already built in by funder

paying the house 5 points.

that just doesn't sit right with me

if you can give me a buy rate at 10 months and I ask for a stretch in term. you give me 12 months and the points already built in at 1.32 d ou CA only pay the house 5 points...

ridiculous

Funders taking the risk, you have to understand that.

They at least tried to help while protecting themselves. At the end of the day they are risking $100k, you're risking you're commission for whatever clawback period the funder has.

That's the upfront financial risk. We are not including the relationship risk.

[freeprocessing]

it's either I take the 1.20 buy rate 85k at 10 months and up sell 12 points

or I take the 100k at 12 months at 1.32 points already built in by funder

paying the house 5 points.

that just doesn't sit right with me

if you can give me a buy rate at 10 months and I ask for a stretch in term. you give me 12 months and the points already built in at 1.32 d ou CA only pay the house 5 points...

ridiculous

Increasing the buy rate is standard with alot of a paper funders. Just negotiate a little.

[Yankeeman07]

why would I close the deal for 5 points at 100k...when they gave me 85k 10 months at 1.20 buy rate with a max 12 point up sell.

Are you nuts.?

I ll close the deal elsewhere.

Let's assume you can count Yankee

I can count - you don't always hit a home run in this industry.
You should have closed the deal, the merchant receives their funds, you get paid and move on to the next deal.

Instead, the merchant is still waiting for funding, your on the board griping, when you should be closing another deal.

[CraaaCraaa Radio]

I think the point here is that they don't want the deal sold over a 1.32. A lot of funders cap the sell at a certain rate for risk purposes. They had to increase the buy rate when stretching the term which is totally normal although an increase of 3.5 a month is a little extra. Should be 1 or 2 points. You should not be upset at the situation other than the 3.5 increase in buy rate a month is excessive. What you should do is tell the funder that you want to make 12 points and you want to sell it at a 1.36 for 12 months which is more than fair. If they are strict on not selling past a 1.32, than say you want 8 points at least for the 12 month term.

I've been trying to figure this point, but I think I finally did. Now I think I get it. The 1.20 over 10 was with an upsell to 1.32, paying 12. The 1.32 over 12 was really a 1.27 with an upsell of 5. Is that accurate? If so, it appears that their underwriter is very strict and they don't like doing 12 month deals, and they went out of their comfort to a different sub-fund that does 12 month deals and doesn't pay as well. Not anyone's fault, just their guidelines. Don't know why it's a "goodbye" moment, it's just that it's not their box, and you should haven taken it to IOU anyway, and you'll go to them next time. Hopefully for you that the client doesn't find a different broker to work with and get a better deal (the 1.32 over 12 vs 10).

the 1.20 was for the 85k over 10 months with a max up sell of 12 points on 85k 1.20

I ask for a stretch in term because of the stats on merchant

1988 started business
medical facility
650+ credit
75k+ average in monthly deposits

What I get is 100k over 12 months at a fixed 1.32 from funder. And this is not a buy rate. They state 5 points commission on this new deal. As the 5 points is already built in.

I say more points are built in than just 5 points and greed is taking over...


It doesn't make sense.

[CraaaCraaa Radio]

I have funded this merchant over 15 times. And I build relationships...long term. I can and will get him a better offer with a longer term. and make way more commission.

Retention is the bread and butter for any sales representative.

What you do and what you present to a merchant will be stained in the merchants mind... thus try the best you can to provide the best offer possible.

So when Yankee is offering 100k for a 1.32 at 12 months making 5 points to the house he works at...

CraaaCraaa is giving 100k at 15 months paying 10 points and the payment to the merchant is lower and the merchant will never pick up Yankee call again.....

Yankee is too expensive for our business do not pick up...

[abfunders]

CraaaCraaa, "built in points" just means max upsell, you know that. They obviously weren't interested in doing it at 12 months.
Can I ask, why didn't you go back to your old funders you funded him with?

[BR-Nightmare]

Lets do some math here (this is with a margin of error +/- $50)

85k at lets say max upsell of 12pts making it 1.32 for 10 months (200 days). That's a payment of around $560 daily ($2800 weekly) Commission of 10k if I'm not mistaken.

100k at 1.32 for 12 months (250 days). The payments are around $520 daily ($2600 weekly) Commission of???

[Yankeeman07]

You claim you have funded this merchant many times,.

T.I.B is adequate, needs work on F.I.C.O

For the amount of $$, you should have the merchant looking at a possible SBA Bolt Program.
Work with them to get their F.I.C.O 700 + - then their cost of capital decreases greatly.

[seasonedfunder]

dont see how you would cease working with the funder here, just move on to the next offer or go with your original term and call it a day. sometimes it isn't about maximizing commission, building your book has a greater reward. most brokers dont think about tomorrow.