[HMHNYC]

I hope that what I'm about to say, resonates with at least some of you.

One of the most significant shortcomings within our industry, in my eyes, lies in our inability to elevate businesses [who are both willing and capable] beyond the confines of lender rankings and, eventually, out of this space altogether. We're all familiar with those borrowers who have endured 14 renewals with CFG, maintaining a FICO score of 520, holding 3 positions, seeing their revenue double, and sustaining strong cashflow with a 35% remit. This represents just one of the industry's many failings, but I'm willing to bet that each day, you all encounter something that's broken and easily fixable, yet nothing changes.

Why are D lenders the only ones in on a business that's growing and paying just because of poor credit and a high remittance? How can we see past this?

Why do entire industries get banished due to a brief period of underperformance when there are countless external factors influencing the success of a deal?

Has anyone ever analyzed the performance data between funding at a 1.40 versus a 1.499? That's a ~20% reduction in the cost of capital, which could have a huge impact on a borrower, and I'd be curious to see how large of an impact you'd actually see, especially when your average term of 110 days. Not to mention that most of us are fee-based platforms and the cost of capital reduction has no impact on your revenue. But aside from the potential financial gains, think about the positive impact you could have on our industry, even if it's just a step in the right direction relative to its current state.

I know that our primary goal is to make money, and we operate in a nefarious industry. However, we also play a crucial role in supporting the backbone of the economy by bridging the gaps left by traditional banks.

There will always be 10,000 daily applicants for fundings and we could continue to fund and forget for the rest of our lives, perpetuating the predatory industry stereotype. But why aren't more people willing to change the narrative? I'm not referring to companies like OnDeck, Can Capital, and Biz2Credit, who aren't even participates in the conversation, but to everyone within the B-D space. Don't you believe that a shift in direction could benefit not only your company but also the future of the entire industry?

Maybe I'm being naive, would love perspective here. If these aren't things we can change, what can we? Or is this the fate of our industry?

[Yankeeman07]

Please enlighten us on what you are drinking or smoking?

[SendDocsPlox]

Well I may be off base here but I like money, and I don't like losing my money to deadbeat merchants regardless of whether the deal is good or bad, so if I can make more money I'm going to. Anyone saying the contrary on this board is full of ****.

The industry isn't going to self regulate, the government is going to need to come in with whip and rod and force changes in rates and terms and fees.

When that happens we can all get together in a circlejerk and rejoice in the assistance we're giving to the needy. The people doing it currently are sociopaths.

[Olderguy]

Not any different than politics...politicians only care about donors and money and getting re-elected.....what is in the best interests of the country and their constituents is irrevelant. Same **** different business.

[FLORIDAMAN]

Please enlighten us on what you are drinking or smoking?

Clearly those daily funder thoughts hit different at 1am

[mistamca]

For every merchant that renews 13 times, you have 13 merchants that defaulted on the 1st funding.
Why would I maintain the same risk for less revenue? Thats just silly. I'll gladly accept less money for LESS risk but that isn't happening without regulation.
Most high-risk industries are typically always underperforming; it isn't brief. If the industry has high COGS or slow cash flow, then it is probably going to be a high-risk industry.

This industry is driven by brokers yet how many brokers offer only MCAs? Brokers could drive change but they don't. I can list 10+ ways to improve the industry but nothing will stick without strong legal recourse aka regulation.
Let's not forget that this is the same industry that created Reverses.

[Steven_O]

I hope that what I'm about to say, resonates with at least some of you.

One of the most significant shortcomings within our industry, in my eyes, lies in our inability to elevate businesses [who are both willing and capable] beyond the confines of lender rankings and, eventually, out of this space altogether. We're all familiar with those borrowers who have endured 14 renewals with CFG, maintaining a FICO score of 520, holding 3 positions, seeing their revenue double, and sustaining strong cashflow with a 35% remit. This represents just one of the industry's many failings, but I'm willing to bet that each day, you all encounter something that's broken and easily fixable, yet nothing changes.

Why are D lenders the only ones in on a business that's growing and paying just because of poor credit and a high remittance? How can we see past this?

Why do entire industries get banished due to a brief period of underperformance when there are countless external factors influencing the success of a deal?

Has anyone ever analyzed the performance data between funding at a 1.40 versus a 1.499? That's a ~20% reduction in the cost of capital, which could have a huge impact on a borrower, and I'd be curious to see how large of an impact you'd actually see, especially when your average term of 110 days. Not to mention that most of us are fee-based platforms and the cost of capital reduction has no impact on your revenue. But aside from the potential financial gains, think about the positive impact you could have on our industry, even if it's just a step in the right direction relative to its current state.

I know that our primary goal is to make money, and we operate in a nefarious industry. However, we also play a crucial role in supporting the backbone of the economy by bridging the gaps left by traditional banks.

There will always be 10,000 daily applicants for fundings and we could continue to fund and forget for the rest of our lives, perpetuating the predatory industry stereotype. But why aren't more people willing to change the narrative? I'm not referring to companies like OnDeck, Can Capital, and Biz2Credit, who aren't even participates in the conversation, but to everyone within the B-D space. Don't you believe that a shift in direction could benefit not only your company but also the future of the entire industry?

Maybe I'm being naive, would love perspective here. If these aren't things we can change, what can we? Or is this the fate of our industry?

Your heart is in the right place by wanting to help business owners succeed... unfortunately, MCA is not the space (nor product) for low cost funds.

The reality is, a merchant who takes a cash advance is probably limited in the funds they CAN receive... either because of time in business, credit score or management of revenue or need of speed in funds. The businesses that do not have those issues, are offered better capital, usually because they own assets they can leverage, programs like the SBA and even investors throwing money at them (because people who can manage money, will usually manage yours well too!).

The default rate in the B-D space is insane... and it can only be compensated with the higher rates OTHERS have to pay. Otherwise, those same funders HELPING, will end up with NOTHING. A 1.499 factor rate on $20k average size deal only needs 2-3 deals to go bad for a funder to be hurting in the ribs. Imagine $200k. You'd have to sell a lot of 1.499's to recover that kind of loss! And truth be told, funders are putting MILLIONS a month on the street.... so the real $$$ #'s of loss and what's in collections (and collectable) is LARGE... imagine in a hiccup, recession, war adding to risk of default...

There's a lot of greed in the business but I don't think it's mostly on the funders.

But what do I know?? I'm out here trying to save the world of a business owner, one funding at a time!

[ridextreme]

I hope that what I'm about to say, resonates with at least some of you.

One of the most significant shortcomings within our industry, in my eyes, lies in our inability to elevate businesses [who are both willing and capable] beyond the confines of lender rankings and, eventually, out of this space altogether. We're all familiar with those borrowers who have endured 14 renewals with CFG, maintaining a FICO score of 520, holding 3 positions, seeing their revenue double, and sustaining strong cashflow with a 35% remit. This represents just one of the industry's many failings, but I'm willing to bet that each day, you all encounter something that's broken and easily fixable, yet nothing changes.

Why are D lenders the only ones in on a business that's growing and paying just because of poor credit and a high remittance? How can we see past this?

Why do entire industries get banished due to a brief period of underperformance when there are countless external factors influencing the success of a deal?

Has anyone ever analyzed the performance data between funding at a 1.40 versus a 1.499? That's a ~20% reduction in the cost of capital, which could have a huge impact on a borrower, and I'd be curious to see how large of an impact you'd actually see, especially when your average term of 110 days. Not to mention that most of us are fee-based platforms and the cost of capital reduction has no impact on your revenue. But aside from the potential financial gains, think about the positive impact you could have on our industry, even if it's just a step in the right direction relative to its current state.

I know that our primary goal is to make money, and we operate in a nefarious industry. However, we also play a crucial role in supporting the backbone of the economy by bridging the gaps left by traditional banks.

There will always be 10,000 daily applicants for fundings and we could continue to fund and forget for the rest of our lives, perpetuating the predatory industry stereotype. But why aren't more people willing to change the narrative? I'm not referring to companies like OnDeck, Can Capital, and Biz2Credit, who aren't even participates in the conversation, but to everyone within the B-D space. Don't you believe that a shift in direction could benefit not only your company but also the future of the entire industry?

Maybe I'm being naive, would love perspective here. If these aren't things we can change, what can we? Or is this the fate of our industry?

I read this twice and I still don't know what the question or concern is

[FCG]

I read this twice and I still don't know what the question or concern is

He's trying to be the voice of the industry. He wants to start a revolution to get B-D paper funders to stop doing 1.499s, lol.

[FCG]

Why do entire industries get banished due to a brief period of underperformance when there are countless external factors influencing the success of a deal?

https://freightwaves.com/news/iowa-b...trucking-loans

[Olderguy]

https://freightwaves.com/news/iowa-b...trucking-loans

https://drive.google.com/file/d/1EDN...ew?usp=sharing

[fundinggrasshopper]

Why do entire industries get banished due to a brief period of underperformance when there are countless external factors influencing the success of a deal?

this cannot be a legit question lmao

not responding to the countless external factors that can and will influence the rtr of your deals is simply being irresponsible with your own money. You probably wouldnt lend your friend money if you knew, for example, he was a junkie fresh out of his 5th rehab trip.

a changing macro-economic environment is much, much, much different than a "brief period of underperformance"...

The people who ignore that, i would expect, are the people left holding the bag when **** hits the fan.

[MichaelP]

I hope that what I'm about to say, resonates with at least some of you.

One of the most significant shortcomings within our industry, in my eyes, lies in our inability to elevate businesses [who are both willing and capable] beyond the confines of lender rankings and, eventually, out of this space altogether. We're all familiar with those borrowers who have endured 14 renewals with CFG, maintaining a FICO score of 520, holding 3 positions, seeing their revenue double, and sustaining strong cashflow with a 35% remit. This represents just one of the industry's many failings, but I'm willing to bet that each day, you all encounter something that's broken and easily fixable, yet nothing changes.

Why are D lenders the only ones in on a business that's growing and paying just because of poor credit and a high remittance? How can we see past this?

Why do entire industries get banished due to a brief period of underperformance when there are countless external factors influencing the success of a deal?

Has anyone ever analyzed the performance data between funding at a 1.40 versus a 1.499? That's a ~20% reduction in the cost of capital, which could have a huge impact on a borrower, and I'd be curious to see how large of an impact you'd actually see, especially when your average term of 110 days. Not to mention that most of us are fee-based platforms and the cost of capital reduction has no impact on your revenue. But aside from the potential financial gains, think about the positive impact you could have on our industry, even if it's just a step in the right direction relative to its current state.

I know that our primary goal is to make money, and we operate in a nefarious industry. However, we also play a crucial role in supporting the backbone of the economy by bridging the gaps left by traditional banks.

There will always be 10,000 daily applicants for fundings and we could continue to fund and forget for the rest of our lives, perpetuating the predatory industry stereotype. But why aren't more people willing to change the narrative? I'm not referring to companies like OnDeck, Can Capital, and Biz2Credit, who aren't even participates in the conversation, but to everyone within the B-D space. Don't you believe that a shift in direction could benefit not only your company but also the future of the entire industry?

Maybe I'm being naive, would love perspective here. If these aren't things we can change, what can we? Or is this the fate of our industry?

I like some of the others here am not sure what the point is exactly, but if you're saying that there's a large delta that you're seeing with the rates and terms that some business owners are getting and what they actually should qualify for, then you should wrangle up some capital, service that delta and gobble up market share. You will absolutely crush it if you are correct, but if you are incorrect as I suspect you are you will lose a lot of money, but perhaps come out the other side with a new found appreciation for the industry and the tried and true underwriting models.

[MCA-VET]

Dialogue is always important.

[Franklin]

Merchants work with our industry because they can solve a difficult money problem quickly when a more favorable or desirable solution is not available for them.


When a merchant decides to take an MCA at that time, the pain from the problem is too great, or they have a big opportunity and it’s not worth losing it. Either way, they don't have the benefit of time, and they don't have the benefit of being choosy or holding out for options.


What a merchant can do that would be helpful, is while they take the fast money, they can do other things to improve their credit, improve their Paydex score for their corporation (have vendors making positive reports on their credit), take care of any previous derogatories, so that they no longer have to be in a situation where they need fast expensive money, unless they choose to.

(and many merchants benefit from fast money, it's not always because of a gun to their head).


The MCA industry is a symptom of a larger financial market that does not provide a lot of retail capital solutions for sub-prime businesses, or businesses that need access to capital quickly. If these banks did that, the MCA industry wouldn’t exist.



The original poster is talking to the wrong market segment about how to fix these issues.






www.UccRadar.com - Large sales revenue merchants filling out YOUR application.

[MichaelP]

Merchants work with our industry because they can solve a difficult money problem quickly when a more favorable or desirable solution is not available for them.


When a merchant decides to take an MCA at that time, the pain from the problem is too great, or they have a big opportunity and it’s not worth losing it. Either way, they don't have the benefit of time, and they don't have the benefit of being choosy or holding out for options.


What a merchant can do that would be helpful, is while they take the fast money, they can do other things to improve their credit, improve their Paydex score for their corporation (have vendors making positive reports on their credit), take care of any previous derogatories, so that they no longer have to be in a situation where they need fast expensive money, unless they choose to.

(and many merchants benefit from fast money, it's not always because of a gun to their head).


The MCA industry is a symptom of a larger financial market that does not provide a lot of retail capital solutions for sub-prime businesses, or businesses that need access to capital quickly. If these banks did that, the MCA industry wouldn’t exist.



The original poster is talking to the wrong market segment about how to fix these issues.






www.UccRadar.com - Large sales revenue merchants filling out YOUR application.

Agree with everything here.

It's my understanding that the banks did service these folks for a while, but aren't able to charge what they would need to charge in interest in many cases because of usury in order for the portfolios to make sense. I was also told that since they do everything by hand it costs them the same amount of money to underwrite a 100k loan as it does 10MM loan and if that's true it makes sense to focus all of their resources on those larger transactions instead.

[Franklin]

Agree with everything here.

It's my understanding that the banks did service these folks for a while, but aren't able to charge what they would need to charge in interest in many cases because of usury in order for the portfolios to make sense. I was also told that since they do everything by hand it costs them the same amount of money to underwrite a 100k loan as it does 10MM loan and if that's true it makes sense to focus all of their resources on those larger transactions instead.

100% Correct

The regulation banks go through, bloats the process and makes it almost unprofitable long term, to do small, short-term loans, when there is a Usury cap.






www.UccRadar.com - Large sales revenue merchants filling out YOUR application.