Any chance of Credibility ever coming back?
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  1. #1

    Any chance of Credibility ever coming back?

    Man, what a blessing they were! On terms, rates and dollar amounts, they were unrivalled; almost comparable to an SBA 7(a) but with the turnaround time of an MCA. I’m not too sure why they shut down to begin with (I’ve heard rumors that defaults were through the roof and they were bleeding money as a result). But do any of you guys think that there’s any semblance of a chance that they could one day return? Because my numbers for 2024 sure would take a sharp uptick if they did!!!

  2. #2
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    Educated guess time, based on just about every bank failure of all time:
    They probably shut down because they were offering too low loan amounts for the risk they were taking. Yes, a lot of MCA funders make (a lot) of money, but that's because they price correctly. There are a lot business owners who go on super expensive fancy expensive vacations because their business is booming and they're profitable.... because they're priced correctly. And their cost of capital was probably too high to continue offering rates competing with a bank.

  3. #3
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    It is very easy to put out money at a super low cost to get the deals done. The very hard part is collecting it and when the deals go bad you do not have the profit margins in the deal that do well to cover the loss. Banks price there loans the way they do for a reason and so do we as a mca company. If you try to lower it it to gain the market share you will only put yourself out of business. I had seen this to many times in 13 years i have been doing mca's. So many funders that were here when i started are gone and so many came and went trying to follow that model and it does not work.

  4. #4
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    Credibily went out of business? When?

  5. #5
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    Quote Originally Posted by TheUnderwriter View Post
    Credibily went out of business? When?
    CrediBILITY

  6. #6
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    I have never even heard of them or seen them in banks before if there a CredIBILITY company that differs from Credibily

  7. #7
    Senior Member Reputation points: 32658 Zach's Avatar
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    Read the book "Unwound" by Ethan Senturia (Dealstruck).

    It's a great book on why this model doesn't work.
    Zachary Ramirez – CEO
    Phone: 562-391-7099
    Email: zach@zacharyjosephramirez.com

    1661 N. Raymond Ave #265
    Anaheim CA 92801

  8. #8
    A forum user Reputation points: 2147483647 Sean Cash's Avatar
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    Quote Originally Posted by Zach View Post
    Read the book "Unwound" by Ethan Senturia (Dealstruck).

    It's a great book on why this model doesn't work.
    It should be required reading for this whole industry. If I had a nickel for every startup that told me that their model "is to actually help the merchant" by offering super low rates with super long terms, I'd be rich. Almost every single one of those companies eventually went out of business.

  9. #9
    A forum user Reputation points: 2147483647 Sean Cash's Avatar
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    Quote Originally Posted by Zach View Post
    Read the book "Unwound" by Ethan Senturia (Dealstruck).

    It's a great book on why this model doesn't work.

    Actually one of the lesser known famous things about this tell-all book is that the author inadvertently outed the hedge fund operator backing him as a fraud. I remember reading the book in 2017 and being like "ummmm.... is he alleging what I think he's alleging?"

    The hedge fund's CEO was arrested 3 years later. https://www.justice.gov/usao-cdca/pr...se-alleging-he

  10. #10
    this is wild!

    Quote Originally Posted by Sean Cash View Post
    Actually one of the lesser known famous things about this tell-all book is that the author inadvertently outed the hedge fund operator backing him as a fraud. I remember reading the book in 2017 and being like "ummmm.... is he alleging what I think he's alleging?"

    The hedge fund's CEO was arrested 3 years later. https://www.justice.gov/usao-cdca/pr...se-alleging-he

  11. #11
    Senior Member Reputation points: 51397 DTFdowntofund's Avatar
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    Quote Originally Posted by Sean Cash View Post
    Actually one of the lesser known famous things about this tell-all book is that the author inadvertently outed the hedge fund operator backing him as a fraud. I remember reading the book in 2017 and being like "ummmm.... is he alleging what I think he's alleging?"

    The hedge fund's CEO was arrested 3 years later. https://www.justice.gov/usao-cdca/pr...se-alleging-he
    Wow

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