[JustInCase]

[abfunders]

I'm not a lawyer. However, the courts have not labeled all merchandise advances as usurious. It's only in the method that he was doing it without allowing for conciliation and threatening people when they didn't comply that the interest rate matters!

Higher that getting days, 10-day deals in $2,000 a day are automatically impossible to reconcile and therefore over the threshold to loans! I can hear the legal logic in that.

[ridextreme]

They don't put in the article that the merchant probably has 550 credit, negative days, negative ending balances and a risky business model which is why if someone invests 10K into their business they should be allowed to get a 10K return on their investment since the funder is the one taking the risk. If the state of NY has such a problem with this, why don't they start lending their own money to high risk merchants of which no bank will touch at a cheaper rate then?

[pcfunder]

They don't put in the article that the merchant probably has 550 credit, negative days, negative ending balances and a risky business model which is why if someone invests 10K into their business they should be allowed to get a 10K return on their investment since the funder is the one taking the risk. If the state of NY has such a problem with this, why don't they start lending their own money to high risk merchants of which no bank will touch at a cheaper rate then?

I 100% agree but 1.99 factor rate? 10 day deal? that is insane.... that's just bad on everyone though... that's bad on the funder for doing a deal like that, bad on the broker for pushing that type of deal on someone, and bad on the merchant for even saying yes to such a horrible deal.

[Robinhood21]

They don't put in the article that the merchant probably has 550 credit, negative days, negative ending balances and a risky business model which is why if someone invests 10K into their business they should be allowed to get a 10K return on their investment since the funder is the one taking the risk. If the state of NY has such a problem with this, why don't they start lending their own money to high risk merchants of which no bank will touch at a cheaper rate then?

lmao dont justify it

[SendDocsPlox]

Live by the sword, die by the sword applies to Funders and Merchants alike

[fundinggrasshopper]

the real question is, how many times is the same article gonna be posted about

[ridextreme]

I 100% agree but 1.99 factor rate? 10 day deal? that is insane.... that's just bad on everyone though... that's bad on the funder for doing a deal like that, bad on the broker for pushing that type of deal on someone, and bad on the merchant for even saying yes to such a horrible deal.

I agree it's very excessive, but my concern is should the state be allowed to step into a private business deal of which two private businesses agreed upon because the state thinks it's too high of a cost? If I'm selling a pair of Jordans for $5K and someone buys it, can the state come in and sue me because I sold it for too high of a price? If I agree to invest 10K into a business and the owner agrees to pay me back 20K in 10 days, if the two parties agreed to it I don't see how the state can poke it's nose in it and say it's too excessive, but that's just me.

[pcfunder]

I agree it's very excessive, but my concern is should the state be allowed to step into a private business deal of which two private businesses agreed upon because the state thinks it's too high of a cost? If I'm selling a pair of Jordans for $5K and someone buys it, can the state come in and sue me because I sold it for too high of a price? If I agree to invest 10K into a business and the owner agrees to pay me back 20K in 10 days, if the two parties agreed to it I don't see how the state can poke it's nose in it and say it's too excessive, but that's just me.

yeah I think your 100% right

and if they want to do "whats right" then they should offer resources to these businesses looking for capital instead of bashing companies who are stepping up in that regard

[Incbiz440]

They don't put in the article that the merchant probably has 550 credit, negative days, negative ending balances and a risky business model which is why if someone invests 10K into their business they should be allowed to get a 10K return on their investment since the funder is the one taking the risk. If the state of NY has such a problem with this, why don't they start lending their own money to high risk merchants of which no bank will touch at a cheaper rate then?

I think the point is that you don't, you're just squeezing the last drop out of a dead business who should be probably using that last drop to pay their rent or feed their kids. I'm trying to think of the one in a million situation where that type of funding makes any sort of sense that doesn't involve buying 5 more minutes of keeping the lights on praying that one big client is going to walk through the door and save the day.

[Incbiz440]

yeah I think your 100% right

and if they want to do "whats right" then they should offer resources to these businesses looking for capital instead of bashing companies who are stepping up in that regard

LOL they do - Those are called microloan funds, they're available nationwide, with reasonable terms and requirements and sub-market rates. Not only do they have SBA/USDA/etc etc etc funds there are many state- or region- specific and funded programs. They exist specifically so people don't have to go to credit cards, MCAs, etc.

Edit: for New York, this 55 million the state pledged for small business lending is a good example: https://www.governor.ny.gov/news/gov...ving-loan-fund

My opinion if you can't qualify for one of those, outside of some sort of industry restriction, there is something seriously wrong with your business or model. I've seen some of those get funded where you're like "this is clearly a bad idea."

[pcfunder]

LOL they do - Those are called microloan funds, they're available nationwide, with reasonable terms and requirements and sub-market rates. Not only do they have SBA/USDA/etc etc etc funds there are many state- or region- specific and funded programs. They exist specifically so people don't have to go to credit cards, MCAs, etc.

Edit: for New York, this 55 million the state pledged for small business lending is a good example: https://www.governor.ny.gov/news/gov...ving-loan-fund

My opinion if you can't qualify for one of those, outside of some sort of industry restriction, there is something seriously wrong with your business or model. I've seen some of those get funded where you're like "this is clearly a bad idea."

i think were talking about the businesses that don't qualify for this, no?

[mistamca]

I think the point is that you don't, you're just squeezing the last drop out of a dead business who should be probably using that last drop to pay their rent or feed their kids. I'm trying to think of the one in a million situation where that type of funding makes any sort of sense that doesn't involve buying 5 more minutes of keeping the lights on praying that one big client is going to walk through the door and save the day.

Bingo. I'd love to meet a business that takes a 10-20 day deal and they are not already a foot out of the door and hoping for a hail mary. I know of owners who have liquidated their kids' college fund, hid debt from their spouse (and then divorced), close some sales where they did make any profit bc cash flow, and the list goes on.

A business owner will go to extreme lengths to keep their business afloat and will make very emotional decisions bc a 10 day deal is never a rational decision.

Honestly, I'd love to hear of a legitimate situation when taking on 10-day MCA debt helps the business.

[Incbiz440]

i think were talking about the businesses that don't qualify for this, no?

In that case, you seem to be implying that any business, no matter the condition, should be eligible for some sort of funding or financing.

If that made sense, you wouldn't have scenarios like this where they are charging such an outrageous amount that makes the payoff worth the risk of being stuck holding the bag when the business fails, which they're desperately trying to avoid by structuring it with a term length less than a 12 year old's first relationship.

The answer to this is they're going to fail, so let them fail. People get desperate and dig themselves a bigger hole that is waiting for them when that failure comes - it's like the gambler that never knows when to quit.

[ridextreme]

LOL they do - Those are called microloan funds, they're available nationwide, with reasonable terms and requirements and sub-market rates. Not only do they have SBA/USDA/etc etc etc funds there are many state- or region- specific and funded programs. They exist specifically so people don't have to go to credit cards, MCAs, etc.

Edit: for New York, this 55 million the state pledged for small business lending is a good example: https://www.governor.ny.gov/news/gov...ving-loan-fund

My opinion if you can't qualify for one of those, outside of some sort of industry restriction, there is something seriously wrong with your business or model. I've seen some of those get funded where you're like "this is clearly a bad idea."

So a restaurant owner in New York City who's barely surviving but managing with 25 employees, most with young children, and his walk in cooler goes so he needs 20K to replace it otherwise he's gonna have to close until it's replaced, is gonna apply for a state grant while hoping and praying he gets fully approved and funded after sending in God knows how many stips and paperwork? Or is he gonna borrow 10K today and pay back 20K in two weeks instaed of losing 50K in revenue per week.

The NY AG's office should be looking for the lying brokers who would triple fund the guy and tell him "Don't worry, I'll get these all consolidated in 30 days into a much lower payment" who then blocks him 30 days later while he can't keep up with the payments.

[pcfunder]

So a restaurant owner in New York City who's barely surviving but managing with 25 employees, most with young children, and his walk in cooler goes so he needs 20K to replace it otherwise he's gonna have to close until it's replaced, is gonna apply for a state grant while hoping and praying he gets fully approved and funded after sending in God knows how many stips and paperwork? Or is he gonna borrow 10K today and pay back 20K in two weeks instaed of losing 50K in revenue.

The NY AG's office should be looking for the lying brokers who would triple fund the guy and tell him "Don't worry, I'll get these all consolidated in 30 days into a much lower payment" who then blocks him 30 days later while he can't keep up with the payments.

1000000% agree again

[mistamca]

So a restaurant owner in New York City who's barely surviving but managing with 25 employees, most with young children, and his walk in cooler goes so he needs 20K to replace it otherwise he's gonna have to close until it's replaced, is gonna apply for a state grant while hoping and praying he gets fully approved and funded after sending in God knows how many stips and paperwork? Or is he gonna borrow 10K today and pay back 20K in two weeks instaed of losing 50K in revenue per week.

The NY AG's office should be looking for the lying brokers who would triple fund the guy and tell him "Don't worry, I'll get these all consolidated in 30 days into a much lower payment" who then blocks him 30 days later while he can't keep up with the payments.

This concept is the reason why MCAs are such a large market but this situation does not play out well when you are talking about high-risk products (10-20 day deals) of a high-risk product (MCA).
If you only qualify for an extremely short-term deal, then you have a ton of issues plus you just lost equipment that prevents you from operating. If the only option you have is a 10-20 day deal, then there are a ton of issues and money won't fix it.

In your situation, a company can't pay back a 100% markup on equipment in a month when everyone else is financing that over years. You need to have an insane profit margin to justify something like that and I do not know of any business model that can sustain it aside from illegal ones like drug dealing.

[Incbiz440]

So a restaurant owner in New York City who's barely surviving but managing with 25 employees, most with young children, and his walk in cooler goes so he needs 20K to replace it otherwise he's gonna have to close until it's replaced, is gonna apply for a state grant while hoping and praying he gets fully approved and funded after sending in God knows how many stips and paperwork? Or is he gonna borrow 10K today and pay back 20K in two weeks instaed of losing 50K in revenue per week.

The NY AG's office should be looking for the lying brokers who would triple fund the guy and tell him "Don't worry, I'll get these all consolidated in 30 days into a much lower payment" who then blocks him 30 days later while he can't keep up with the payments.

This is going to come down to a point of view, but if your example guy grosses $2.6 million per year and can't get $10k on an app-only or low-doc loan or lease, he's exactly the kind of business I'm talking about. All anyone that is "advancing" them $10k at a 2000% annual interest rate is doing is extracting whatever they can from a dead business and putting this guy in a worse situation than they're already in.

You can say "but he's grossing $50k a week and has employees to pay" and if this guy can't get $10k, he might have just fixed his cooler just in time to not be able to make payroll because there's no way he's clearing an extra $20k that week to fix the cooler and pay double the cost. Better to let those employees walk out jobless than let them work an extra week and then get stiffed on pay.

But like I said it's a point of view thing. You could justify keeping the doors open for another day or two as worth it. I think if you looked at the big picture beyond a few days or a week or even a month, there's very little chance that advance made an overall positive impact.

[ridextreme]

This is going to come down to a point of view, but if your example guy grosses $2.6 million per year and can't get $10k on an app-only or low-doc loan or lease, he's exactly the kind of business I'm talking about. All anyone that is "advancing" them $10k at a 2000% annual interest rate is doing is extracting whatever they can from a dead business and putting this guy in a worse situation than they're already in.

You can say "but he's grossing $50k a week and has employees to pay" and if this guy can't get $10k, he might have just fixed his cooler just in time to not be able to make payroll because there's no way he's clearing an extra $20k that week to fix the cooler and pay double the cost. Better to let those employees walk out jobless than let them work an extra week and then get stiffed on pay.

But like I said it's a point of view thing. You could justify keeping the doors open for another day or two as worth it. I think if you looked at the big picture beyond a few days or a week or even a month, there's very little chance that advance made an overall positive impact.

It's not a point of view, it's common sense. The merchant might have 3 or more other positions and most likely doesn't qualify for a lease but that's only one example I'm sure I can manufacture hundreds of others where a quick infusion of cash can greatly benefit a business, even if he's paying back double the amount within a short period of time. Throw "APR" out the window, we're not talking about a mortgage or a credit card. These are not term loans, they're quick infusions of emergency cash that's not available anywhere else.

The dishonesty and fraud that goes on in the industry isn't due to the investor offering same day unsecured cash to a business in need, it's from the shady brokers who are setting the businesses up for failure. The State of NY and it's AG, Leticia James, should investigate and hold liable all the snake oil salesmen who are out right lying to merchants promising them there's something big waiting for them right over the rainbow to solve all of their problems when it was just a lie to get them to sign another contract.

[Incbiz440]

It's not a point of view, it's common sense. The merchant might have 3 or more other positions and most likely doesn't qualify for a lease but that's only one example I'm sure I can manufacture hundreds of others where a quick infusion of cash can greatly benefit a business, even if he's paying back double the amount within a short period of time. Throw "APR" out the window, we're not talking about a mortgage of a credit card. These are not term loans, they're quick infusions of emergency cash that's not available anywhere else.

The dishonesty and fraud that goes on in the industry isn't due to the investor offering same day unsecured cash to a business in need, it's from the shady brokers who are setting the businesses up for failure. The State of NY and it's AG, Leticia James, should investigate and hold liable all the snake oil salesmen who are out right lying to merchants promising them there's something big waiting for them right over the rainbow to solve all of their problems when it was just a lie to get them to sign another contract.

I respect your viewpoint, but it's the same justification the payday loan industry uses for consumer advances. For every 1 of the people who it helps there's probably a thousand or more that they send further down the toilet than they already are. And, honestly, most people already that far along into the implosion of their business probably aren't rational enough, or smart enough, to logic out (or care) whether or not the math checks out for their particular situation. Really who, who has arrived at the point where that is the only option available to them (because who else would take that), has a margin and cash flow in such a short period to support that? That's a last ditch option to save yourself and nothing else, and let's be honest, if that's your only option, your likelihood of saving yourself is small. If it wasn't, the terms wouldn't be what they are. The terms tell you all you need to know.

The shady broker thing is a whole extra layer of BS, which doubly speaks to how clearly the client doesn't have a clue as to what they're doing to begin with.

My bottom line is for people who do the math and that's going to get them to a better position, great. But 99% of people taking that aren't doing that or don't care, because it's not. And that's the issue.

[Robinhood21]

It's not a point of view, it's common sense. The merchant might have 3 or more other positions and most likely doesn't qualify for a lease but that's only one example I'm sure I can manufacture hundreds of others where a quick infusion of cash can greatly benefit a business, even if he's paying back double the amount within a short period of time. Throw "APR" out the window, we're not talking about a mortgage of a credit card. These are not term loans, they're quick infusions of emergency cash that's not available anywhere else.

The dishonesty and fraud that goes on in the industry isn't due to the investor offering same day unsecured cash to a business in need, it's from the shady brokers who are setting the businesses up for failure. The State of NY and it's AG, Leticia James, should investigate and hold liable all the snake oil salesmen who are out right lying to merchants promising them there's something big waiting for them right over the rainbow to solve all of their problems when it was just a lie to get them to sign another contract.

Let’s be honest here nobody sells a 10 day deal here if it’s not a LOC scam or promising the world

[NotALoan]

So a restaurant owner in New York City who's barely surviving but managing with 25 employees, most with young children, and his walk in cooler goes so he needs 20K to replace it otherwise he's gonna have to close until it's replaced, is gonna apply for a state grant while hoping and praying he gets fully approved and funded after sending in God knows how many stips and paperwork? Or is he gonna borrow 10K today and pay back 20K in two weeks instaed of losing 50K in revenue per week.

The NY AG's office should be looking for the lying brokers who would triple fund the guy and tell him "Don't worry, I'll get these all consolidated in 30 days into a much lower payment" who then blocks him 30 days later while he can't keep up with the payments.

Those are the same brokers beating down my door because I won't fund the guy that's stacked w/ six positions, has 550 credit, and is paying 50% of his revenue to advances. They hate funders that act responsibly because they don't get paid their commission.

[G2efunding.com]

I 100% agree but 1.99 factor rate? 10 day deal? that is insane.... that's just bad on everyone though... that's bad on the funder for doing a deal like that, bad on the broker for pushing that type of deal on someone, and bad on the merchant for even saying yes to such a horrible deal.

When we speak to potential clients and they say ----" you want me to pay back $15000 on the $10000 you lend us ? that's insane !"

I reply if you take the $10,000 go buy $10,000 worth of inventory and flip it to a customer at $30k you made $20,000 you pay us $5000 - you still made $15k without using your own money - its all how you look at it --- if your using MCA money to pay off bills ? wrong this is not the money for that ------ this funding has a purpose ------ doesn't seem so insane when you look at it from the proper perspective.

Addressing this 1.99 rate - this broker is an in and out broker - they set up tent call themselves ABC Dickheads lending agency (which many of the lenders are lol) suck the life out of every merchant they can - hurting colleagues or bombasting the industry's reputation is the farthest from their minds or concerns - ITS ABOUT RAPING AND PILLEGING take what you can and then close down and open under another Self Professed entity DEF Dickhead Lending --- Welcome to the world of Bezoz is Richer then the other Nawtsy Dictator -Elon Musk ----

Taking it one step further - we have Lead Companies selling you the leads that Lenders backdoor and sell off your files you submitted --and that over years has become normal very commonplace ----- however its THEFT ---- when a broker works hard to access a file build the relationship and submitt the file WE ARE RELYING ON THE HONESTY AND INTEGRITY of the lender to protect our information assess the file and fund it if they can

1 the lender tells you declined even though the file is fundable and they go and fund it directly leaving the submitting broker out

2 the brokers sell your files out the back door to lead companies with the good ones they fund themselves and leave the broker out

In summary you want angels go to church or synagogue -there aint non in the MCA industry lol


My perspective

[Incbiz440]

When we speak to potential clients and they say ----" you want me to pay back $15000 on the $10000 you lend us ? that's insane !"

I reply if you take the $10,000 go buy $10,000 worth of inventory and flip it to a customer at $30k you made $20,000 you pay us $5000 - you still made $15k without using your own money - its all how you look at it --- if your using MCA money to pay off bills ? wrong this is not the money for that ------ this funding has a purpose ------ doesn't seem so insane when you look at it from the proper perspective.

Addressing this 1.99 rate - this broker is an in and out broker - they set up tent call themselves ABC Dickheads lending agency (which many of the lenders are lol) suck the life out of every merchant they can - hurting colleagues or bombasting the industry's reputation is the farthest from their minds or concerns - ITS ABOUT RAPING AND PILLEGING take what you can and then close down and open under another Self Professed entity DEF Dickhead Lending --- Welcome to the world of Bezoz is Richer then the other Nawtsy Dictator -Elon Musk ----

Taking it one step further - we have Lead Companies selling you the leads that Lenders backdoor and sell off your files you submitted --and that over years has become normal very commonplace ----- however its THEFT ---- when a broker works hard to access a file build the relationship and submitt the file WE ARE RELYING ON THE HONESTY AND INTEGRITY of the lender to protect our information assess the file and fund it if they can

1 the lender tells you declined even though the file is fundable and they go and fund it directly leaving the submitting broker out

2 the brokers sell your files out the back door to lead companies with the good ones they fund themselves and leave the broker out

In summary you want angels go to church or synagogue -there aint non in the MCA industry lol


My perspective

Sure, that's math. For lack of less expensive options, if you can still put pen to paper and you're coming out ahead with an MCA (or whatever it may be) then great. How many people do that though, especially at the insane terms quoted in the article?

I'm sure there's a big-government-vs-little-government debate in here somewhere as it all now - or later - comes down to regulation. And I don't have the time or mental capacity to work through that one.

[ThorCapitalGroup]

$10,000 Loan, $20,000 Repayment

“One example presented to the court showed that the Richmond companies loaned $10,000 to a small business and required its owner to pay back $19,900 within 10 days, through daily payments of $1,999,” the AG said. “As a result of the large daily payments and the short, 10-day repayment term, the annual interest rate for the merchant cash advance, including fees, came close to 4,000%— almost 250 times the legal interest rate.”

SOURCE: https://www.cutoday.info/Fresh-Today...ance-Companies

Anybody that does deals like this should be in jail.