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05-23-2024, 02:35 PM #1
- Join Date
- Feb 2017
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- 3,416
Fundkite does this, as do all MCAs that are credit card splits. The broker gets paid, the funder has to realize that the deal might go sideways for a bit, but there is no true default if the revenue drops. The only challenge would be the client who commits fraud and opens a second bank account and deposits certain deposits into that account and slowly depletes the other one without the funder noticing. You can probably catch that, since it's not so easy just to change bank accounts.
You case is not a "default out of the gate", it's a drop in revenue. We pray underwrite assuming the past performance is indicative of future results.
There's no "seasoned" merchant who can really do this. They'd have to lie to get away with it, and then prove it. How would they make it a "regular strategy" without actually losing their own revenue? That seems counterproductive to reduce their income. How could they control that?
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