New Player to MCA Consolidations

**1StopFunding** · 03-03-2015, 07:10 AM

Seems as though more and more funders are now consolidating and lowering the amount a merchant has to net for an existing advance can be paid. Received this from Principis yesterday;

Merchants with Existing Advance Balances now must net only 30%!! So 70% of the advance can be used to pay off outstanding advances!!
Ø Principis will pay off multiple advances – a great option for merchants looking to consolidate!!!!

Do you guys think we'll see more A paper funders make this move to offer consolidations?

**mcg168** · 03-03-2015, 09:46 AM

Originally Posted by 1StopFunding

Seems as though more and more funders are now consolidating and lowering the amount a merchant has to net for an existing advance can be paid. Received this from Principis yesterday;

Merchants with Existing Advance Balances now must net only 30%!! So 70% of the advance can be used to pay off outstanding advances!!
Ø Principis will pay off multiple advances – a great option for merchants looking to consolidate!!!!

Do you guys think we'll see more A paper funders make this move to offer consolidations?

I thought most A Paper lenders were trending in the opposite direction. CAN only allows a 20-30% payoff...BFS is usually around 35%...There is a very simple reason the A Paper lenders dont like paying off such large balances - those deals have a much higher default rate.

**anonymous** · 03-03-2015, 09:51 AM

Originally Posted by mcg168

CAN only allows a 20-30% payoff...BFS is usually around 35%...

Incorrect. What are you talking about?

**WALLFUND** · 03-03-2015, 10:09 AM

I think this could be a good thing for some merchants , I understand the whole concept of double interest is a big pill to swallow but for the merchants that got in over their head with heavy payments buying out the existing advance or advances and consolidating and stretching the term to lower the payment drastically could be their only way out .

**mcg168** · 03-03-2015, 10:41 AM

Originally Posted by anonymous

Incorrect. What are you talking about?

please tell me what am I incorrect about??

**WhoisKingsley** · 03-03-2015, 10:45 AM

Principis has always been a go to for solid credit card deals- I'm glad they changed up the game and are a 30% net- this is pretty big news!

As for consols- I made a HUGE mistake on offering them last summer though a partner while I did the underwriting- was it worth it? I received about 30 files in not even 3 days. 3 got done- the rest either had a low annual gross which when you looked at the payback vs. the annual you were looking at about 25-40% of their receivables. The businesses had some seasonality to it, or there was nothing substantial that was worth doing a large payoff. The risk is crazy and without something to hold on to (collateral). I would like to see in the next couple of months if they release numbers to show how many consols they did and what the average stack payoff and how many they average paying vs. How many they received.

**anonymous** · 03-03-2015, 10:57 AM

Originally Posted by mcg168

please tell me what am I incorrect about??

Your payoff percentages, ours are much more liberal with those lenders - guess it varies by ISO.

**1StopFunding** · 03-03-2015, 10:58 AM

I am liking them WhoisKingsley. They rolled out their ISO portal a few weeks ago. I've gotten some pretty decent offers.

**mcg168** · 03-03-2015, 11:07 AM

Originally Posted by anonymous

Your payoff percentages, ours are much more liberal with those lenders - guess it varies by ISO.

I guess a better way to phrase it, for us anyway, is that its no exception is needed for those buyout percentages. They'll go up higher on certain deals if it makes sense, but it needs to be approved by an underwriter.

CAN seems to be trying to get away from higher buyouts more than anyone else.

**MCAVeteran** · 03-03-2015, 01:23 PM

Originally Posted by anonymous

Your payoff percentages, ours are much more liberal with those lenders - guess it varies by ISO.

I thought BFS was net 50 and can is net 80 on loans and net 70 on advances.

As far as principis going to net 30, that seems like a recipe for bad debt unless they have stretched out terms past 12 months to refi all those stacks. Otherwise, a move to just buy paper

**Advancepro** · 03-03-2015, 01:52 PM

What's the contact info for Principis underwriting / submissions?

**1StopFunding** · 03-03-2015, 05:53 PM

Nick Del Deo
Principis Capital LLC
Senior Vice President
212-560-6320 - direct

**Chambo** · 03-04-2015, 03:08 PM

Originally Posted by WhoisKingsley

Principis has always been a go to for solid credit card deals- I'm glad they changed up the game and are a 30% net- this is pretty big news!

As for consols- I made a HUGE mistake on offering them last summer though a partner while I did the underwriting- was it worth it? I received about 30 files in not even 3 days. 3 got done- the rest either had a low annual gross which when you looked at the payback vs. the annual you were looking at about 25-40% of their receivables. The businesses had some seasonality to it, or there was nothing substantial that was worth doing a large payoff. The risk is crazy and without something to hold on to (collateral). I would like to see in the next couple of months if they release numbers to show how many consols they did and what the average stack payoff and how many they average paying vs. How many they received.

Principus/First Funds are still around?

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