[TheChoice]

I dont vouch for any of the clients, i don't know if it was an overzealous broker or client, however the excessive stacking is hurting his business, and by reducing the payments to one, netting some working capital and possibly lowering his daily it would be a better sound situation for the client.
as for my personal take on what will stop him from more money being taken…lol….an addendum just seeing if we can help out.

[jotucker1983]

The Choice,

I run into this on a consistent basis. So it typically goes like this:

- The merchant has 4 advances stacked on top of each other.

- The balances total about $65,000 and the merchant's gross annual sales are about $500,000. The four advances are all on short terms with total payments coming out at about $800 a day, so if he keeps going he will be done in about three and a half months.

- But do you know why he's having a hard time? The advances are taking over 40% of his monthly gross. He has vendors to pay, suppliers to pay, employees to pay, he has to pay himself, etc. So what happens? He starts bouncing checks, NSFs rack up, overdrafts rack up, negative balance days rack up, etc.

- So after sending me 3 months of statements with NSFs and Negative Days everywhere, $65k in total balances and only about $500k in gross annual sales if that much, the merchant says, "Hey John, can 1st Capital give me one loan to pay off all 4 of these advances so I can just make one payment? The payments are killing me John."

What do I tell the merchant? I tell him there's absolutely nothing we can do until he survives the mess that these companies have put him in. He's going to have to survive paying 40% plus of his gross sales to cash advance companies, survive a massive amount of NSFs and Overdrafts, and hopefully don't go out of business in the process. THEN, after we see that he paid off the advances, he's going to have to go a solid 60 days with little NSFs (under 5 - 10 a month) so we can see that his cashflow is back on track and that the business is back on track as well. Only THEN can we do something.

The moral of the story is, merchants and lenders need to stop going pass a 2nd position. A 2nd position, while we can still argue violates the contract on the 1st position, a lot of times a 1st position lender will not fund a merchant until they are 60% - 65% paid down, so doing a small 2nd position for a merchant that's at 40% paid down should be enough to get the merchant some side capital without causing cashflow issues.

Anything beyond that is excessive and needs to stop before the excessive advances put these merchants out of business, and Regulators come a calling.

[JSL23]

I agree, in principle with everything you just said....however why pass up on the business if you can get a consolidation done!! I've taken the hard role before with Merchants and it has worked a couple of times, telling them they have to wait it out....while a couple of times it has not. I also have paid off 3 advances...Merchant was able to net 50%. Sometimes they learn their lesson, sometimes they go ahead and do it again.

My opinion is that we have to self regulate. The stackers won't go away....too much money at stake. Maybe, if everyone could somehow all agree and make it official that no more than a total of, say 15%(as an example) of the Merchant's yearly gross can be pulled it will allow "responsible stacking" (best expression i could think of). Example:

John Smith grosses $100,000/year...his remaining balance is $9,000....someone can do a $6000 2nd which would cap it at $15,000 total.

Obviously more stipulations would have to go into it to make that type of situation feasible, but this way everyone would walk away happy; the 1st position shops, the stacker and a consolidation would remain viable...

The Choice,

I run into this on a consistent basis. So it typically goes like this:

- The merchant has 4 advances stacked on top of each other.

- The balances total about $65,000 and the merchant's gross annual sales are about $500,000. The four advances are all on short terms with total payments coming out at about $800 a day, so if he keeps going he will be done in about three and a half months.

- But do you know why he's having a hard time? The advances are taking over 40% of his monthly gross. He has vendors to pay, suppliers to pay, employees to pay, he has to pay himself, etc. So what happens? He starts bouncing checks, NSFs rack up, overdrafts rack up, negative balance days rack up, etc.

- So after sending me 3 months of statements with NSFs and Negative Days everywhere, $65k in total balances and only about $500k in gross annual sales if that much, the merchant says, "Hey John, can 1st Capital give me one loan to pay off all 4 of these advances so I can just make one payment? The payments are killing me John."

What do I tell the merchant? I tell him there's absolutely nothing we can do until he survives the mess that these companies have put him in. He's going to have to survive paying 40% plus of his gross sales to cash advance companies, survive a massive amount of NSFs and Overdrafts, and hopefully don't go out of business in the process. THEN, after we see that he paid off the advances, he's going to have to go a solid 60 days with little NSFs (under 5 - 10 a month) so we can see that his cashflow is back on track and that the business is back on track as well. Only THEN can we do something.

The moral of the story is, merchants and lenders need to stop going pass a 2nd position. A 2nd position, while we can still argue violates the contract on the 1st position, a lot of times a 1st position lender will not fund a merchant until they are 60% - 65% paid down, so doing a small 2nd position for a merchant that's at 40% paid down should be enough to get the merchant some side capital without causing cashflow issues.

Anything beyond that is excessive and needs to stop before the excessive advances put these merchants out of business, and Regulators come a calling.

[WhoisKingsley]

The Choice,

I run into this on a consistent basis. So it typically goes like this:

- The merchant has 4 advances stacked on top of each other.

- The balances total about $65,000 and the merchant's gross annual sales are about $500,000. The four advances are all on short terms with total payments coming out at about $800 a day, so if he keeps going he will be done in about three and a half months.

- But do you know why he's having a hard time? The advances are taking over 40% of his monthly gross. He has vendors to pay, suppliers to pay, employees to pay, he has to pay himself, etc. So what happens? He starts bouncing checks, NSFs rack up, overdrafts rack up, negative balance days rack up, etc.

- So after sending me 3 months of statements with NSFs and Negative Days everywhere, $65k in total balances and only about $500k in gross annual sales if that much, the merchant says, "Hey John, can 1st Capital give me one loan to pay off all 4 of these advances so I can just make one payment? The payments are killing me John."

What do I tell the merchant? I tell him there's absolutely nothing we can do until he survives the mess that these companies have put him in. He's going to have to survive paying 40% plus of his gross sales to cash advance companies, survive a massive amount of NSFs and Overdrafts, and hopefully don't go out of business in the process. THEN, after we see that he paid off the advances, he's going to have to go a solid 60 days with little NSFs (under 5 - 10 a month) so we can see that his cashflow is back on track and that the business is back on track as well. Only THEN can we do something.

The moral of the story is, merchants and lenders need to stop going pass a 2nd position. A 2nd position, while we can still argue violates the contract on the 1st position, a lot of times a 1st position lender will not fund a merchant until they are 60% - 65% paid down, so doing a small 2nd position for a merchant that's at 40% paid down should be enough to get the merchant some side capital without causing cashflow issues.

Anything beyond that is excessive and needs to stop before the excessive advances put these merchants out of business, and Regulators come a calling.

Between this and Sean's post I agree. There is a bunch of shenanigans going on and then everyone wants to sell on consolidations. CONSOLIDATIONS ARE NOT EASY. I GET 20+ consultations a week and maybe 5 can get done within a weeks time MAYBE. It's like someone saying... "Hey, I borrowed $100 from Moe, Larry, and Curly in the past month and I can't pay them back... can you let me borrow $300 and an extra $300 so I can pay my light bill and I'll pay you back within a year?" How do I know you are going to pay ME back? There is no security there. Depending on the type of business, you can file bankruptcy in a week from now. There isn't a Magical Consolidations Wand that can be waived and "Brokers" can't get upset if a consultant or lender cannot help you with a file that seems too high risk because of CREDIT, INDUSTRY, or FINANCIALLY.

[TheChoice]

Thanks ADiamond, I recently reached out to you gentleman and ladies, however I believe we aren't working with collateral on this one.

I think a majority of callers/brokers state that consolidation is a possibility just to get docs in. However, I don't look to waste our investors and underwriters time, or our clients first and foremost. So unless its a financially feasible file, I'm not the one placing that 4 or 5th, unless your average is amazing and it makes complete financial sense (thats choppy water…very deep).

I understand that the risk is heightened by their stacking history, but what if makes economical sense? Fund My Payroll seems to have a unique approach to resolving an over stacked client.

What if the merchant qualifies for 100k, yet has 9k in balances by 5 companies, and 700 credit? (HYPOTHETICAL)

I dunno... Once again, I never vouch for clients, and why would i vouch for the broker who positioned the last deal for the client as well. Its so important for brokers to meet the goals and expectations of both our investors, underwriters and clients.

But the responsibility is in both the broker educating the client on the situation whether its detrimental if not utilized right, as well as the client, who is obligated to the money by signing the contract. Stacking is an issue in the business, i get it. However, it is still here and there definitely should be programs that deal specifically with it.

So…again if anybody knows a lender who doesn't mind amount of positions (3), but their financial ability to net + 40 to 50%, and sustain payment for such funding., I would appreciate the help with our placement of this client as I rather consolidate than think of placing another deal in the mix. Thank you all kindly for your responses.

The Choice
Simple Choice Capital
www.simplechoicecapital.com
"The Choice is Simple…"

[WhoisKingsley]

Thanks ADiamond, I recently reached out to you gentleman and ladies, however I believe we aren't working with collateral on this one.

I think a majority of callers/brokers state that consolidation is a possibility just to get docs in. However, I don't look to waste our investors and underwriters time, or our clients first and foremost. So unless its a financially feasible file, I'm not the one placing that 4 or 5th, unless your average is amazing and it makes complete financial sense (thats choppy water…very deep).

I understand that the risk is heightened by their stacking history, but what if makes economical sense? Fund My Payroll seems to have a unique approach to resolving an over stacked client.

What if the merchant qualifies for 100k, yet has 9k in balances by 5 companies, and 700 credit? (HYPOTHETICAL)

I dunno... Once again, I never vouch for clients, and why would i vouch for the broker who positioned the last deal for the client as well. Its so important for brokers to meet the goals and expectations of both our investors, underwriters and clients.

But the responsibility is in both the broker educating the client on the situation whether its detrimental if not utilized right, as well as the client, who is obligated to the money by signing the contract. Stacking is an issue in the business, i get it. However, it is still here and there definitely should be programs that deal specifically with it.

So…again if anybody knows a lender who doesn't mind amount of positions (3), but their financial ability to net + 40 to 50%, and sustain payment for such funding., I would appreciate the help with our placement of this client as I rather consolidate than think of placing another deal in the mix. Thank you all kindly for your responses.

The Choice
Simple Choice Capital
www.simplechoicecapital.com
"The Choice is Simple…"

What if the merchant qualifies for 100k, yet has 9k in balances by 5 companies, and 700 credit? - walk in the park, but have you ever had a deal this simple Mr. Simple Choice?

[TheChoice]

Like everyday. lol.

[SupremeCapitalGroupinc]

[QUOTE=jotucker1983;20653]The Choice,

I run into this on a consistent basis. So it typically goes like this:

- The merchant has 4 advances stacked on top of each other.

- The balances total about $65,000 and the merchant's gross annual sales are about $500,000. The four advances are all on short terms with total payments coming out at about $800 a day, so if he keeps going he will be done in about three and a half months.

- But do you know why he's having a hard time? The advances are taking over 40% of his monthly gross. He has vendors to pay, suppliers to pay, employees to pay, he has to pay himself, etc. So what happens? He starts bouncing checks, NSFs rack up, overdrafts rack up, negative balance days rack up, etc.

- So after sending me 3 months of statements with NSFs and Negative Days everywhere, $65k in total balances and only about $500k in gross annual sales if that much, the merchant says, "Hey John, can 1st Capital give me one loan to pay off all 4 of these advances so I can just make one payment? The payments are killing me John."

What do I tell the merchant? I tell him there's absolutely nothing we can do until he survives the mess that these companies have put him in. He's going to have to survive paying 40% plus of his gross sales to cash advance companies, survive a massive amount of NSFs and Overdrafts, and hopefully don't go out of business in the process. THEN, after we see that he paid off the advances, he's going to have to go a solid 60 days with little NSFs (under 5 - 10 a month) so we can see that his cashflow is back on track and that the business is back on track as well. Only THEN can we do something.

The moral of the story is, merchants and lenders need to stop going pass a 2nd position. A 2nd position, while we can still argue violates the contract on the 1st position, a lot of times a 1st position lender will not fund a merchant until they are 60% - 65% paid down, so doing a small 2nd position for a merchant that's at 40% paid down should be enough to get the merchant some side capital without causing cashflow issues.

Anything beyond that is excessive and needs to stop before the excessive advances put these merchants out of business, and Regulators come a calling

This kid wI'll be stuck on this file for months before he gets Anything your saying.....