[J.Celifarco]

At the end of the day if and when regulation comes they wont care if a couple of merchant tried to defraud a bank. We should know better and it will be us who are punished.. All you need is some congressman somewhere to try to make a name for himself by going after what he considers a bunch of predatory lenders who took advantage of one of his constituents. It doesn't even need to be true, so why should we invite it upon ourselves. There is nothing to be gained by doing 4th 5th etc. positions. There are plenty of deals out there worth funding why go after after these bottom of the barrel deals just gives us a bad name.

[jotucker1983]

Anthony,

I honestly believe that most of the merchants doing these types of stacks do not know what they are getting themselves into. On a daily basis, when I run into a merchant with an outstanding balance that's being paid on a split, when I begin discussing factor rates and "cost for capital", they start discussing how they are only paying "7%" right now so why would they switch over to me with my 1.20? In other words, they don't even know the difference between their holdback percentage and their factor rate.

While some merchants are frauds and looking to take out excessive advance balances, then file bankruptcy or sell the business, that's not most merchants from my experience. Most merchants just don't really understand a lot of the concepts and procedures that are going on with our industry, just like on the bankcard side they don't understand interchange.

These same merchants would ask me, "John, why should I go with your bankcard proposal when you can only save me $30 a month, when this other company can save me $400 a month?" But when you review his processing statements, he doesn't even pay out $400 a month in charges/fees and he owns his processing technology free/clear, so how can you save $400 a month if you aren't paying that much out in the first place lol?

Lol, like I said, these merchants are smart enough to run million dollar grossing businesses, but seem to not truly understand the lingo of the merchant services/merchant cash advance industry.

Some companies and brokers in our space understand this situation and instead of educating merchants, they take advantage of their lack of knowledge to put them in deals that make absolutely no sense.