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05-19-2015, 11:55 AM #1
- Join Date
- Apr 2013
- Location
- Basalt CO
- Posts
- 867
Advice for a Defaulted Syndicated Deal
I have deal that defaulted a while back. I syndicated the entire deal. Around 75k at a 1.28. ACH deal. This is the third round of funding. First two were paid back without a hitch.
Anyway, his balance is around 48k.
He is paying very sporadically, but he is paying. I set up a payment plan but he is not adhering to it. He provides me with checks when the money becomes available.
It is a local merchant so he stops by my office to reassure me that he will get me paid, but it might take more time than i have.
He seems pretty sincere. Do i keep on accepting the piecemeal payments or file a claim.
I am thinking of letting it ride. The cost to file a claim or suit is expensive, and the ability to collect if i get a judgement will be difficult. He says he just does not have the money.
Thanks for any insight.
The syndication partner is not really of much help.
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05-19-2015, 12:00 PM #2
If you are getting payments I would let it ride. If you file a suit he will have no reason to make payments to you until the judgment is filed and you would have lost the good will of the merchant.. If you are on good terms let it ride and try to give him some incentive to get it paid off. Maybe a discount of some kind if he keeps to a payment schedule or if he is completely paid off by a certain date
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-19-2015, 12:20 PM #3
- Join Date
- Dec 2013
- Posts
- 4,713
If god forbid they stop complete payment then reach out to me to discuss options my contact is bizdev@cresthillcapital
OR
you can signup as an ISO (aside from collecting Double Digit Commissions) during our funding chats we can discuss your options.
bizdev@cresthillcapital.com
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05-19-2015, 12:20 PM #4
- Join Date
- Apr 2013
- Location
- Basalt CO
- Posts
- 867
^^Thanks. Good idea about the incentive.
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05-19-2015, 12:39 PM #5
Can you use some short-term funding to bridge the gap until you are paid?
;-)Zachary Ramirez – CEO
Phone: 562-391-7099
Email: zach@zacharyjosephramirez.com
1661 N. Raymond Ave #265
Anaheim CA 92801
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05-19-2015, 01:04 PM #6
If you attempt a judgment, you also have to figure, How long until you are able to collect? Would it be quicker then letting him pay it off? You also have to figure that this is a local merchant. If you are good with him, he may get you future business. If you play hardball, it can bite you.
And the idea about having a discount for an early payoff would really help.
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05-19-2015, 01:10 PM #7
- Join Date
- Jun 2013
- Posts
- 293
Providing a discount to a defaulted merchant? Wow.
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05-19-2015, 01:17 PM #8
It is a local guy who he has given 3 advances to.. I am not saying wipe out all the cost of the money but a small incentive to get the guy paid off, when he has given him 3 advances and has made a good deal of money on the guy already. Do what you have to do to get out of the deal without a loss. So yes offer an incentive to a defaulting merchant. I would rather collect most of the money owed to me then none
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-19-2015, 01:42 PM #9
my motto is "you can't get blood from a rock." the judgment will warn creditors not to fund him at best, let alone allow you to collect. you already know you're going to have a hard time collecting. be happy he didn't put you through bankruptcy or corporate turnaround.
take what you can get, try to get him funded elsewhere and get paid. sounds like you almost have principle back, so if nothing else transpires cut your losses and move onto the next one learning from your mistake.Last edited by ADiamond; 05-19-2015 at 01:44 PM.
Anthony Diamond
Underwriter
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05-19-2015, 01:43 PM #10
- Join Date
- Jul 2014
- Location
- Jackson Hole Wy
- Posts
- 730
Work with the owner, if he is willing to meet you in person and keep contact and he has plans to turn the business around and pay you then there is no need to bring in attorneys and collection, UNless you have the ability to go after some hard collateral.
I usually let it ride unless they disappear and dont contact us back and make some efforts on payments..
But if you have to work with a syndicate who wants money now and will trigger the collection that is another story. best of luck
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05-19-2015, 02:14 PM #11
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05-19-2015, 02:57 PM #12
- Join Date
- Apr 2013
- Location
- Basalt CO
- Posts
- 867
Sean, i am 100%, and i shouldn't say the syndicater isn't helpful. I was just hoping they would have some better answers. I am talking the admin for the account.
He comes into the office and always gets back to me. He paid me another 1500 this AM.
All is good advice, and yes offering a discount is a good option. I have gotten paid 3 times and made a ton on him. I can give him a break, get my moeny back and some.
Yes, was just referring to more time than i want to, but in the end if i get my money back, i will be happy.
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05-19-2015, 03:26 PM #13
Someone paying you, even if sporadically shows good faith. It sounds like from you that it's really due to financial hardship. Suing him is counterproductive if there is nothing to get out of him beyond what you are already getting. He will just be more broke because he'll need to spend whatever's left on a lawyer. And if he manages to afford one, that lawyer will come up with a bunch of arguments about why they don't have to pay you at all.
That's where you'll really spend your money on, not the filing of the lawsuit itself. Even if you win or get a favorable settlement, the guy's going to be more broke than before.
If he's secretly doing well and just giving you a phony story, that would change everything though of course.
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05-19-2015, 04:04 PM #14
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
It would be interesting to know what the default risk is for each successive advance that a merchant takes. I would assume that every new advance raises the default risk considerably. In this case, the 4th advance was the one that did the merchant in.
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05-19-2015, 04:14 PM #15
I think the % of the refi is probably the better metric.. i have merchant that have taken 10 advances but always wait till almost paid off if not almost paid off. Then other merchant that start calling me when they are 30% paid in.. The first guy can last forever the other guy it is usually just a mater of time. If the merchant is using this type of funding to survive to the next month they are dead if they use it for a specific use that grows the business they will do well
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-19-2015, 04:22 PM #16
But even then, how can one say it was from the advance? In my hometown, just about every small business fails within 5 years, but most within 1 or 2 years. Nobody makes it, yet there is always someone willing to rent out the space the day the previous businesses shuts down. Small businesses there are like speculative short term investments. Make what money you can and then close up or cut your losses and leave. It's not like that everywhere though.
All small businesses eventually fail, that is why very few are celebrating 200 year anniversaries.
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05-19-2015, 04:27 PM #17
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05-19-2015, 04:34 PM #18
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05-19-2015, 04:55 PM #19John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-19-2015, 04:57 PM #20John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-19-2015, 05:00 PM #21
- Join Date
- May 2014
- Posts
- 13
yeah, but you make it up in volume!
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05-19-2015, 05:09 PM #22
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05-19-2015, 05:10 PM #23John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-19-2015, 05:58 PM #24
- Join Date
- May 2014
- Posts
- 13
i was kidding, fellas.
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05-20-2015, 07:28 AM #25
- Join Date
- Jul 2013
- Posts
- 352
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