[SCP]

I appreciate all of the valuable feedback and agree fully that IF you're going to engage in 2nd+ positions, you must do it ethically. I hope that most of us entered the industry because we wanted to make solid earnings but also because we have a heart for the small business owner, and that needs to take precedent. There's a time where you have to draw the line and just walk away from a deal, at least until that business can transition in the future.

In reference to this specific deal, SCP does not usually market to 2nd position merchants and I can count the number of merchants we've helped in this regard on two hands. Considering our preference for 1st time / 1st position merchants, all of this comes as news to me, and again I appreciate the feedback!

[Chambo]

I appreciate all of the valuable feedback and agree fully that IF you're going to engage in 2nd+ positions, you must do it ethically. I hope that most of us entered the industry because we wanted to make solid earnings but also because we have a heart for the small business owner, and that needs to take precedent. There's a time where you have to draw the line and just walk away from a deal, at least until that business can transition in the future.

In reference to this specific deal, SCP does not usually market to 2nd position merchants and I can count the number of merchants we've helped in this regard on two hands. Considering our preference for 1st time / 1st position merchants, all of this comes as news to me, and again I appreciate the feedback!

ha! that's a laugh.

Anyone who does a third position (or more), or charges a Closing cost, "Professional Service Fee" or the like has absolutely no regard for the merchants' help. "Let me make my money and get in and get out"

[CreditGuy]

IF you're going to engage in 2nd+ positions, you must do it ethically.

If you are trying to stack, you have already abandoned any scintilla of ethics and are fooling yourself if you think otherwise.

[J.Celifarco]

If you are trying to stack, you have already abandoned any scintilla of ethics and are fooling yourself if you think otherwise.

not to get off topic here but "scintilla" EXCELLENT WORD

also I both agree and disagree with this statement. Anyone who see'e my posts on here I think knows how I feel about stacking that said there are situations where it can make sense for the merchant. If the 1st position is taking a very small amount of gross sales and the payments on the second position keep the gross holdback under 15% then I dont think it is terrible. To that point this is a very small % of the time but when it does you are able the save the merchant from paying interest on interest on the first position.. Also if companies are going to start penalizing merchants who do stack with fee's or penalties then even that one situation will no longer be ok..

[SCP]

If you are trying to stack, you have already abandoned any scintilla of ethics and are fooling yourself if you think otherwise.

I'd say that's a little strong...

As I mentioned before, obviously stacking is not the premier scenario for lender or borrower, but it can make sense and I believe there's instances you can do it with a clear conscience. For instance, this exact thread revolves around a client that has seen astronomical growth over the past 8 months (right around 300% increase revenue since January alone) and that's largely due to the initial advance they received from Fora, as the use of funds was for marketing and a new location. Now the desired use of funds is for an inventory purchase to secure a better purchase price on bulk orders. Which makes sense because the demand for their clothing lines has increased. I personally have no shame in seeking a solution for them. They've shown great recourse through the previous advance, and I hope they do the same again!

[jotucker1983]

I'd say that's a little strong...

As I mentioned before, obviously stacking is not the premier scenario for lender or borrower, but it can make sense and I believe there's instances you can do it with a clear conscience. For instance, this exact thread revolves around a client that has seen astronomical growth over the past 8 months (right around 300% increase revenue since January alone) and that's largely due to the initial advance they received from Fora, as the use of funds was for marketing and a new location. Now the desired use of funds is for an inventory purchase to secure a better purchase price on bulk orders. Which makes sense because the demand for their clothing lines has increased. I personally have no shame in seeking a solution for them. They've shown great recourse through the previous advance, and I hope they do the same again!

I agree that there are situations when it makes "sense" from a cashflow standpoint. For example, if the merchant's 1st position lender has a required "60% paid down" metric, the 1st position deal isn't taking a significant portion of their monthly gross, the merchant's current level of sales/cashflow management could support a 2nd position, and the 2nd position is going to be strategically structured to easily "fit in" the sequence, with both payments still being relatively "efficient" in terms of the pull on the monthly gross.

However, making "sense" from a cashflow standpoint, does not mean the stack wouldn't violate the Agreement put in place by the 1st position holder.