[TheShitzuofMCA]

Shows a lack of carelessness on the funding companies part and the merchant to some extent (stacking), most funders trying to do good business will stay within the percentages of 2nd-3rd positions (15-30%) max MCA collection. You have the predators who don't care and will go over the 30% threshold with no regard for the business in question. I've had merchants with 2 positions already at 42% MCA. An honest merchant caught in this 42% MCA collection has the option of either defaulting cause they start to overdraft too much of their monthly revenue is taken or take out another MCA advance and buy more time with the hopes of a big advance taking everyone out and having 1 payment (pipe dreams). Most I've seen with the help of smooth talking brokers fall into this trap and are stuck in a cycle of MCA's were one pays the other off every other month taking on a new advance. Ive seen many cases like this and it has gotten worse over the years. No one talks about all the fees and secondary brokerage fees that also put the funding companies money at risk some of these as high as 8% at closing. Yes eventually this bubble will burst too...

[J.Celifarco]

Shows a lack of carelessness on the funding companies part and the merchant to some extent (stacking), most funders trying to do good business will stay within the percentages of 2nd-3rd positions (15-30%) max MCA collection. You have the predators who don't care and will go over the 30% threshold with no regard for the business in question. I've had merchants with 2 positions already at 42% MCA. An honest merchant caught in this 42% MCA collection has the option of either defaulting cause they start to overdraft too much of their monthly revenue is taken or take out another MCA advance and buy more time with the hopes of a big advance taking everyone out and having 1 payment (pipe dreams). Most I've seen with the help of smooth talking brokers fall into this trap and are stuck in a cycle of MCA's were one pays the other off every other month taking on a new advance. Ive seen many cases like this and it has gotten worse over the years. No one talks about all the fees and secondary brokerage fees that also put the funding companies money at risk some of these as high as 8% at closing. Yes eventually this bubble will burst too...

how is taking 20%-30% of a merchants total revenue considered responsible.. The amount of business that can afford a payment like that and stay in business is very very short. Also once the second company takes the payments to that level it makes all the underwriting the 1st position bank did useless. They based their offer on where the merchant was and where they thought they would be financially during the course of the program they offer.. You throw a second or third position in the mix and everything the 1st position bank did to underwrite the file becomes useless.
The other side of this that drives me crazy are the amount of refi's I lose. Someone comes in behind me on a deal I funded with second or third position and now I cant get the 1st position bank to refi because they are afraid the other banks will just fund behind again.. Stacks have cost me more refi's then any other factor out there

[jotucker1983]

John Celifarco,

Yes, I have had this issue as well and it ticks me off that the Funders seemingly do nothing to stop this. So check out this logic here:

- As a Broker, I'm not allowed to do any stacks on any merchant that I bring to said Funder per my Agreement with said Funder or I might be cut off from renewals. YET, my Funder has no such agreement for the Merchant, telling them that they can't stack with a competing Broker/Funder or they might have certain fines or sanctions. The worse that can happen to the Merchant is that they won't renew him, but the Merchant doesn't care because there's 40 other companies calling him a month anyway.

- So a competing Broker down the street from me, can come in and stack on my merchant any day of the week if my Merchant accepts it, without me knowing anything about the situation until after the fact.

- Come renewal time, we request statements, and see there's two other companies stacked on top of the merchant. So my Funder declines the merchant for stacking. However, the competing Broker that stacked would either then stack him again or approve him high enough to pay off my Funder's balance and TAKE my client.

Who loses in this situation? That's right, I DO, and the Funders don't give a damn about it as I'm just "one lowly independent agent" and they have hundreds of other agents/brokers sending them deals. So THEY will be okay, it's "John Tucker" that must scramble at this point.

Every Funder needs to add a "no stacking amendment" to the Funding Agreements on a separate page that clearly states that if you stack on our deal, you would have $5k - $20k added to your total balance for EACH stack you do. So if the merchant goes out and stack 3 advances on top of our deal, he might be looking at $15k - $60k added to his total balance. Doing this would clean up the insanity overnight because the merchant isn't going to want to pay the $5k - $20k per stack.

[J.Celifarco]

John Celifarco,

Yes, I have had this issue as well and it ticks me off that the Funders seemingly do nothing to stop this. So check out this logic here:

- As a Broker, I'm not allowed to do any stacks on any merchant that I bring to said Funder per my Agreement with said Funder or I might be cut off from renewals. YET, my Funder has no such agreement for the Merchant, telling them that they can't stack with a competing Broker/Funder or they might have certain fines or sanctions. The worse that can happen to the Merchant is that they won't renew him, but the Merchant doesn't care because there's 40 other companies calling him a month anyway.

- So a competing Broker down the street from me, can come in and stack on my merchant any day of the week if my Merchant accepts it, without me knowing anything about the situation until after the fact.

- Come renewal time, we request statements, and see there's two other companies stacked on top of the merchant. So my Funder declines the merchant for stacking. However, the competing Broker that stacked would either then stack him again or approve him high enough to pay off my Funder's balance and TAKE my client.

Who loses in this situation? That's right, I DO, and the Funders don't give a damn about it as I'm just "one lowly independent agent" and they have hundreds of other agents/brokers sending them deals. So THEY will be okay, it's "John Tucker" that must scramble at this point.

Every Funder needs to add a "no stacking amendment" to the Funding Agreements on a separate page that clearly states that if you stack on our deal, you would have $5k - $20k added to your total balance for EACH stack you do. So if the merchant goes out and stack 3 advances on top of our deal, he might be looking at $15k - $60k added to his total balance. Doing this would clean up the insanity overnight because the merchant isn't going to want to pay the $5k - $20k per stack.

I dont disagree and I think a lot of lenders want to do something along these lines. The problem lies in the legality of it and if it will hold up if taken to court. I think the outcome of the torturous interference cases in court now will determine how banks handle going forward. If it is legal and it will hold up in court I would love to see banks do something like this

[Michael I]

John Celifarco,

Yes, I have had this issue as well and it ticks me off that the Funders seemingly do nothing to stop this. So check out this logic here:

- As a Broker, I'm not allowed to do any stacks on any merchant that I bring to said Funder per my Agreement with said Funder or I might be cut off from renewals. YET, my Funder has no such agreement for the Merchant, telling them that they can't stack with a competing Broker/Funder or they might have certain fines or sanctions. The worse that can happen to the Merchant is that they won't renew him, but the Merchant doesn't care because there's 40 other companies calling him a month anyway.

- So a competing Broker down the street from me, can come in and stack on my merchant any day of the week if my Merchant accepts it, without me knowing anything about the situation until after the fact.

- Come renewal time, we request statements, and see there's two other companies stacked on top of the merchant. So my Funder declines the merchant for stacking. However, the competing Broker that stacked would either then stack him again or approve him high enough to pay off my Funder's balance and TAKE my client.

Who loses in this situation? That's right, I DO, and the Funders don't give a damn about it as I'm just "one lowly independent agent" and they have hundreds of other agents/brokers sending them deals. So THEY will be okay, it's "John Tucker" that must scramble at this point.

Every Funder needs to add a "no stacking amendment" to the Funding Agreements on a separate page that clearly states that if you stack on our deal, you would have $5k - $20k added to your total balance for EACH stack you do. So if the merchant goes out and stack 3 advances on top of our deal, he might be looking at $15k - $60k added to his total balance. Doing this would clean up the insanity overnight because the merchant isn't going to want to pay the $5k - $20k per stack.

So true it's a debate I have every day . I have yet to ever stack one of my own deals as to not hurt the relationship I have with the lenders .
But I also am getting less and less renewals statement back and not seeing a stack on them . Merchants get hundreds of phone calls and some even pose as the same company that funded them other division.
Hitting the pockets might hurt the bigger stackers but the new ones popping up out of the toilet. probably have a hundred different judgment and criminal history on them