[Funder Mark]

I got a deal that has a funny story. In August this client got funded from OnDeck, and for each of the last 4 months they have had more withdrawals then actual deposits. The client was approved by one of the B paper guys for $32k with a 1.32 for a 2nd, but declined by one of the D paper funders. Its a funny situation I personally have not seen before. Now I can see why the D company declined the deal, but how did the B company give that offer? It is a solid one with a signed contract already. To me its funny how different companies have entirely different underwriting ideas. Do any of the respected, knowledgeable members of the forum have any ideas how this happened?

[FUNd]

I got a deal that has a funny story. In August this client got funded from OnDeck, and for each of the last 4 months they have had more withdrawals then actual deposits. The client was approved by one of the B paper guys for $32k with a 1.32 for a 2nd, but declined by one of the D paper funders. Its a funny situation I personally have not seen before. Now I can see why the D company declined the deal, but how did the B company give that offer? It is a solid one with a signed contract already. To me its funny how different companies have entirely different underwriting ideas. Do any of the respected, knowledgeable members of the forum have any ideas how this happened?

I'm neither respected nor knowledgeable, but with the info provided I would guess the industry would have something to with it. Some B lenders love home-based construction or transportation for example, while some D guys are deathly afraid of it. Just a guess obviously since you didn't mention the industry but has happened to me multiple times.

[Michael I]

yes very easy . Most d paper look at the last 3-4 months only so if they are low then nothing to do . B lenders will look at the whole year and take that average to fund .
also mark side note ,signed contracts mean nothing .

[FUNd]

yes very easy . Most d paper look at the last 3-4 months only so if they are low then nothing to do . B lenders will look at the whole year and take that average to fund .
also mark side note ,signed contracts mean nothing .

Who asks for 12 months banks for non-seasonal businesses? Just curious.

[Funder Mark]

Not seasonal, credit is good, has years left on business location lease, nice industry. I guess the idea is that different funders have different terms, and go out to different lengths. If the B guy is going 8 months, they are buying less of each months future revenue, while the D one is buying a larger chunk of the next few months, os that does make sense. Also, if you are going out for a longer period of time, credit probably becomes more important, then it would to the D guy.

[AndyYSCISOdept]

As someone who dabbles in the B- to F range I can tell that a lot of the points you've made are correct. However, I'd like to add something that some of you may not have considered. When a D paper shop gets a deal as clean as what you have said, and the only other balance is OnDeck, sometimes they kill the deal knowing that taking the time to fully underwrite when their offer will be completely destroyed, by the other 5-10 funders looking at the file, is a practice in futility. A lot of times I ask myself, what is wrong with this file? On the surface it appears flawless, do I want to invest time in it knowing full well that I'll have to go way out of my comfort zone to get the merchant to go with me?

[FUNd]

Not seasonal, credit is good, has years left on business location lease, nice industry. I guess the idea is that different funders have different terms, and go out to different lengths. If the B guy is going 8 months, they are buying less of each months future revenue, while the D one is buying a larger chunk of the next few months, os that does make sense. Also, if you are going out for a longer period of time, credit probably becomes more important, then it would to the D guy.

In the case of good credit and a great industry, I see no reason a D guy wouldn't make an offer. YSC will approve anyone, send it to them.

[AndyYSCISOdept]

In the case of good credit and a great industry, I see no reason a D guy wouldn't make an offer. YSC will approve anyone, send it to them.

That's sorta true. I must stand up and be counted! Send it over if you need an offer. Contact info below.

[FUNd]

That's sorta true. I must stand up and be counted! Send it over if you need an offer. Contact info below.

Hey, sorta is unacceptable, look to the right: "We can fund ANY deal" is right in the sponsor column. No but seriously, YSC has approved some ridiculous files for me and made me a lot of money. Try them out.

[AndyYSCISOdept]

Noted. I just didn't want to set myself up for failure, yah know that whole, "Keep expectations low and you're never disappointed" thing.

[HDF]

Maybe it was an Everest deal. This month they offer 1.20 buy rate with 550 Fico/12 mo in biz. 15pt max upsell. That might explain it.

[AndyYSCISOdept]

They're offering that on a second position deal?

[CaptainCash]

For a second position deal?

[Funder Mark]

Not Everest.

[Funder Mark]

Actually good question, I would love to know if the prices Everest is offering are only meant for 1st positions, or for 2nd and 3rd as well.

[Michael I]

Who asks for 12 months banks for non-seasonal businesses? Just curious.

The ones smarter than the average bear . i had a restaurant which is not a seasonal business generally, doing way better in payback months . Now 2 ways you can look at it . either they are doing worse so decline or they are seasonal . Your job is to know which lender will think which way .

[HDF]

Sorry I took you off topic. But Everest says that the promotional rate is good for a 2nd position if the merchant qualifies. Not good for their A paper 1.15 br/620 Fico/12 month promo offer though.

[Zach]

Sorry I took you off topic. But Everest says that the promotional rate is good for a 2nd position if the merchant qualifies. Not good for their A paper 1.15 br/620 Fico/12 month promo offer though.

1.15 buy rate for 12 months through Everest?

[HDF]

Sorry Zach. 8 months, 12 months in business

I sent you a PM recently about something else we should talk about...

[Everest]

We offer a 1.15 buyate for a first position deal, min fico of 620 and 12 months in business, 15 points Max Upsell. This is for an 8 month term, max deal size is $500,000.