Results 26 to 50 of 53
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01-04-2016, 02:24 PM #26
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Let me respond in pieces...
1. I thrive and flourish on the responses, yes. There are a lot of contradictions and overall conflicts that will not be fixed, innovated, or stopped if someone didn't be that person. Sometimes I chose to be that person. So yes Andy, I deserve every response coming from it all lol!
2. I'll go over with you via email on the last contract and you can clear the air.
3. My old agreement I had. Keep in mind- these were my OWN originated deals. Not brokered so I didn't care too much. Relationships and knowing where my deal was and that it wasn't going anywhere was enough for me
4. Your team has been great so far! No problems, very transparent... I heart YSC. I guess it's just the fact that all teams are different with different pricing throws everyone off when they read one thing and see another.
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01-04-2016, 02:26 PM #27
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01-04-2016, 02:33 PM #28
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01-04-2016, 03:52 PM #29
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01-04-2016, 03:57 PM #30
Definitely the merchant who sends in fraud docs.
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01-04-2016, 03:58 PM #31
as a lender why would I make my processing fees $0 to justify the ISO charging a PSF on top of the commission I'm paying them? that is the most absurd thing i've heard of.. if the merchant doesnt want to pay the broker fees and wont do the deal then leave it up to the ISO to know that to get the deal done, he has to settle for the commission he's being paid and not be greedy. lenders have expenses also, so for a lender to drop their fees so the iso can go ahead and charge a 10% fee on top of the commission is ridiculous.Anthony Diamond
Underwriter
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01-04-2016, 04:06 PM #32
Good point, but what about funders who charge crazy fees? I have seen offers which came with a 10% fee.
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01-04-2016, 04:20 PM #33
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01-04-2016, 04:23 PM #34
funder mark-
at the end of the day lenders fees are probably negotiable, just like the ISO's PSF.
lenders charging that much can get away with it because theyre probably giving a 6 figure 5th-6th position offer (example) when no one else will.
if the rep can get the same offer from another lender with less fees, watch how quick that original lender will drop their fees.
this is such a competitive, over-saturated space right now - people are learning from everyone else's mistakes. i give an offer for 20k, rep brings back a contract for 25k, i bump mine up to 26,500. they're charging $705 in fees? I'm charging $649.
if lenders aren't willing to work with their ISO's to close deals then they may as well close their shop. and that relationship goes both ways.
Michael I-
No, My issue is the lender dropping their fees to $0 so the rep can sell his PSF. did you read the original post before you let your fingers talk?Anthony Diamond
Underwriter
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01-04-2016, 04:24 PM #35
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Look there are two ways to look at this.
1. Either you both charge a reasonable fee for service (Broker and Funder) OR....
2. You both agree that the factor rate and the agreed commish are enough to satisfy you pocketbooks hunger and move on
Don't try and out maneuver one another and get one to lower their fee while taking the whole of yours.
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01-04-2016, 04:37 PM #36
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01-04-2016, 04:38 PM #37
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Easy with the F word there Chambo, because you KNOW. LOL...
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01-04-2016, 04:39 PM #38
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01-04-2016, 04:45 PM #39
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01-04-2016, 04:46 PM #40
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01-04-2016, 04:47 PM #41
the key word here in the post is "REASONABLE" I am not talking about you particularly Andy because honestly i have no idea what you charge, but when it is reasonable I have no problem but if a lender wants to charge north of of a 1.40 any fee that is more then a couple of % points is not reasonable. Also Any bank that changes the fee base don the deal I think is insane. When i sign up with a bank I want to know what fees they charge upfront and I expect that to be consistent across the board. Fees should not change based on risk on a deal a fee should be consistent across the board all deals that a funder does. Risk should effect the factor rate and term on a deal a fee is a % and or dollar amount that a funders deems fair for the work that they do on a deal
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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01-04-2016, 04:52 PM #42
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I an appreciate that. However, if you are having me do something outside of my comfort zone because we have a relationship (which you and I both preach about tirelessly) would it not be okay for me to charge a 4% fee versus 3% because of my inherent risk due to the fact that I'm scared of this deal defaulting?
Before everyone says, YOU SHOULDNT FUND THE DEAL THEN, consider this...If we follow that ine of thinking, a TON of larger funders would be out of business if they killed a deal because they thought it was risky and didn't do a solid for that broker that sends a ton of business their way.
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01-04-2016, 04:58 PM #43
put the % in the factor or handle the risk by shortening the term. In my opinion a fee should be a set % or $ amount for services rendered and should have nothing to do with the risk on a deal. Just from a sales perspective when the fee changes from deal to deal makes it impossible to properly set expectations for a merchant. I know going in to 99% of the deals I do that is a merchant asks me are there any extra fees or costs I can answer the question honestly because I know what the banks I work with charge on any deal I fund with them. If the number changes deal to deal then I can be honest with the merchant which puts me in a bad spot
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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01-04-2016, 05:02 PM #44
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See typically the way I do it is, when I send you a pre approval it looks like this...keep in mind total example
Funded Amount- 25,000
Daily payment $299
Payback Amount - 36,000 (1.40FR)
Fee/Origination - 750 (Merchant Nets 24,250)
That tells the ISO (In my humble opinion) exactly what I feel the merchant is worth to me and can handle, you want to charge above and beyond... go head.
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01-04-2016, 05:27 PM #45
just different ways of looking at it. Being up front with it helps I just think by the way a deal is structured term and factor equate to the risk and a fee is a set amount for work done on all deals back end expenses cost of underwriting etc. As a funder you can charge what you want and set yourself up however you like you take the risk funding deals so you can do as you will. Me as someone who is submitting deals a set fee is something I do look for when looking at different banks
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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01-04-2016, 05:45 PM #46
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To look at it another way, think like an accountant. The deal itself and the cash flows (P&I) that stem from it post funding, should cover all the credit risk; hence, the point John is making that the capital at risk, duration, and pricing should live in the deal since these are the three main mitigants of credit risks. The o-fee is booked to general revenues upon funding to cover overhead/originations costs, so it lives outside the deal and should be static.
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01-04-2016, 06:23 PM #47
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01-04-2016, 06:36 PM #48
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no 150% is not enough when they renew they need to double the interest and make it 300% . I never understood that since i started in the industry . He is a good merchant been paying , logic says give him a better deal . but no they need to charge him double interest and screw the merchant loyal to them in the *** . Then they complain that he stacks when that was the cheaper option for him
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01-04-2016, 06:52 PM #49
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Supply and demand. When merchants stop paying the rates, the investors will either lower their cost of funds or lower their flags and go home. Until then, the cost of these instruments will stay where they are.
Same reason crack is $20 a rock and not $2. It's what people will pay for it.
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01-04-2016, 09:13 PM #50
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- Dec 2013
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- 205
The FED plans to raise interest rates to 3.3% by 2019. It makes me shudder to think of how that will impact the industry. What's going on now is that fewer people are starting businesses, more businesses are failing more rapidly and toss in higher cost of capital for everyone (funders and merchants), things will get interesting. There will certainly be more defaults and a lot fewer successful brokers. I struggle to see how the industry can have sustainable growth into the next decade without shifting the tectonic plates around a bit... just my two cents.
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