[KTK]

Have to heavily agree with the last "net net" comment

[RichardGerard]

So if the actual deal was 150k for 24 at 1.15 (roughly $7200 a month) the question is what the client would have qualified for from other lenders? Would have likely been eligible for a Prime plus 2-P and I or LOC through his local bank etc.

This is a very nice deal for clients that don't realize what else is out there for them. As for game changing: my guess is that it isn't. This product line will likely be the 'lost leader' on the ODC menu. I envision them getting more submissions while only approving the 'select' few applications.

[jotucker1983]

Just got a deal done with ODC, insane pricing. Seems they have a new program. This guy got approved up to 300k, out 36 months at a 1.21 paying 5 points.
They just upped the game.
He took 150k, 1.16 paying 5 points. Truly amazing
Better pricing than AMEX.

Skip,

I don't know if I would call it a widespread industry game changer, because the product basically is on par with that of P2P lenders like Funding Circle, and you aren't going to be able to duplicate said product unless you have the infrastructure and marketplace to play in the same realm.

What this does is further expand the newest piece of paper to our space, which is "A+" Paper. "A+" Paper is going to be those Funding Circle type of deals that while they might resemble "bank deals", they aren't bank deals in total, as even though the paper is pretty "clean" there are still a lot of banks that won't touch particular industries, loan sizes or time in business merchants.

[RichardGerard]

Agreed John... There are several lenders that would do that deal for significantly less. However with ODC marketing power and their perceived ease in streamlined approvals, they will likely see more submissions and steer clients to their other slightly less client friendly rates.

[jotucker1983]

Agreed John... There are several lenders that would do that deal for significantly less. However with ODC marketing power and their perceived ease in streamlined approvals, they will likely see more submissions and steer clients to their other slightly less client friendly rates.

I agree, you see that's the appeal of the "A+" Paper lender over the traditional lending system, while the costs are going to be slightly higher (but no where near standard MCA or Alt. Loan costs) you still have the "Fin-Tech Advantage" of the shorter underwriting, processing and closing cycle. You still have the benefit of telling the merchant that you can get the funds in 5 - 7 days or less, rather than the traditional lending system which might take a couple of weeks or even a month.

So the "sell" of the A+ Paper over the traditional lending product, would be based on the "speed" of the process. There's a lot of merchants who will pay a little higher for said level of speed and less red tape.

[Chambo]

Everest is offering 1.15 buy rates, so not that different, except that On Deck is going out much further.

the fact that it is going out twice as long makes it a BIG DIFFERENCE

[skideeppow]

.

Net Net Ondk is reducing rates (fair to say drastically reducing rates) to acquire customers-but there might not be buyers for it. Any ISOs want to syndicate on 1.15 18 mth deal?

Isnt that the truth. No way I would syndicate on that deal. Not because of risk but because i could have my money out in half the time.

[skideeppow]

Skip,

I don't know if I would call it a widespread industry game changer, because the product basically is on par with that of P2P lenders like Funding Circle, and you aren't going to be able to duplicate said product unless you have the infrastructure and marketplace to play in the same realm.

What this does is further expand the newest piece of paper to our space, which is "A+" Paper. "A+" Paper is going to be those Funding Circle type of deals that while they might resemble "bank deals", they aren't bank deals in total, as even though the paper is pretty "clean" there are still a lot of banks that won't touch particular industries, loan sizes or time in business merchants.

With that said, funding circle takes 3-4 weeks to fund. This got done in a couple of hours. In addition, most banks i deal with take forever for underwriting and an approval. I see it as a program that has never been available.

Never mind, read your post after this one.

[J.Celifarco]

I have seen a bunch of both the 24 month and 26 month approvals now and they are fantastic. Me personally I am only pitching them if absolutely needed.. Refi business has already dropped with everything going out 12 and 15 months, go out to 24 and 36 and your refi portfolio will get dramatically worse. Also I wonder if ondeck has taken into account that deals that go out this long are going to have a much higher chance of getting stacked on because you are looking at 1-1.5 years till qualify for additional funds

[FUNd]

I have seen a bunch of both the 24 month and 26 month approvals now and they are fantastic. Me personally I am only pitching them if absolutely needed.. Refi business has already dropped with everything going out 12 and 15 months, go out to 24 and 36 and your refi portfolio will get dramatically worse. Also I wonder if ondeck has taken into account that deals that go out this long are going to have a much higher chance of getting stacked on because you are looking at 1-1.5 years till qualify for additional funds

Yep, and a 2nd position turns OD's clean A+ paper borrower into a C credit, over-leveraged liability.

[Chambo]

really? show me someone who went out 24 months at a 1.16 with 5 points built in. Or a 36 month 1.21. Ive been doing this ten years. No one has ever presented rates like this. So yes game changer.
As for viking doing a 1.15 buy rate that is great, but it is still not a 1.16 24 months with 5 points built in.

Didn't/doesn't CREDIT CASH do deals like this?

[AndyYSCISOdept]

I agree 100% with John, most of the clients that qualify for a 36 month deal will still end up needing money a lot sooner than the 18 months required to qualify for additional cash. This, in my opinion, makes them VERY vulnerable to stacking. I don't care if you give them the money at 5% they still have to pay it back and you can bet that if they need money before the necessary time has elapsed to refi etc then they will take funding elsewhere.

[staten]

I have seen a bunch of both the 24 month and 26 month approvals now and they are fantastic. Me personally I am only pitching them if absolutely needed.. Refi business has already dropped with everything going out 12 and 15 months, go out to 24 and 36 and your refi portfolio will get dramatically worse. Also I wonder if ondeck has taken into account that deals that go out this long are going to have a much higher chance of getting stacked on because you are looking at 1-1.5 years till qualify for additional funds

Their stock has decreased 50% from the IPO, 100s of new entrants with marketing dollars to burn-I think they just want to show origination growth. These deals will get stacked. They are effectively term debt at these durations so its likely working capital from a small advance will be needed at some point.

The big impact will be on refis---the length to refi will be about 4-5 months longer. So-again with net net but they will experience a couple of quarters of origination growth due to demand for lower rates and longer duration but the increase in the time to refi will have a negative impact on origination growth which will hit 2-3 quarters from now.

Regarding stacking----Dealstruck dimissed the suit against next era and both fora and pearl filed for dismissal with some very compelling positions.

[AndyYSCISOdept]

EXACTLY....the issue(s start when the merchants take a second position hits a slow period then takes a 3rd and a 4th to cover the paments on positions 2&3, now it comes time for OD to renew and they look at the statements and go, "WHAT THE HECK WERE YOU THINKING MR MERCHANT? DECLINED" Now the merchant doesn't have their super cheap long term deal and can only get shorter and shorter terms at higher and higher cost.

Responsible borrowing and responsible underwriting / funding go hand in hand.

[staten]

EXACTLY....the issue(s start when the merchants take a second position hits a slow period then takes a 3rd and a 4th to cover the paments on positions 2&3, now it comes time for OD to renew and they look at the statements and go, "WHAT THE HECK WERE YOU THINKING MR MERCHANT? DECLINED" Now the merchant doesn't have their super cheap long term deal and can only get shorter and shorter terms at higher and higher cost.

Responsible borrowing and responsible underwriting / funding go hand in hand.

Right Andy--also remember that even if a merchant isn't stacking, an approved refi will be pushed out by 3-5 months. So "orgination" growth is going to tank in a couple of quarters because of this negative impact. They have to know this.....so expect them to jack up marketing pretty substantially soon.

Lastly-from a securitization perspective, I'm relatively certain that they can't include stacked deals in the collateral pool (yes---they are doing it now--not sure Jefferies is on it). Does anyone know if this is correct...far too lazy to research today.

[tommy]

I don't post, I'm too busy closing deals. But when a funder deserves credit I will give it. I got offers from the powerhouses in the industry and all they really were are deleted emails.

I got a 12 month 150k offer with a weekly option. No pnl, no Bal sheet, no site inspection, no payback months. no back dooring my deal, no bull****.

They came in with best length and factor. If it wasn't construction it would of been 18 months. And the merchant can still go back and take more of the approval. Only took 80 of the 150k approval.

Got offer last night at 5 and just closed at 11:30am

Oh and I beat the big name funders.
If you have a good merchant file than take him to Quarterspot. You will keep he merchant forever.

They are now doing 550 fico scores. They will payoff 2 to be in first. They can give bigger offers because the longer the deal the lower the daily the better the % paid out ratio is.

If your tired of the bull**** with the big names than try something different, do business with a company that wants to do business, not get your deals and decline them or give you insulting offers and Backdoor your deal.

[Michael I]

so tommy are you saying on deck did something wrong . or you just felt like promoting them on aondeck thread that offered 36 months .

[WhoisKingsley]

I didn't know you could post a post within a post like that.

You just pulled a Kayne on OnDeck. smh.

[FCF Fund]

I just love their online checkout....its like they are the Jimmy Johns of MCA lol

[FUNd]

I just love their online checkout....its like they are the Jimmy Johns of MCA lol

..

[mcg168]

I have seen a bunch of both the 24 month and 26 month approvals now and they are fantastic. Me personally I am only pitching them if absolutely needed.. Refi business has already dropped with everything going out 12 and 15 months, go out to 24 and 36 and your refi portfolio will get dramatically worse. Also I wonder if ondeck has taken into account that deals that go out this long are going to have a much higher chance of getting stacked on because you are looking at 1-1.5 years till qualify for additional funds

I completely agree with this. CAN, BFS, ONDK have been rolling out longer programs, but most of the time I find that the merchant usually elects for 12, 15, 18 month programs.

Even with the 18 month program, I find so many that are ready to renew at 6-9 months, but do not qualify. 3 years is much too long for 99% of the businesses we work with.