Results 51 to 75 of 143
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02-02-2016, 08:26 PM #51
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02-02-2016, 09:02 PM #52
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- Apr 2015
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- Louisiana
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- 299
New Favorite -- Wall Funding
The "moral compass" may not be the ISO's job but if the iso stacks a merchant knowingly breaching the contract they currently have in place with another lender where they have a no stacking clause in their contract is moral turpitude. Sure. You may make a quick buck. But guess what, eventually the sh@* will roll down hill to you. It has happened before in the mortgage industry and it will eventually happen in this industry. If an iSo is that desperate to close 1 deal, then they will not survive in this industry. That's the same iso who closes a deal and then is begging for commissions to be paid the same day before their car gets repossessed or their electricity gets turned off.
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02-03-2016, 09:09 AM #53
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- Jan 2014
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- 1,378
I see lenders all the time on here stating what they do criteria, loan amounts, go out to 3rd 4th 5th position etc. etc. etc. no one ever jumps down their throat, most of the time they get praise for getting tough deals done for example Yellowstone (I have nothing against them by the way we I am just stating what i've seen). Or anytime someone post where to take a 3rd position deal, other agents refer them to lenders that will do it. What is so different about this post?
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02-03-2016, 09:30 AM #54
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- Oct 2013
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02-03-2016, 09:34 AM #55
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- Jul 2014
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- Online
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Sometimes you are working with a Merchant who "Needs" more capital. They weren't fished for- they actually contacted the representative that helped them X amount of times before that. It's not always bad business. Sometimes it's a quick bridge they need for inventory or shipping costs or just to make payroll until something clears. Sh*t happens to people and we all have to realize (titles aside) that we are all human trying to survive and we have to do what we have to do. Those in this industry that are using predatory tactics of exploiting the "stacking" of MCAs are not exposing them for the right cause. It should be there if there is a NEED and obviously- if they qualify for it.
Right now I need a second position for a Merchant. I tried to get an extension with the 1st- but no go. I explained the situation on how they needed more- they openly said "try _______". YES YOU READ THAT CORRECTLY. In the correct situations it is totally understandable to have a 2nd or possibly 3rd... I don't know about a 4th. I have Funded a 7th once. It's all a case by case and it's always a weird situation that you just have to feel out for yourself. You also have to think- If I don't get it done, someone else will. My willingness to not help the customer when something IS legally available (even though it may not be healthy for the business) even though your ethics are questioned- you have to think of keeping your portfolio in this industry of hyenas. It's eat or be eaten at this point no matter how ethical you are. You just have to go through the motions and be as confident in your decisions and CYA (<- Cover Your @$$)Amanda Kingsley
DailyFunder: WhoisKingsley
This is me. https://www.facebook.com/whoiskingsley
I am Here too. https://www.facebook.com/groups/TheClosersGroup
Always Live and Lead with Integrity.
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02-03-2016, 10:11 AM #56
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02-03-2016, 10:16 AM #57
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02-03-2016, 10:19 AM #58
Michael Most regular financing is over much longer periods of time and the payments on those loans generally work out to 5% or lower then the total gross sales. In our space most 1st position lenders are comfortable taking 10%-14% of the gross sales as payment. When you get into second positions now that number is in the 20's.
If you go out farther then that you are getting to a point where you are taking 30% or more of a persons gross sales to pay back these loans. Most business's can not afford that and the only way to stay in business is for them to keep taking loans until they go out of business. If a broker knows this and dos it anyway they are wrong. You are screwing over the banks who gave the first loans making what was a good deal a default and you put the merchant in a position they could not sustain. It is not double standards what is should be is common sense. If none of this matters and bottom line you just want to fund the deal and get paid your commission. Think about what happens when you get sued by the 1st position bank when a deal with a big enough balance for them to care defaults. They sue then lender and the broker for tortuous interference. I willing to bet the commission wont cover that.Last edited by J.Celifarco; 02-03-2016 at 10:31 AM.
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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02-03-2016, 10:31 AM #59
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- Jun 2015
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i am referring to the no stacking clause where people are saying its illegal to stack . All lenders will fund regardless of that and put it in their contracts and then get pissed that they were stacked . i saw a contract of someone who did a fifth have that same crap as swift of all these fees if he stacks . i had someone get in trouble from their trucking factor for taking out a credibly loan as it was a breach in contract
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02-03-2016, 10:32 AM #60Wall Funding ISO Team
646-979-2161
partners@wallfunding.com
http://wallfunding.com/
30 Broad St, New York, NY, 10004
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02-03-2016, 10:48 AM #61
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- New York, NY
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- 1,780
Last edited by MCNetwork; 02-03-2016 at 10:52 AM.
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02-03-2016, 11:00 AM #62John 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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02-03-2016, 01:34 PM #63
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- Jun 2014
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- 59
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02-03-2016, 01:55 PM #64
New Favorite -- Wall Funding
Blue chip funders....lol
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02-03-2016, 01:58 PM #65
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02-03-2016, 02:01 PM #66
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02-03-2016, 02:04 PM #67
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02-03-2016, 02:07 PM #68
Considering how the other "Fin Tech" (a misnomer extraordinaire if you ask me) companies are performing, I wouldn't want to get lumped in with them under any circumstances
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02-03-2016, 02:10 PM #69
I know, OnDeck and Lending Clubs stocks have totally dropped. Quick thought, since Ondeck is selling their loans instead of keeping them on their books, I wonder how long until 'The Big Short 2' is describing bundling up alternative business loans?
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02-03-2016, 02:30 PM #70
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- Sep 2014
- Posts
- 430
Let's do some quick math and a little actual underwriting.
It was previously disclosed that this was a $40MM+ home health care business and they needed to stack because of slow pays from the government (Medicare). That means this is being used a bridge loan and not growth capital, so revenue benefit to the borrower is null. The industry average net income for publicly traded (professional management, huge economies of scale, data driven and efficient business decisions, etc.) Medicare home health care is around 3% (citation) and falling as ACA cutbacks drive reimbursement rates lower as a % of gross revenues. This can change slightly based depending on payer mix (Medicare/Insurance/Private Payer). Since we know this is a Medicare bridge, we will use 3% net income. That means a business this size, in this industry, puts $1.2MM to the bottom line annually. If an average 1st will fund 15% of revenues, and average 2nd funds up to 20-25%, and the 3rd and 4th are just seeking to keep it under 30% of daily revenue, how is lending almost 10x net income ("dailys...below 30%") to this business of any benefit to the borrower? 30% of daily revenues would be $47k a day (holy ****!) or 12MM per annum. Compare that to the net income of $1.2MM a year and this scenario is a loser. Now, it is possible that since this is "just over 6 months" in term, this one alone won't put them immediately out of business, but the merchant paying back more than $1.2M principal and interest at any point over the year wipes out their net income entirely. This type of lending isn't subject to underwriting in any traditional sense, it is gambling that your money comes back before the house of cards collapses. It is predatory and reckless.
I made a lot of assumptions because I don't have all the facts (banks, financials, etc.). It is possible this business is an absolute gold mine run super efficiently with 30% margins and has $12M in free cash flow a year, but those folks aren't stacking MCAs like pancakes. Hell, even if this had 4x the margins of the industry average with 12% net income, anything north of 24% daily for more than 6 months would wipe out their entire profit for the year.
Not only of the ethics of the transaction are poor, but the math sucks too.
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02-03-2016, 02:41 PM #71
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- Jul 2014
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- Jackson Hole Wy
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- 730
I tend to agree with this. We have funded a dozen or so health care business with revenues 15M+ in the past. The guys with 25% + margins are few and not MCA candidates, and never would stack. We qualified one for 1.5M LOC and they were only at $5M gross. Not sure what would drive a 40MM+ revenue company to get 4 MCAs not many with margins over 75%! but that is for another day
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02-03-2016, 02:47 PM #72
If the client defaults, I will let everyone know. If they arrange the real financing they are looking for within the next 3 months, and then pays us off, I will still let everyone know. Until then, lets all relax about this deal.
Wall Funding ISO Team
646-979-2161
partners@wallfunding.com
http://wallfunding.com/
30 Broad St, New York, NY, 10004
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02-03-2016, 02:56 PM #73
- Join Date
- Mar 2015
- Location
- Boynton Beach
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- 3,502
Go ask Santander bank how it worked out for them.....
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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02-03-2016, 02:57 PM #74
New Favorite -- Wall Funding
No IPO for us...we are just concentrating on growing and doing as much good business as possible!
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02-03-2016, 03:05 PM #75
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- Sep 2012
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- New York, NY
- Posts
- 1,780
Spoken like a true underwriter!
I'm all for making money in this industry. It's hyper competitive out there and it's tough to make a decent living if you're a small ISO. But when pop-up stack funders come into this space with their bull**** underwriting criteria and start causing merchants to default on their 1st position funders because they think taking 30% of their monthly gross makes perfect sense, then that's where you have to draw the line.
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