[dpFund]

There have been some threads going around the forum lately about the ethics of stacking.

As many people here know, I do a lot of consolidations. We have helped (and continue to help) a lot of companies that got their necks in a noose with daily payments that were beyond their ability to pay. It is their own darned fault for getting in that position, but there are a number of them we can help.

But a deal came up today that we declined coming out of the gate and I thought it was worth sharing here.

The client has eight positions which in of itself is not a deal killer for me (I have consolidated eight positions several times). Three of the positions were funded in mid-late December (within a few days of each other) and one was from November. The client had inserted a note, stating that in the first week of January they put a stop payment on all daily loan payments and had retained a company to negotiate discounted payoffs.

The way I look at this...the client probably went out and solicited a bunch of MCA lenders (several of which are represented in this forum) all at the same time so the credit inquiries might not show up, accepted funding from as many as they could get qualified from and then within a few short weeks they are defaulting. This clearly seems pre-meditated.

Even though the numbers were appealing and I might have been able to do the deal, I declined.

There may be degrees of separation here...but I don't mind helping clients out of a bind on back on the road solid money management. But I won't touch a client that appears to be knowingly and willingly setting lenders up for default. IF they will do it to them, they will do it to me.

I may be setting up a firestorm here, but am curious about how others feel about scenarios like this.

Dan Page
dan@fundingstrategypartners.com

[J.Celifarco]

There have been some threads going around the forum lately about the ethics of stacking.

As many people here know, I do a lot of consolidations. We have helped (and continue to help) a lot of companies that got their necks in a noose with daily payments that were beyond their ability to pay. It is their own darned fault for getting in that position, but there are a number of them we can help.

But a deal came up today that we declined coming out of the gate and I thought it was worth sharing here.

The client has eight positions which in of itself is not a deal killer for me (I have consolidated eight positions several times). Three of the positions were funded in mid-late December (within a few days of each other) and one was from November. The client had inserted a note, stating that in the first week of January they put a stop payment on all daily loan payments and had retained a company to negotiate discounted payoffs.

The way I look at this...the client probably went out and solicited a bunch of MCA lenders (several of which are represented in this forum) all at the same time so the credit inquiries might not show up, accepted funding from as many as they could get qualified from and then within a few short weeks they are defaulting. This clearly seems pre-meditated.

Even though the numbers were appealing and I might have been able to do the deal, I declined.

There may be degrees of separation here...but I don't mind helping clients out of a bind on back on the road solid money management. But I won't touch a client that appears to be knowingly and willingly setting lenders up for default. IF they will do it to them, they will do it to me.

I may be setting up a firestorm here, but am curious about how others feel about scenarios like this.

Dan Page
dan@fundingstrategypartners.com

I completely agree with you. That sounds like a bad deal. If you did consolidate him I wouldn't be surprised that within the next month or 2 he was back up to 8 positions then would probably stop the payment again

[Michael I]

There have been some threads going around the forum lately about the ethics of stacking.

As many people here know, I do a lot of consolidations. We have helped (and continue to help) a lot of companies that got their necks in a noose with daily payments that were beyond their ability to pay. It is their own darned fault for getting in that position, but there are a number of them we can help.

But a deal came up today that we declined coming out of the gate and I thought it was worth sharing here.

The client has eight positions which in of itself is not a deal killer for me (I have consolidated eight positions several times). Three of the positions were funded in mid-late December (within a few days of each other) and one was from November. The client had inserted a note, stating that in the first week of January they put a stop payment on all daily loan payments and had retained a company to negotiate discounted payoffs.

The way I look at this...the client probably went out and solicited a bunch of MCA lenders (several of which are represented in this forum) all at the same time so the credit inquiries might not show up, accepted funding from as many as they could get qualified from and then within a few short weeks they are defaulting. This clearly seems pre-meditated.

Even though the numbers were appealing and I might have been able to do the deal, I declined.

There may be degrees of separation here...but I don't mind helping clients out of a bind on back on the road solid money management. But I won't touch a client that appears to be knowingly and willingly setting lenders up for default. IF they will do it to them, they will do it to me.

I may be setting up a firestorm here, but am curious about how others feel about scenarios like this.

Dan Page
dan@fundingstrategypartners.com

I fully agree with you . I am curious if your merchant is an I T Company. I had one mid to late to December with signed docs for 250k . The lender suspected fraud and asked for log in , the merchant gave it and banks were good.they were ready to fund but final kicked it back because he signed docs in 2 different color ink . They missed cut off . When they logged in the next day they saw 2 other companies both fund it and merchant was trying to triple fund . now this was all the merchant, one was direct with lender one with me and one with another ISO . I told one of my co workers that I'll bet them a thousand that this guy stops payments within a month

[dpFund]

Hey Michael - It is not a IT company but sounds like a very similar situation.

[bdshaw]

What amazes me is that the ISO who submitted it to you thinks you would do the refinance.

[Cfairbank]

There have been some threads going around the forum lately about the ethics of stacking.

As many people here know, I do a lot of consolidations. We have helped (and continue to help) a lot of companies that got their necks in a noose with daily payments that were beyond their ability to pay. It is their own darned fault for getting in that position, but there are a number of them we can help.

But a deal came up today that we declined coming out of the gate and I thought it was worth sharing here.

The client has eight positions which in of itself is not a deal killer for me (I have consolidated eight positions several times). Three of the positions were funded in mid-late December (within a few days of each other) and one was from November. The client had inserted a note, stating that in the first week of January they put a stop payment on all daily loan payments and had retained a company to negotiate discounted payoffs.

The way I look at this...the client probably went out and solicited a bunch of MCA lenders (several of which are represented in this forum) all at the same time so the credit inquiries might not show up, accepted funding from as many as they could get qualified from and then within a few short weeks they are defaulting. This clearly seems pre-meditated.

Even though the numbers were appealing and I might have been able to do the deal, I declined.

There may be degrees of separation here...but I don't mind helping clients out of a bind on back on the road solid money management. But I won't touch a client that appears to be knowingly and willingly setting lenders up for default. IF they will do it to them, they will do it to me.

I may be setting up a firestorm here, but am curious about how others feel about scenarios like this.

Dan Page
dan@fundingstrategypartners.com

Agreed, getting deals that close does seem premeditated and not someone you'd want to fund -- that being said, while we aren't a second position funder, have to imagine the sixth, seventh, and eight guys had to have "underwritten" it as though they would also get more positions behind them. More importantly, even though we'd have no problem with the number of positions, stopped payments are deal killers for us -- gotta check with my sales guys to see if we saw that deal -- we did see an 11 position deal today that was quite impressive.

As Bob said, shocked that business is still being shopped.

[Worldwide Capital]

11 positions? OH LORD!!!! who funded this guy god gracious!

[FUNd]

11th position? Sorry gotta call bull****. Can you post a page of the bank statement with the name of the lenders, client and account blacked out? I just don't believe you.

[jotucker1983]

I personally wouldn't even do business (as a broker) with a merchant that stacked that many times. We can call out brokers and funders all day long, but these merchants have got to be called out on the carpet for these insane practices as well. Merchants who usually stack, stack, stack, stack, and stack like that are usually in some form or fashion, not very "ethical" people.

Just because someone offered you a drug doesn't mean you have to smoke it.

[Cfairbank]

11th position? Sorry gotta call bull****. Can you post a page of the bank statement with the name of the lenders, client and account blacked out? I just don't believe you.

Email me. carl@breakoutfinance.com.

[Cfairbank]

Here were the balances (funders names redacted).... Dan, did you see this file?

Please see attached file, merchant looking for consolidation,

balances
i....-25k
i.....-49k
m.....-15k
w....-13k
w.....-5k
r.....-1k
a....-15k
f....-16k
f....-16k
a....-18k
c.....-14k.

[1StopFunding]

Wow

[CO1]

Looks like the pharmacy in Buffalo, NY!

[FUNd]

Here were the balances (funders names redacted).... Dan, did you see this file?

Please see attached file, merchant looking for consolidation,

balances
i....-25k
i.....-49k
m.....-15k
w....-13k
w.....-5k
r.....-1k
a....-15k
f....-16k
f....-16k
a....-18k
c.....-14k.

"f" stacked him for advance 8 and 9 when he was already 7 deep. He must have a pretty strong cash flow regardless. I guess my question is why wasn't he just offered a large deal at some point that would have wiped out the previous advances and allowed him to net cash? This really makes no sense.

[Cfairbank]

"f" stacked him for advance 8 and 9 when he was already 7 deep. He must have a pretty strong cash flow regardless. I guess my question is why wasn't he just offered a large deal at some point that would have wiped out the previous advances and allowed him to net cash? This really makes no sense.

Yeah agreed, doesnt make much sense. Only one of the guys was a "big" funder, and none of the large second position guys were on there. Not sure if balances are 100% accurate (docs we received didn't include pay-off letters, and a lot of times the balances are understated when estimated by merchant), but all the debits show up on bank statements and seem consistent with a lot of smaller deals -- ranging from 145 to 465 daily. Trucking company, grosses a little over 2MM/yr.

[dpFund]

Here were the balances (funders names redacted).... Dan, did you see this file?

Please see attached file, merchant looking for consolidation,

balances
i....-25k
i.....-49k
m.....-15k
w....-13k
w.....-5k
r.....-1k
a....-15k
f....-16k
f....-16k
a....-18k
c.....-14k.

Hi Carl - No, I did not see this one! I am funding a lot of truckers now, though.

[FUNd]

That's the answer then - "trucker credit" - as we call it - liens, collections, charge offs, in addition to a transportation SIC - none of the big houses would probably touch it.

[Cfairbank]

That's the answer then - "trucker credit" - as we call it - liens, collections, charge offs, in addition to a transportation SIC - none of the big houses would probably touch it.

Ha, you are probably right. We never ran credit, didn't make it past our pre-qual.

Dan I reached out to the broker that sent it to us and asked them to give you a look to see if there's something you can do.