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01-17-2014, 04:17 PM #1
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- Aug 2013
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Early pay off question
What MCA lender permits merchants pay before schedule with no penalties or interest charges? This is for a B2B service provider with bad credit (~500 FICO) and about 1 year in business.
Thanks
JC
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01-17-2014, 04:39 PM #2
all of them....they love it! Get their payback and can flip the cash back out sooner
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01-17-2014, 04:39 PM #3
MCA's don't charge interest....everyone knows that
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01-17-2014, 05:05 PM #4
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01-17-2014, 08:39 PM #5
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- Aug 2013
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Early pay off question
Question is...has a merchant ever been able to successfully strike a deal by offering less than their total payback to pay in full early?
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01-20-2014, 11:23 PM #6
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- Dec 2012
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- Atlanta
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As a former Director at AdvanceMe, we/they from time to time would negotiate a "settlement" - essentially a reduction in the RTR owed. Here at Superior Capital, a direct high risk funder, we will on occasion do the same.
Robert W. Gaskin
Partner: Superior Capital
Your Alternative in High Risk Funding
Atlanta, GA
866-606-4545
bgaskin@superiorcapitalfund.com
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01-18-2014, 01:18 PM #7
I have seen Snap,iou.
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01-22-2014, 10:37 AM #8
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I've seen GBR Funding, Rapid Capital and Merchant Cash & Capital provide prepayment discounts, but the number of merchants who I've seen actually prepay an advance can be counted on one hand.
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01-24-2014, 08:17 PM #9
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- Sep 2013
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^ Exactly, merchants LOVE to ask if there is a pre-pay penalty but you know full well they will never do it. I wish a lender would offer a reduced RTR deal if paid early (on some kind of sliding schedule) as a distinguishing perk. It would be easy to sell and most likely rarely have to be enforced.
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01-29-2014, 11:25 AM #10
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The only reason merchants ask if there is a pre-pay penalty is because some sales offices always include that line in their pitch. In fact, no funder penalizes a merchant for prepaying. The correct pitch should be: "we offer a prepayment discount if you wish to pay off your advance earlier".
If salespeople didn't bring up the pre-pay penalty, the merchants would never know what the term meant.
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01-29-2014, 11:37 AM #11
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01-29-2014, 11:38 AM #12
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It also deters the merchant from asking about a prepayment discount.
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01-29-2014, 11:44 AM #13
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- Sep 2012
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- New York, NY
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I understand prepayment penalties on mortgages for subprime borrowers because of refinancing risk, but that has nothing to do with the MCA world.
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