[Sean Cash]

the group carl fairbanks is a part of is great as well. glad to hear they are on top of it

[mcaguru]

Of course no one arguing. we are all helping American Merchants when it comes to Capital needs. same with Credit Cards some have 0 APR some 29% APR they all recognize they are in same space.

[Funder Mark]

What does this mean for existing advances and loans that are currently active for Illinois?

[CreditGuy]

What does this mean for existing advances and loans that are currently active for Illinois?

Ex posto facto legislation passed by states is unconstitutional per Article 1, § 10. Article 1, § 9 makes it unconstitutional at a federal level as well.

[AndyYSCISOdept]

Was just pointing out that uber-hign interest rate 'easy credit' loans gather the attention of would-be regulators. If we were all doing 10-15% APR term loans with monthly payments, nobody would care.

What merchants do you get submitted to you that qualify for 10-15% APR? If its enough to offset your monthly income and that of your employees then god bless, but most of us aren't in that boat.

[mcaguru]

What about Federal student loans>? what percentage rates are they? and what % of income is going to payment..etc anything in that space being regulated or they stay away from own turf? What about bank fees from added to tens of millions of consumers that go negative 3 BUCKS and pay $34.00 whats that 1000%??

[mcaguru]

What about Federal student loans>? what percentage rates are they? and what % of income is going to payment..etc anything in that space being regulated or they stay away from own turf? What about bank fees from added to tens of millions of consumers that go negative 3 BUCKS and pay $34.00 whats that 1000%??

You want to talk regulations? lets talk about a law that if a candidate is 20 Points behind in Polls (since the chances are NIL) it should be illegal to raise funds from consumers or at least a major disclosure that the funds will almost certainly go down the toilet (I say that's real consumer protection!).

[WhoisKingsley]

How hard is it to give clear expectations to Business Owners of what they qualify for? AND don't tell me this isn't a critical source of every time law makers want to review the "Online Lending" "Marketplace Lending" "Merchant Cash Advance" and all the other labeled umbrellas we fall under.

The vetting process in which Originators/Brokers are supposed to be specialized in is the most CRITICAL aspect of our industry. "Online Lending" and "Marketplace Lending" is only as good as the human interaction that characterizes the application process. Companies that offer true online applying from start to finish do not have these types of issues because the only interaction that is offered is more of a service rather than a "sale"- and even if it is a "sale", it is less predatory. That is why we don't see your OnDecks and Lending Club companies coming up when there is an issue- those companies (to my knowledge) comply to a certain extent. Most "A-B" paper do and are feeling the hurt from the ladder, which are the high risk/hurt credit Businesses which apply to a good portion of who actually apply.

Those who are speaking to the Business owner and reviewing information from the history, needs, and conveying the process of how to "apply" to "approval" to "contracts" to "funding" is a HUGE jumbled mess. The fact that there are limited indirect and some "direct" funding companies that are popping up without knowing what they are doing is horrendous and a HUGE contribution to the issues in which you are reading about.

Characterization plays a HUGE part in our industry. No doubt about it. The fact that the one is speaking to the Merchants as a "specialist" in their field is more of a "Closer" and saying things like "This is the only chance you have" or "This is as good as your going to get" is bizarre. The threats and overall predatory practices that companies are letting happen is that of the fault of those that you allow to sign up with your company with limited rules or regulations that you apply to them. No one puts their foot down in fear that they won't obtain business. We allow certain "Cowboys" to run wild and then ask questions that you already answered yourself. We are the cause. We can be the solution. There is still time... practice what you preach mentality is needed no matter the dollar amount.

My ethics are applied to the process that ties along with the originating sales to assist the efficiency that we desperately need. I (and Cardinal of course) am an innovator and work with reputable Funding Company Principals that want change and I work with Brokers that (do and don't) play by the rules. Do we apply our own rules? YES, of course! CYA (Cover Your @$$)- we won't stand behind or represent another who doesn't take their job seriously. When I call a Broker and want to review their operational process and offer to assist in making their company more efficient, I am doing it at the sake of those who we work directly for. Some Broker Companies get defensive and angry at the fact that someone is telling them that if certain things were in place- they would be more efficient. More efficient = More $$$$ and things like this most likely wouldn't be happening... There is no disrespect in that and no disrespect in anything stated above. It's only Facts.

[J.Celifarco]

Maybe if funders weren't doing 5th position 4 month 1.59s with 10% in junk fees, our space wouldn't be getting so much of this negative attention. Once the word 'predatory' comes into play, well, we all remember 2008. Everyone was a "victim" of the big bad banks. Politicians can play the hero role to their constituents by saving them from these loans, without anyone really understanding that valuable access to capital has been taken away, for no good reason, by another bureaucrat trying to call the shots.

I agree with this that the 3rd position and further out deals for 60 days at 1.49 factors and 10% in fees is why we have this problem but I also disagree that a 10% APR loan is the answer.. Most of our customers don't qualify for that.. There is somewhere in between these 2 extremes where everyone can make money and we as an industry dont look like the predators that we are going to be portrayed as in these hearing that are going on in NY and in Illinois.. Like everything there is a middle ground where we can all survive if there could ever be a common sense consensus made between the lenders.
Problem is the likelihood of this is slim to none and we as an industry are going to be subject to whatever laws are passed because we sat back for way to long and did nothing to fix the problems in the industry ourselves.. Now we can now wait and hope we are destroyed from the outside because we never fixed ourselves from the inside.

[mcaguru]

Lets not forget that many brokers in the MCA space have a marketing expense that is very costly YET they continue the monthly spend because they are able to make an ROI on funding subprime deals (for lack of better term) IF HOWEVER (for example) ONLY the A paper lenders operated (not because the B was forced out of business but we all retired today) the brokers would only be able to fund a specific number of deals and be out of luck with THE HOUSES to FUND the B / C paper and simply wont be able to survive on just funding the Best In class (A Paper) and in no time they will STOP Marketing forcing the A paper lenders out of deal flow!!!!

[J.Celifarco]

Lets not forget that many brokers in the MCA space have a marketing expense that is very costly YET they continue the monthly spend because they are able to make an ROI on funding subprime deals (for lack of better term) IF HOWEVER (for example) ONLY the A paper lenders operated (not because the B was forced out of business but we all retired today) the brokers would only be able to fund a specific number of deals and be out of luck with a house to FUND the B C paper and and not be able to survive on just funding the Best In class and STOP Marketing forcing the A paper lenders out of deal flow!!!!

I completely disagree with this statement. The people who are spending the money on the marketing are the people doing the majority of the 1st position deals.. The 3rd 4th etc position deals are being done by the ISO's not spending money on marketing recycling UCC's that dont know how to sell 1st position deals.

[mcaguru]

I completely disagree with this statement. The people who are spending the money on the marketing are the people doing the majority of the 1st position deals.. The 3rd 4th etc position deals are being done by the ISO's not spending money on marketing recycling UCC's that dont know how to sell 1st position deals.

I am not far from receiving 10,000 files a month. I know how the market generates its deal flow like an f-16 Pilot on the side of Air force 1 (on a cloudy night if i may add) and they all need B C D Paper lenders to make it work for them.

[J.Celifarco]

I am not far from receiving 10,000 files a month. I know how the market generates its deal flow like an f-16 Pilot on the side of Air force 1 (on a cloudy night if i may add) and they all need B C D Paper lenders to make it work for them.

Agreed but the B and C lenders aren't doing 60 day 1.49 deals and most d lenders are a little better then that. As I said in the post above a little give by all sides and we could find middle ground. The idea that what we have is good and need no change and everything is great is the reason why the laws and regulation is starting to gain support

[Jcoles]

That 10k figure is way over exaggerated- just saying

[CreditGuy]

I am not far from receiving 10,000 files a month.

*cough* bull**** *cough*

[AndyYSCISOdept]

I am not far from receiving 10,000 files a month. I know how the market generates its deal flow like an f-16 Pilot on the side of Air force 1 (on a cloudy night if i may add) and they all need B C D Paper lenders to make it work for them.

Disagree

[WhoisKingsley]

I completely disagree with this statement. The people who are spending the money on the marketing are the people doing the majority of the 1st position deals.. The 3rd 4th etc position deals are being done by the ISO's not spending money on marketing recycling UCC's that dont know how to sell 1st position deals.

I feel like we generalize and though the generalizations are 90% accurate- The merchant is just as much guilty as the ISO, Broker, Originator, and Lead generation (especially those that blatantly state that the leads are from Merchants who already have another position)

Those who feed into this leave it more difficult to Market effectively ($) and know how to sell a 1st position (effectively explain what an business cash advance is and so forth) Full circle.

[mcaguru]

Disagree

with?

[mcaguru]

Agreed but the B and C lenders aren't doing 60 day 1.49 deals and most d lenders are a little better then that. As I said in the post above a little give by all sides and we could find middle ground. The idea that what we have is good and need no change and everything is great is the reason why the laws and regulation is starting to gain support

The smart people i know tell me the concern for regulation is the 'ONLINE" part of lending and "Peer Lending" the factor rate is not the concern, Remember Factoring companies and Invoice companies and real estate lenders (with Secured leverage) have been around for years with high yield returns.

[J.Celifarco]

The smart people i know tell me the concern for regulation is the 'ONLINE" part of lending and "Peer Lending" the factor rate is not the concern, Remember Factoring companies and Invoice companies and real estate lenders (with Secured leverage) have been around for years with high yield returns.

None of the people you are mentioning are looking to get their money back in 60 days @ 1.49 rates before fees. I have no problem with a high yield loan but I am saying there is a line. If you look at how that law is being worded they are looking at the payments saying they need to be under a certain % of Net income. That is because of stacking and the short terms on a lot of these programs. I think total payment to loans and length is the bigger issue then the factor rate. I think people outside the industry have the idea that we dont care if we put someone out of business as long as they payback their loan or most of it

[mcaguru]

Agreed but the B and C lenders aren't doing 60 day 1.49 deals and most d lenders are a little better then that. As I said in the post above a little give by all sides and we could find middle ground. The idea that what we have is good and need no change and everything is great is the reason why the laws and regulation is starting to gain support

I hear you..I see the people in our space extending the payback terms. Very few deals being done at 60 days.

The smart people i know tell me the concern for regulation is the 'ONLINE" part of lending and "Peer Lending" the factor rate is not the concern, Remember Factoring companies and Invoice companies and real estate lenders (with Secured leverage) have been around for years with high yield returns.

[J.Celifarco]

I hear you..I see the people in our space extending the payback terms. Very few deals being done at 60 days.

The smart people i know tell me the concern for regulation is the 'ONLINE" part of lending and "Peer Lending" the factor rate is not the concern, Remember Factoring companies and Invoice companies and real estate lenders (with Secured leverage) have been around for years with high yield returns.

time will tell but I think it is a much bigger problem then you seem to think it is. the ONLINE and PEER lending is a part of it but I think it is more then just that.. Time will tell

[CreditGuy]

This is a pretty simple example of regulatory capture. In this case, the Illinois state government has been captured by Accion Chicago and their bank partners and they are using the government to drive negative outcomes for potential competitors. The raison d'etre for this legislation is immaterial given the legislation is really only about providing a cudgel against Accion Chicago's and the banks' competition.

[FUNd]

I am not far from receiving 10,000 files a month.

Yeah, about 9500 short.

[HDF]

There really is an interesting divide here on this thread showing itself with this small sample of responses. And concerns from each side are as predictable as they can possibly be.

Yes, we will all suffer from the "sins" of a few. Unfortunately, it is not a few anymore. Time to pay the piper folks.