[jotucker1983]

If it's correct that everyone would be affected other than the traditional banks for the most part, than this just further confirms my "conspiracy theory" of big government and big business being partnered together to screw everybody else over, while they further increase their power (crony capitalism).

FinTech is causing some serious disruption to the traditional banking system with P2P guys and some of our A/B guys taking away marketshare directly from the banks, and this is pissing them off. So I'm not surprised to see something like this come up by the cronies in power.

Our industry is far from perfect, with many rogue players out there roaming in the market, but those rogue players are NOT the major volume producers in our industry.

- These fly by night, Piggyback Capital and Stacks R Us funding companies doing 4th - 11th stacked positions, are not heavy volume producers.

- These fly by night Uncle Joe Broker shops charging $400 - $1,000 to the merchant for "app fees" are not heavy volume producers.

The heavy volume producers are very much those that we hear about the most in the media and within our industry's own publication resources, in relation to the significant amount of volume they are doing. Many of them are directly partnered with traditional banks.

As a result of that, there's no reason for our entire industry to be pushed out due to "rogue players", other than trying to use the small percentage of our industry as an excuse to eliminate true free market competition.

If it's correct that everyone would be affected other than the traditional banks, than this is nothing but crony capitalism.

[Funder Mark]

So true. The fact that anybody in our industry would root for Trump, the ultimate combination of big business + big government astounds me.

[FUNd]

So true. The fact that anybody in our industry would root for Trump, the ultimate combination of big business + big government astounds me.

Right. It's all Trump's fault. Let's put Bernie in so I can go to work to support some other guy's family who doesn't feel like working the 60 hour weeks I do, oh wait, that already happened.

[Funder Mark]

Right. It's all Trump's fault. Let's put Bernie in so I can go to work to support some other guy's family who doesn't feel like working the 60 hour weeks I do, oh wait, that already happened.

I feel the same. Its the hypocrisy of Trump saying he is a conservative that bugs me every time.

[J.Celifarco]

Right. It's all Trump's fault. Let's put Bernie in so I can go to work to support some other guy's family who doesn't feel like working the 60 hour weeks I do, oh wait, that already happened.

Agreed but who is the answer they all suck.. that said and believe me I love a good political fight as much as the next guy but at least put it in a new thread

[isaacdstern]

It's funny when I approached a lot of folks to join the CFC they looked at me like I was crazy and most said regulation is at least 5 years out. If this proposed legislation in Illinois has taught us anything it's that regulation is going to happen one way or another whether we like it or not. It's here at our foot steps and I for one wanted a seat at the table to see if I could help determine even in a small way what it would look like. If anyone who is seeing this wants to get involved and have your voice heard reach out to myself or any of our other members.

[AndyYSCISOdept]

Guys, this regulation is a big deal and I agree that we as the "foundation and structure" of what is no longer a "cottage industry" MUST have an impact on determining the way regulation works. Regulation in and of itself is not a bad thing, in fact it could be a great thing. However we do it, it is imperative that we make sure that our voices are heard and our ideas heeded when it comes to shaping the scope, breadth, and limits of regulation in our industry.

PS....Does anyone want to discuss further in another thread what they would want to and NOT want to see in regards to regulation?

[jbrown]

Carl is correct that the A lenders are all over this. The SBFA's Director has had the draft legislation for weeks. We have been speaking with the legislative sponsor and had a 2 hour call with them yesterday. Steve Denis is going to Illinois to testify. One of the biggest issues is stacking. They are looking to outlaw stacking. I think that model is in jeopardy and will be under attack in multiple states and eventually more broadly over time.

Personally I would not ally myself with any group that is heavily dependent on stacking for their originations. Beyond any long term impact I think you paint a bullseye on your business In the short term.

Any legislation is bad for the industry but the predatory short term tactics have brought this on us. Specific language around "affordability" and verification of ability to pay in the proposed bill says a lot.

[mcaguru]

Would that outlaw a mortgage lender from funding a property that already has a loan in place? or large corporation from taking on additional debt from another source? how would the courts view this>

The second lien loan market has grown rapidly, from approximately $0.5 billion in 2002 to more than $28 billion in 2006, its now in the 100's of Billions..So my question is will a judge hand a law to MCA single digit Billion market that would get in the way of 100's of Billions on the street that's originated as a 2nd position?

[J.Celifarco]

Would that outlaw a mortgage lender from funding a property that already has a loan in place? or large corporation from taking on additional debt from another source? how would the courts view this>

The second lien loan market has grown rapidly, from approximately $0.5 billion in 2002 to more than $28 billion in 2006, its now in the 100's of Billions..So my question is will a judge hand a law to MCA single digit Billion market that would get in the way of 100's of Billions on the street that's originated as a 2nd position?

Again you are not looking at the term and what the total payments as compared to gross sales are doing to the cash flow of the business.

[mcaguru]

Again 2nd source funding originated 12'000 merchants Mr. Brown and no A paper lender wants to see the data on the current status of the 12,000 merchants who have never had a 2nd positions and you guys can take 1 guess the current status of how the phone line sounds (Hint: My 2yr old Fisher Price phone has the same affect) when you dial 2 thirds of the 12000 business. (and that figure was calculated back in 2011 before the 2nd position days).

[Scott Williams]

Too many people have only sold this product in the stacking world we live in. It's not the end of the world if the industry switches back to 1st position only deals. Everyone still made good revenue years ago before stacking started.

[mcaguru]

Again you are not looking at the term and what the total payments as compared to gross sales are doing to the cash flow of the business.

BTW I cant talk for all High Risk Lenders but the loss on principle for the High Risk Lenders are about the same as A paper Lenders. (i am talking about the sophisticated groups...I hear some A paper lenders have default rates trough the roof).

[jbrown]

Again 2nd source funding originated 12'000 merchants Mr. Brown and no A paper lender wants to see the data on the current status of the 12,000 merchants who have never had a 2nd positions and you guys can take 1 guess the current status of how the phone line sounds (Hint: My 2yr old Fisher Price phone has the same affect) when you dial 2 thirds of the 12000 business. (and that figure was calculated back in 2011 before the 2nd position days).

That is not a good argument. The tactics of 2nd Source put those merchants out of business. $4000 terminal leases for a $400 terminal. 10% closing fees. Preyed on the most desperate of business owners.

[bizloanbroker]

So When Rapid and every other super "A" paper funder stacks on Amex MCA deals its ok, but when Everest or Knight stacks on and MCC deal that's not ok....explain the difference???

Carl is correct that the A lenders are all over this. The SBFA's Director has had the draft legislation for weeks. We have been speaking with the legislative sponsor and had a 2 hour call with them yesterday. Steve Denis is going to Illinois to testify. One of the biggest issues is stacking. They are looking to outlaw stacking. I think that model is in jeopardy and will be under attack in multiple states and eventually more broadly over time.

Personally I would not ally myself with any group that is heavily dependent on stacking for their originations. Beyond any long term impact I think you paint a bullseye on your business In the short term.

Any legislation is bad for the industry but the predatory short term tactics have brought this on us. Specific language around "affordability" and verification of ability to pay in the proposed bill says a lot.

[Michael I]

So When Rapid and every other super "A" paper funder stacks on Amex MCA deals its ok, but when Everest or Knight stacks on and MCC deal that's not ok....explain the difference???

bad example . rapid declined one of my files because of the amex balance . but i get the point

[mcaguru]

That is not a good argument. The tactics of 2nd Source put those merchants out of business. $4000 terminal leases for a $400 terminal. 10% closing fees. Preyed on the most desperate of business owners.

very few but even in those cases the lease was under 100 bucks a month 3 bucks day rarely puts a merchant under (keep in mind they did have an A paper lender first only position)...

[mcaguru]

bad example . rapid declined one of my files because of the amex balance . but i get the point

I think hes saying that when an A paper Lender (average rates in the 1.30 range) funds a merchant they are stressing him (perhaps) with his current obligations from suppliers to rent to employees the list goes on..so true there is not an official lender in the account but they just INKED a Merchant to a daily payment to leave the bank account. Again i am a major player in getting merchants funded in America... I am just explaining how we need to stay away from knocking our industries because the Nay Sayers will say everything i just mentioned (see above).

[bdshaw]

I have experience with regulators on the federal, state and community level. In that case I knew what triggered the push for regulation but here I do not. Does anyone tell me the genesis of this push and what and whom future regulations will protect.
I thought I saw Marcus post something about the major concern being online lenders but why?
Bob

[mcaguru]

I have experience with regulators on the federal, state and community level. In that case I knew what triggered the push for regulation but here I do not. Does anyone tell me the genesis of this push and what and whom future regulations will protect.
I thought I saw Marcus post something about the major concern being online lenders but why?
Bob

its not so much the end product..I think the concept of ONLINE scares the Brick and Mortar institutions after all think about it a little unknown man named jay s. walker from forrest hills queens launched a website and forever changed the way Millions of hotel and airline tickets are being booked.

[CreditGuy]

I have experience with regulators on the federal, state and community level. In that case I knew what triggered the push for regulation but here I do not. Does anyone tell me the genesis of this push and what and whom future regulations will protect.
I thought I saw Marcus post something about the major concern being online lenders but why?
Bob

Ahem...

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.

[jbrown]

It's not the banks. The Illinois Bankers Association is strongly against this bill or any new form of regulation of small business lending.

[J.Celifarco]

Why is it so hard to believe that stacking, 60 day 1.49's, and companies will to take 30% or more of a companies gross sales to put towards payments is what caused this. Eventually someone was going to notice.

[aredmond]

Brokers keep in mind when looking to place a deal that the funding companies in the LINK below are spending serious money to make sure the wheels on our industry can keep spinning and be able to fund your files pay you commissions and of course allow your clients to have access to capital.

https://www.commercialfinancecoalition.com/about-cfc/

They obviously are not spending "serious" money on this website. It looks like a 6th grader put this together.

[mcaguru]

You may be right. I read about an organization that acts as a conduit between poor village kids and large corporations for tasks exactly like building websites for all I know as a good deed they used that service.
Mr Credibly when you have a min take a look at Warren Buffet's website:
http://www.berkshirehathaway.com/