[YuliyaG]

The merchant cash advance industry seems to be nearing some sort of transformation period if you will... I've been looking at the industry from two lenses and the picture doesn't look that pretty.

The two drivers of what I presume to be the ultimate "transformation" of the industry are:

1. Failure to Grow.

According to Bloomberg in 2015, market penetration stood around 1%. This is the same number as 2013 and 2011. However, the industry size has expanded - a ton. How do you grow an industry while the market fails to expand? We all know the answer.

Additionally, fewer and fewer businesses are starting. So, supply of merchants in this market that has failed to expand is dwindling. Finally, there's a massive recession nearing I think Goldman pegs it at a 50/50 shot, I think it's more like 100%


2. Low Grade "Professionals."

Anybody off the street can become an MCA broker almost literally. That has attracted some pretty shady characters. I get an e-mail from a scumbag a day, almost literally. Nonetheless, the average independent MCA broker relies on the following devices to survive:

• Lying & Con Games: In this case they're mostly trying to con merchants out of fees, other brokers out of deals, and marketing companies / lead vendors out of leads.
• Inflated Egos: When you have no real skill or anything of real value to offer society, you inflate your own ego I guess. Most small time, mom and pop brokers rely on ego to maintain their self worth. So in this sense, they actually take pride in stealing, conning, or lying to folks. When this scum bag behavior works, it boosts their ego. "My scumbaggery just got me a buck! I'm good at this scum bag stuff, man did my ego just take a boost!" It's a sick and pernicious cycle.

To be fair, not all small time brokers have egos. They have no pride and thus they will beg, plead, and offer all sorts of things that have no value for help getting ahead. These are often fun for me to deal with.

They'll beg me for leads and I've recently been telling brokers like this to send me a video of them on all fours barking like a dog, and tag it with their ISO name / logo. Then, I'll send them leads. I know for a fact that AT LEAST one will take me up on this because it seems everyday the desperation level is getting higher and higher..

What do you guys think? Where do you see the industry in 2 years?

[jotucker1983]

I agree 100% with the "failure to grow" analysis, but I think the comments about the "average" independent MCA broker surviving based solely on lying, conning, and other unethical procedures, is a bit overboard.

In two years I think this industry will still be around but I believe it will continue to evolve in such a fashion as to where more integrations with traditional networks, systems and players take place.

[JasonP]

I agree 100% with the "failure to grow" analysis, but I think the comments about the "average" independent MCA broker surviving based solely on lying, conning, and other unethical procedures, is a bit overboard.

In two years I think this industry will still be around but I believe it will continue to evolve in such a fashion as to where more integrations with traditional networks, systems and players take place.

Jotucker , your answers are always so balanced and civil , unlike the other folks, keep up the good work.

[CASHCASH]

To be fair, not all small time brokers have egos. They have no pride and thus they will beg, plead, and offer all sorts of things that have no value for help getting ahead. These are often fun for me to deal with.

They'll beg me for leads and I've recently been telling brokers like this to send me a video of them on all fours barking like a dog, and tag it with their ISO name / logo. Then, I'll send them leads. I know for a fact that AT LEAST one will take me up on this because it seems everyday the desperation level is getting higher and higher..

So you complain about the egos of some of the people you have had to deal with and then follow it up with one of the most egotistical things I've ever read on this forum? Classy move. It makes it tough to lend credence to anything else you said before that little gem.

[FUNd]

The merchant cash advance industry seems to be nearing some sort of transformation period if you will... I've been looking at the industry from two lenses and the picture doesn't look that pretty.

The two drivers of what I presume to be the ultimate "transformation" of the industry are:

1. Failure to Grow.

According to Bloomberg in 2015, market penetration stood around 1%. This is the same number as 2013 and 2011. However, the industry size has expanded - a ton. How do you grow an industry while the market fails to expand? We all know the answer.

Additionally, fewer and fewer businesses are starting. So, supply of merchants in this market that has failed to expand is dwindling. Finally, there's a massive recession nearing I think Goldman pegs it at a 50/50 shot, I think it's more like 100%


2. Low Grade "Professionals."

Anybody off the street can become an MCA broker almost literally. That has attracted some pretty shady characters. I get an e-mail from a scumbag a day, almost literally. Nonetheless, the average independent MCA broker relies on the following devices to survive:

• Lying & Con Games: In this case they're mostly trying to con merchants out of fees, other brokers out of deals, and marketing companies / lead vendors out of leads.
• Inflated Egos: When you have no real skill or anything of real value to offer society, you inflate your own ego I guess. Most small time, mom and pop brokers rely on ego to maintain their self worth. So in this sense, they actually take pride in stealing, conning, or lying to folks. When this scum bag behavior works, it boosts their ego. "My scumbaggery just got me a buck! I'm good at this scum bag stuff, man did my ego just take a boost!" It's a sick and pernicious cycle.

To be fair, not all small time brokers have egos. They have no pride and thus they will beg, plead, and offer all sorts of things that have no value for help getting ahead. These are often fun for me to deal with.

They'll beg me for leads and I've recently been telling brokers like this to send me a video of them on all fours barking like a dog, and tag it with their ISO name / logo. Then, I'll send them leads. I know for a fact that AT LEAST one will take me up on this because it seems everyday the desperation level is getting higher and higher..

What do you guys think? Where do you see the industry in 2 years?

If you don't like it, leave, and take about 500 of these one and 2 man chop shops with you.

[ridextreme]

If you don't like it, leave, and take about 500 of these one and 2 man chop shops with you.

+1

complain complain complain.

Anybody off the street can become an MCA broker almost literally. That has attracted some pretty shady characters.

so if you're suggesting you are so over qualified to be in this space, what are you doing here than?

Or is the pot calling the kettle black?

[biggr]

LOL Probably one of the funniest things I have read here.. Why would she even post that...

[arezalmighty]

LOL Probably one of the funniest things I have read here.. Why would she even post that...

She's a narcissist.

[J.Celifarco]

How do you know it is going to be a good week? You log into to daily funder on a monday and see this Gem of a post.

HAPPY MONDAY

[TStein]

They'll beg me for leads and I've recently been telling brokers like this to send me a video of them on all fours barking like a dog, and tag it with their ISO name / logo. Then, I'll send them leads. I know for a fact that AT LEAST one will take me up on this because it seems everyday the desperation level is getting higher and higher..

Go back to selling Yeezys with that mindset...

[dpFund]

Really makes you want to do business with this lady, eh? The good news is you are showing yourself for who you really are. Makes it easier to decide whether or not anyone here would want to work with you.

[CreditGuy]

Where do you see the industry in 2 years?

Without you in it, hopefully.

[aredmond]

Without you in it, hopefully.

Daily Funder presents : "The Roast of YuliyaG" with your roastmaster for the evening, CreditGuy.

[bdshaw]

Lying & Con Games: In this case they're mostly trying to con merchants out of fees, other brokers out of deals, and marketing companies / lead vendors out of leads.
Inflated Egos: When you have no real skill or anything of real value to offer society, you inflate your own ego I guess. Most small time, mom and pop brokers rely on ego to maintain their self worth. So in this sense, they actually take pride in stealing, conning, or lying to folks. When this scum bag behavior works, it boosts their ego. "My scumbaggery just got me a buck! I'm good at this scum bag stuff, man did my ego just take a boost!" It's a sick and pernicious cycle.

Is this autobiographical material?

[Christian]

What do I think? Send me a video of yourself on all fours barking like a dog" and I'll tell you.

[biggr]

Just ask Oprah!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[ADiamond]

According to Bloomberg in 2015, market penetration stood around 1%. This is the same number as 2013 and 2011. However, the industry size has expanded - a ton.

please post a reference to your data for this statistic, i am sincerely interested in reading about it.

[Michael I]

please post a reference to your data for this statistic, i am sincerely interested in reading about it.

i will like to see the video of the iso on all 4 barking

[CreditGuy]

please post a reference to your data for this statistic, i am sincerely interested in reading about it.

189722.gif

[Chambo]

Interesting, because at the LEND-IT conference in April, they are/were saying that we have just begun to scratch the surface and they expect the overall industry, personal and business, to triple in the 3-5 years

[YuliyaG]

Interesting, because at the LEND-IT conference in April, they are/were saying that we have just begun to scratch the surface and they expect the overall industry, personal and business, to triple in the 3-5 years

These are the same things being said for years. No one with investors, boards, customers, and employees is ever going to get up and say "THE END IS NIGH FOLKS!" That would be stupid.

I've done the projections and have participated in presentations that tout the same fallacy; "GROWTH, GROWTH, GROWTH, AND SOME MORE GROWTH!"

The future of THIS industry lies in the data and not opinions. Here are data points to evaluate (not argue with)

1. The rate to which new businesses are starting.
2. The rate to which new businesses are failing.
3. The probability of a deep recession. (judging by last 30 years, expect the sh*t to hit fan in Oct prior to election)
4. Stagnant market penetration.
5. Oversupply of capital relative to demand. Funders are competing for less...
6. The $552 trillion derivatives bubble the media dares not mention...
7. THE PERCENTAGE OF BUSINESSES WHO EXIT AN MCA BETTER OFF THAN BEFORE AN MCA, VS. THOSE WHO DO NOT.

[HDF]

It really depends on who you are addressing Yuliya. If you are trying to discourage the brokers and ISO shops that you detest because they didn't make you rich, you are way off. The better actors welcome a paradigm shift - and will thrive in serving small businesses.

If your are trying to take a shot at the funding banks and fintech in general, you have better standing assuming your back-of -the-envelope data is accurate. (Which it isn't) This economy and environment has been in the ****ter for some time now and helped create the popularity and need MCA and fintech.

You wanted some, and got bounced out. Get over it.

[biggr]

Response to Aliyah (Data Points)
--------------------------------------

Citigroup
Total Assets: $1,808,356,000,000 (more than 1.8 trillion dollars)
Total Exposure To Derivatives: $53,042,993,000,000 (more than 53 trillion dollars)
JPMorgan Chase
Total Assets: $2,417,121,000,000 (about 2.4 trillion dollars)
Total Exposure To Derivatives: $51,352,846,000,000 (more than 51 trillion dollars)
Goldman Sachs
Total Assets: $880,607,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $51,148,095,000,000 (more than 51 trillion dollars)
Bank Of America
Total Assets: $2,154,342,000,000 (a little bit more than 2.1 trillion dollars)
Total Exposure To Derivatives: $45,243,755,000,000 (more than 45 trillion dollars)
Morgan Stanley
Total Assets: $834,113,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $31,054,323,000,000 (more than 31 trillion dollars)
Wells Fargo
Total Assets: $1,751,265,000,000 (more than 1.7 trillion dollars)
Total Exposure To Derivatives: $6,074,262,000,000 (more than 6 trillion dollars)

Seems like a Big Bank and Wall Street problem -
-------------------------------------------------------------------------------------------------------
Small Business Startup activity rose in 2015, reversing a five-year
downward trend in the United States, giving rise to
hope for a revival of entrepreneurship.

From The Economist

--------------------------------------------------------------------------------------------------------
Hidden in much of the gloomy news about small business in recent years is an important positive statistic: business failure rates are in a long-term decline. The rate at which American employers go under has fallen by 30 percent since 1977.

Sure, the trend is far from perfectly linear. Business failure rates rise in recessions and decline in expansions. But the underlying trend is there. A smaller fraction of companies goes under every year now than three decades ago.

"Quoted from the Econonmist"


Here are 3 data point evaluated from Market professionals Aliyah.


Maybe you need to do a little more research before putting your personal agenda on this forum..


Would do more but you get the point...

[mcaguru]

Ill tell you one thing Yuliya..Perception is everything!! if you feel that way your going to struggle making a living in our space. You make it seem like we are manufacturing "knuckle busters" that merchants used to use when accepting credit card with a slip of paper they would scrape credit card to make an imprint.

I can tell you at Cresthill Capital we are growing submissions and funding amounts by the day and believe the top players are seeing the same results.

[mcaguru]

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