[Quickfunder]

Recently had two great approvals at decent and modest buy rates (1. 15) that helped close the deal.

When I received the latest approval, the base buy rate was 20 points more (1.35).

The first two deals were both furniture/specialty retail. This latest deal is event coordinating. The reason I am being told for the better approvals on the last 2 deals is that they were MCA deals and not Loan deals, and that MCA deals are priced better than the Loan deals. But this latest submission has just as great qualifications if not better.

Does this sound right to anyone? Approvals are with a prime lender and I am just trying to understand. Obviously the issue here is that we would have to drop our commission so much just to close the deal.

[Chambo]

they ran credit and the merchant got downgraded...that's what it sounds like to me

[HDF]

Hospitality and Event Planners are really tough. Not only are they often seasonal, they also are very competitive in trying to keep/gain clients. They also are frequently deposit (down payment) driven. Makes it tough to underwrite in a lot of cases.

They are also very slow to grow especially in a bad economy and heavy on labor costs. That being said, nice job on the furniture businesses - those are no picnic either.

[Quickfunder]

Thanks, I appreciate it. The furniture ones were tough, +2-3 wks than typical deal.

I get the seasonality of event planners plus the deposits, but this business has very consistent cashflow, great credit and clean statements. It's a good deal. So I couldn't understand a 20 pt hike in the rate. The explanation that it wasn't MCA makes no sense to me. Anyone else?

[sigmundpannu]

Have you tried Quarterspot or IOU? Not sure that falls in either of their restricted industry list. And QS isn't in all 50 states.

[Zach]

There are a ton of variables in play here that could have caused the higher buy rates, including but not limited to:

1. Open Advances
2. FICO
3. NSF's
4. Time in Business
5. Average Bank Balances
6. Industry type & lender's portfolio performance with that industry

Your rep's explanation personally makes no sense to me... probably a new rep. I doubt an MCA vs a Loan would have such a drastic pricing difference simply due to the contract verbiage.

[Quickfunder]

That's my point. His explanation doesn't make sense to me. Merchant has no issues with the reasons you mentioned, and none that have been cited to me.

There are a ton of variables in play here that could have caused the higher buy rates, including but not limited to:

1. Open Advances
2. FICO
3. NSF's
4. Time in Business
5. Average Bank Balances
6. Industry type & lender's portfolio performance with that industry

Your rep's explanation personally makes no sense to me... probably a new rep. I doubt an MCA vs a Loan would have such a drastic pricing difference simply due to the contract verbiage.

[Zach]

Really weird. Are you sure it's a direct lender? Sounds like a broker to me.