[isaacdstern]

That is not the insane part to me...the insane part to me is the automated underwriting...there are so many factors to take into consideration when you decide to give a business an advance...how about the #1 thing like verifying if a merchant is current on their rent...how is a computer going to do that??? I think the model is nuts...but hey thats just me

[Sean Cash]

That is not the insane part to me...the insane part to me is the automated underwriting...there are so many factors to take into consideration when you decide to give a business an advance...how about the #1 thing like verifying if a merchant is current on their rent...how is a computer going to do that??? I think the model is nuts...but hey thats just me

I think it's kind of like Wonga, the UK based payday lender that almost bought OnDeck. Their whole model was to fund EVERYTHING and then try to find factors that may have contributed to defaults later and tweak their system to limit approvals. Different rules seem to apply when you can burn through millions of dollars "just to test things out" and then raise another 100 mil once you think you see a trend and a "possible way" to become profitable.

[Mmarano]

It's all something Normal folks like us don't understand. Some firms are specifically designed to take losses. I don't get it. My partner and I banter over this quite a bit. I have wayyy tooo much pride to torch 75 Million. That's what kabbage raised. Probably have a gun to the head to deploy that money.

[Capital Stack]

their doing like $30 mil a month already and im sure trying to turn a profit

[Chambo]

their doing like $30 mil a month already and im sure trying to turn a profit

NO WAY they are profitable yet with two year terms...

[AndyYSCISOdept]

It's all something Normal folks like us don't understand. Some firms are specifically designed to take losses. I don't get it. My partner and I banter over this quite a bit. I have wayyy tooo much pride to torch 75 Million. That's what kabbage raised. Probably have a gun to the head to deploy that money.

Agreed...losing money is in the DNA of some but not all MCA companies, and trust me when I say, "The difference is painfully obvious"

[JayBallentine]

how about the #1 thing like verifying if a merchant is current on their rent...how is a computer going to do that???

Here's a possibility...

"Are all of your bills automatically paid from your primary business bank account - including your rent? If so, you qualify for our express funding / approval program - we'll have you funded in 24 hours! Enter your bank log-in details here!"

Then the software checks to make sure that he is current on the rent plus evaluating all other factors.

Not enough merchants automate bill payments now, but that trend is starting to change as we are becoming less interested in doing things like manually writing checks to cover the rent. Additionally, baby boomers are aging out and tomorrows "Joe Merchant" will be younger and more tech savvy - and will use apps to pay bills, order inventory, deploy marketing campaigns, and apply for business funding.

Carefully organizing big data and social graphs will make it easier for the entire process to become more and more frictionless for both funders and merchants. In 5-10 years whether a guy will default should be entirely predictable EVEN IF his credit is amazing and he's banking $1 trillion a month.

I could go on and on about this stuff... hopefully we'll make some positive contributions.