[jbrown]

One of our merchants. Dentist practice, sub 550 fico.

Rapid - $57k, 8 month MCA
WBL - $60k daily ach, 1.90/12 months
WG - $15k daily ach, 1.42/12 weeks
Yellowstone - $10k daily ach, 1.45/10 weeks

Don't post any nonsense about how this is an informed merchant and the stackers are like 2nd and 3rd home equity loans. The Hoppers are just burying the doctor until he goes BK.

[MCNetwork]

Does he have a lot of NSFs or are his statements clean? I'm curious to know how much of his monthly gross is going towards debt service. 40%??

[jbrown]

World Global Financing. Cyril Eskenazi, CEO

[channin19]

1.90!

Who is WG?

[jbrown]

Statements have some issues. That is why we had him on a split.

Good guess on the % of revenue being taken. We have 10%. WBL 9.5%. WG 7% and YS 6.5%, total about 33%.

[MCNetwork]

Statements have some issues. That is why we had him on a split.

Good guess on the % of revenue being taken. We have 10%. WBL 9.5%. WG 7% and YS 6.5%, total about 33%.

33% of revenue going towards MCA debt service can't be good no matter how you try to justify it. Most underwriting guidelines advise keeping MCA debt under 14%. This is a bad situation...

[MCAVeteran]

10 week duration stackers? Wow...

[Sean Cash]

10 week duration stackers? Wow...

this is new to you? There are companies doing 6 week deals.

[MCAVeteran]

6 week , 10 week, whatever the high rates durations and impact to merchant is nonsense - the merchant is equally responsible in taking these nonsense offers and illustrates that something really is broken out there on a macro level- if these were one off stories thats one thing but this is a daily occurrence now-

[Chambo]

it is as if people are taunting the Feds to come in and regulate. Daring them

[jbrown]

Funny you should say that. Before I posted this, I was contacted by, and I am scheduled to speak with someone next week in this department:

Division of Consumer and Community Affairs
Board of Governors of the Federal Reserve System

it is as if people are taunting the Feds to come in and regulate. Daring them

[mcaguru]

Funny you should say that. Before I posted this, I was contacted by, and I am scheduled to speak with someone next week in this department:

Division of Consumer and Community Affairs
Board of Governors of the Federal Reserve System

With all Due Respect Mr Brown -
The Big Bankers are saying the exact same thing about Rapid and Ondeck and the other A paper Funders. would love you to release to the forum the percent of your merchants you funded in 2007 are still in business?? its funny how you say your invited to come speak at some departmentivision of Consumer and Community Affairs
Board of Governors of the Federal Reserve System After all don't you think the large banks would make the exact same case to a federal board about Rapid and New Logic hurting the merchant.
Now back to the fact that a large Number of your 2007 merchants are no longer in business, Would you not be like the Stacker to that bankrupts merchants landlord and American express Cards that he defaulted on?? how about the employees and the families that worked at all your merchants you funded in 2007-8 that are out of a job...please don't feel good about your practice by knocking the stackers!

[funding pro]

With all Due Respect Mr Brown -
The Big Bankers are saying the exact same thing about Rapid and Ondeck and the other A paper Funders. would love you to release to the forum the percent of your merchants you funded in 2007 are still in business?? its funny how you say your invited to come speak at some departmentivision of Consumer and Community Affairs
Board of Governors of the Federal Reserve System After all don't you think the large banks would make the exact same case to a federal board about Rapid and New Logic hurting the merchant.
Now back to the fact that a large Number of your 2007 merchants are no longer in business, Would you not be like the Stacker to that bankrupts merchants landlord and American express Cards that he defaulted on?? how about the employees and the families that worked at all your merchants you funded in 2007-8 that are out of a job...please don't feel good about your practice by knocking the stackers!

I don't think you are completely wrong with the argument you are making about cash advance companies funding behind a traditional loan, but there are a few things you need to realize are different. First, a traditional loan is typically secured against a piece of collateral that protects the lender. If I were to take a loan against my home or a piece of equipment equal to the value, I cannot go out and get another loan against that same thing that I no longer have any equity in. The terms of the loan may state that I cannot receive additional debt which is where you are partly correct in comparing the two.

A cash advance in the traditional sense is a purchase of revenue. When someone secures a right to receive a percentage of that revenue, and in contract is not allowed to sell their revenue to anyone else, you fall into a different situation than when you look at more traditional types of financing.

I think the main difference though, is that when the first position funders are financing these businesses, they are taking into consideration the existing debt on the business and calculating what that business can reasonably afford to pay back without putting them in a compromising position with their other lenders, payroll, taxes, etc. Does work every time? No. But the model is built to work across the spectrum for the most part. Not to generalize all of the "stackers" but it appears to me that for the most part, they are financing businesses with no regard for what they can and cannot reasonably afford to pay back to them, the other funding companies and other forms of debt while maintaining the ability to operate their business for the long run.

Just my two cents.

[funding pro]

it is as if people are taunting the Feds to come in and regulate. Daring them

I'm confused, I thought you were with YS? Or am I confusing posters?

[Chambo]

I'm confused, I thought you were with YS? Or am I confusing posters?

I am at YSC. Not everyone there is a *****.

[AndyYSCISOdept]

it is as if people are taunting the Feds to come in and regulate. Daring them

I completely agree, but whats the solution? You going ot tell the reps who are able to collect the commissions on these deals to stop? That's never going to happen because the amount of greed among the haves and the have nots has saturated the industry. Its as if we are saying, "Who cares if the merchant goes out of business? I got 10 more lined up and I'm getting paid"

And don't think that I am busting out a "holier than thou" I have stacked many deals, but I don't do it without knowing that eventually something has to give.

[MCNetwork]

I love the 10-12 week stacks. Wham, bam, thank you ma'am!

[MCNetwork]

Uh oh...don't throw your fellow funders under the bus!

[1StopFunding]

WOW! This is absurd.

[Chambo]

WOW! This is absurd.

It is totall absurd...until some zealous politician decides to make his mark on the MCA industry and the predatory ways of multiple stacking.

[CashAdvanced]

There are plenty of merchants who take a second or a third position and have absolutely no trouble paying all 3. There are some businesses that can handle multiple advances as long as their cash flow is there and their intent is to make the daily payments. I'm not justifying the merchant taking 4 advances, just saying that a majority of them continue to pay all of them without defaulting, you just see the defaulted ones more often bc they stick out. Most of these owners need more money then they are being approved for by one company

[funding pro]

I'm not justifying the merchant taking 4 advances, just saying that a majority of them continue to pay all of them without defaulting, you just see the defaulted ones more often bc they stick out.

Ehhhh, that's bull****. You are justifying it. Whatever it takes to make you sleep better at night...

[cashguy]

I don't know if this is good or bad. It's hard to draw parallels to other industries. Is credit cards a good example or bad one where everyone is stacking each other and not concerned about who is in first position. But that happens everyday.

[CashAdvanced]

Funding pro you are not very intelligent. If you having something to contribute to the conversation then do so, you think stacking a merchant makes it hard to sleep at night. Get real hah shmuck

[JSL23]

I have only been in this industry for 6 months so I don't claim to be an expert, I do however have some insight based on 12 years of overall B2B sales experience. This is a corporate culture based issue that starts up top.

I spent 4 months at a Broker/Lender whose name I won't mention and I hated it. They micromanaged(counting dials, locking the door at 9:05), the gave a lousy 400 draw and capped it at $1600(withouttelling you until you were there a week or so) offered zero training on Sales techniques or product knowledge..... but they did teach us how to stack!(as long as it wasn't behind them ofcourse). Most of the leads we were given were UCC leads which inevitably lead to stacking, the commission for the brokered deals were weak...It was a total ****show! I left after 4 months and I was one of the last men standing.

I am now at a Broker shop that also syndicates and it is much different. We try to do the right thing by our clients. Will we do second position-yes, but it stops there and we are trying to find Merchants using methods other than UCCS. The people I work with now tell me a lot of places are very similar to the chop shop I wasted four months at. If that's true, than how do you expect people not to stack. No base salary, lots of deals get buried after preapproval, leaving the Account Executive looking like a fool and most of all, there are millions of Merchants out there who can benefit from this but we all chase a small segment of them..like the dentist with 4 different advances for example. Those guys are fast and easy is all.

Why not increase the approval range and terms across the board. Expand marketing efforts. Encourage your Sales reps to go to trade shows and network. Utilize LinkedIn and Twitter. Do you realize this board is the same 10-15 guys having the same stacking debate over and over!? You guys are the so called leaders of this industry, right?! Stop talking about it and go back to the drawing board. This is a legit bubble...a lot of people can enter this industryand thrive, without stacking. Set it up so they can do it the right way. Just my opinion...