[YuliyaG]

This industry seems to attract folks who are simply not to be trusted for any reason whatsoever. In fact, I would place 8 out of 10 people in the category of "don't trust around my goldfish." With that said as the industry declines, here are some of my predictions as to what you can expect from the sh*t show.

1. Less money will be invested in legal fees / lawsuits as margins thin up. This will unleash a wave of crooked creativity like you've never seen.

2. Funders will continue to work together to backdoor unsuspecting brokers. Expect backdooring to reach an all time high.

3. Macro economic data indicates the economy is stalling. So, I suspect merchants and brokers will form an "unholy" alliance to creatively and cooperatively work to steal merchant cash advances from funders. I expect this to happen when brokers are not stealing them from merchants outright.

What do you guys see coming down the road? You growing or slowing?

[bizloanbroker]

someone is angry....want to go out some time???

[MCNetwork]

1. Margins will only thin up for the new funders that compete on price alone. For the companies that price the product correctly, their margins should be consistent.

2. Backdooring is only a last resort for the low priced funders whose margins keep declining. For the stable funders, backdooring is just short-sighted and bad for business so they refrain from doing it.

3. We are in the midst of a shakeout and the new funders and ISOs who don't understand the business will crash and burn. The old guard/established players will sift through the wreckage of fallen ISOs to help strengthen their positions.

The industry as a whole is alive and well and the doom and gloom naysayers (like yourself) will be soon out of the industry while the savvy professionals grow and adapt so they can thrive in this ever changing competitive climate.

[mcaguru]

I believe the MCA Space is growing rapidly (by the hour)..I am starting to see other financial companies adding MCA to product arsenal, I find most of shops/isos to be highly ethical and always do right by the merchant (always a bad apple in a bunch). I can not talk about the fly-by-night shops but the funding companies we mingle with have the ability to spend Millions with an M to protect business model.

My prediction going forward is you may see some of the high risk players getting into the A paper Space being that they have the static pools and the capital and the deal flow and the relationships to start carving up that sector. (I have been wrong before )...

[J.Celifarco]

1. Margins will only thin up for the new funders that compete on price alone. For the companies that price the product correctly, their margins should be consistent.

2. Backdooring is only a last resort for the low priced funders whose margins keep declining. For the stable funders, backdooring is just short-sighted and bad for business so they refrain from doing it.

3. We are in the midst of a shakeout and the new funders and ISOs who don't understand the business will crash and burn. The old guard/established players will sift through the wreckage of fallen ISOs to help strengthen their positions.

The industry as a whole is alive and well and the doom and gloom naysayers (like yourself) will be soon out of the industry while the savvy professionals grow and adapt so they can thrive in this ever changing competitive climate.

100% agreed on all of this.. Eventually the bubble will burst and the people who entered the industry with zero knowledge and the hopes of getting rich quick will fail leaving those of us who were here before them still standing. We offer a product that business' need. For the smart, knowledgeable, and ethically sound companies this is just the beginning.

[isaacdstern]

I cant give away any specifics but we are seeing a record amount of submissions from our isos and signing up 2-3 new isos daily which says growth to me.

In terms of funding we are a funding a record amount of deals and putting out more money than ever before...again this says growth to me.

[mcaguru]

I cant give away any specifics but we are seeing a record amount of submissions from our isos and signing up 2-3 new isos daily which says growth to me.

In terms of funding we are a funding a record amount of deals and putting out more money than ever before...again this says growth to me.

Thanks for sharing that Isaac! also i am seeing more and more Ads on TV and radio-satellite advertising the MCA product.

[MCNetwork]

Not only that Isaac. I'm sure your margins are pretty healthy thanks to those 60 day 1.47s lol. Goes to show that you don't have to have low factor rates to succeed in this business. It's all about your unique value proposition and the niche you serve.

[isaacdstern]

We got into this segment of the market by accident....we were marketing like crazy and no one wanted to fund any deal that was below B+ paper and considering 8 out of every 10 apps was below a B+ we needed to fund those other apps or the marketing spend would not justify itself. So we took some capital and tried to fund our own declines and here we are today!

[J.Celifarco]

we got into this segment of the market by accident....we were marketing like crazy and no one wanted to fund any deal that was below b+ paper and considering 8 out of every 10 apps was below a b+ we needed to fund those other apps or the marketing spend would not justify itself. So we took some capital and tried to fund our own declines and here we are today!

seems like that test run paid off..

[MCNetwork]

As customer acquisition costs continue to increase, it gets harder and harder to find merchants without a huge marketing spend. That's why the 1.15 buy rate guys can't last very long...

[mcaguru]

As customer acquisition costs continue to increase, it gets harder and harder to find merchants without a huge marketing spend. That's why the 1.15 buy rate guys can't last very long...

Yep to many of those guys entering the space. will see how it plays out. Wondering what Isaac things about high risk guys entering the A paper space....

[isaacdstern]

Marcus knows exactly what I think about it

[MCNetwork]

A funder needs to stick to his core competency and crush it. Diversification of product offerings isn't very effective in this business. A+ paper carries high risk as well because the factors are low and dollar amounts are very high. Since C/D paper deals are usually low dollar amounts, then a high risk lender aggressively entering the A+ space will find the blended rate of his overall portfolio come dangerously close towards breakeven. An A paper whale who defaults on you can be a gut shot.

[mcaguru]

A funder needs to stick to his core competency and crush it. Diversification of product offerings isn't very effective in this business. A+ paper carries high risk as well because the factors are low and dollar amounts are very high. Since C/D paper deals are usually low dollar amounts, then a high risk lender aggressively entering the A+ space will find the blended rate of his overall portfolio come dangerously close towards breakeven. An A paper whale who defaults on you can be a gut shot.

It will be interesting to see.. My guess is R&D is going to be a big department at the high risk houses in 2017....

[AndyYSCISOdept]

I have an opinion about the low grade paper space and this is it (and J Celifarco will agree with me)

The key to being able to navigate the low grade paper space is flexibility. Its easy to fund A and B paper because everything lines up easy, but the low grade paper space is like trying to put together Ikea furniture with drunk goggles on...meaning that regardless of how easy it may look at the beginning, difficulties are right around the corner.

And truth be told, if you are willing to put in the effort and deal with the inevitable headaches that come with the space (and Ikea furniture) there is a fortune to be made by adequately serving an under-served space.

[J.Celifarco]

I have an opinion about the low grade paper space and this is it (and J Celifarco will agree with me)

The key to being able to navigate the low grade paper space is flexibility. Its easy to fund A and B paper because everything lines up easy, but the low grade paper space is like trying to put together Ikea furniture with drunk goggles on...meaning that regardless of how easy it may look at the beginning, difficulties are right around the corner.

And truth be told, if you are willing to put in the effort and deal with the inevitable headaches that come with the space (and Ikea furniture) there is a fortune to be made by adequately serving an under-served space.

there are definitely a lot more headaches with these files like andy said but then there is a reason they are short term high cost deals.. These merchants are either new business' , awful credit, or bad banks. Any and all of these reasons are going to make the deal harder to get done, but being able to monetize these deals is important if ISO's want to be able to spend what is necessary on marketing to get the higher quality higher dollar amount A paper deals

[Cfairbank]

There's a lot more to going "A" paper than just lowering rate / lengthening term. Offering "A" paper pricing doesn't make it an "A" paper product, it would require a pretty significant adjustment to a high risk players' current business model, underwriting, contracts, fee schedule, etc.. Look forward to see how this plays out!

[mcaguru]

There's a lot more to going "A" paper than just lowering rate / lengthening term. Offering "A" paper pricing doesn't make it an "A" paper product, it would require a pretty significant adjustment to a high risk players' current business model, underwriting, contracts, fee schedule, etc.. Look forward to see how this plays out!

Yep its called "Human Capital" easily acquired to handle that part. I bring this up because Yulina requested "predictions" so i am adding to what i hear in the grapevines...

[YuliyaG]

I cant give away any specifics but we are seeing a record amount of submissions from our isos and signing up 2-3 new isos daily which says growth to me.

In terms of funding we are a funding a record amount of deals and putting out more money than ever before...again this says growth to me.

I hear you, but one really interesting indicator of the stuff about to hit the fan is that one of your reps who happened to have a long standing relationship with a business partner of mine, stole from us. Desperation inspires theft.

Incidentally, this same rep helped spend the money a guy with the initials G.S. stole from you. You, me, G.S. are all from same town so when he was run into and let it fly, I was shocked at how G.S. and the rep who sits in your office splurged the money G.S. stole from you.

He stole from you (enjoying bottle service at strip clubs with your money knowing full well what was going on is a form of theft), he stole from me, and I bet he's scheming right now. "Stand up guys" are becoming more and more crooked... I'd watch out.

That aside, I still track data and I'm seeing the well drying up. Hats off to you for having staying power.

[mcaguru]

I hear you, but one really interesting indicator of the stuff about to hit the fan is that one of your reps who happened to have a long standing relationship with a business partner of mine, stole from us. Desperation inspires theft.

Incidentally, this same rep helped spend the money a guy with the initials G.S. stole from you. You, me, G.S. are all from same town so when he was run into and let it fly, I was shocked at how G.S. and the rep who sits in your office splurged the money G.S. stole from you.

He stole from you (enjoying bottle service at strip clubs with your money knowing full well what was going on is a form of theft), he stole from me, and I bet he's scheming right now. "Stand up guys" are becoming more and more crooked... I'd watch out.

That aside, I still track data and I'm seeing the well drying up. Hats off to you for having staying power.

What well do you see drying up ?

[WhoisKingsley]

The sh*t show is that of what people have made it to be. Predictions are predicated on the snowball effect of what you and everyone put into it. Including yourself with your UCC business- no matter how pretty it was made, your reaped from collecting data and openly invited "crooks". Your predictions probably can only be perceived on the experience and type of people who were attracted to what you offer(ed).

1. Crooked creativity? We're past this. WAYYYYYYYYYYYYYYYYYYYY past this. If anything it's getting unveiled day by day. Legal? What's the point? Half of anyone who is participating in these ways of doing business can't afford a $10 monthly gmail subscription let alone someone to make sure the company's process, content, and documents are up to par. Now, if you are talking about default collections and legal= different story.

2. The Funding Principals at most of these companies are not aware of all of the circumventing that exists. I cannot speak on behalf of all but I can say without a doubt that backdooring will decline because of advances and innovations to certain processes to make outside sales and direct funding play nice together. The crooks will have a harder time when this happens. Don't believe me? Wait.

3. ...I'm sorry but purchasing UCCs (whether you are abusing them or not) is the first "ugly" alliance to creatively and "cooperatively" steal MCAs from Funders... whichhhhhh is what your company does/did? I am so confused on what you are trying to imply.

Case in point, everyone as a whole decides their fate of the "Sh*t show" they create for themselves that impacts everyone else.

[WhoisKingsley]

As customer acquisition costs continue to increase, it gets harder and harder to find merchants without a huge marketing spend. That's why the 1.15 buy rate guys can't last very long...

Not only that- but the fact that there is a larger/quicker return on the higher risk/short term products is one thing people need to understand. The syndication and investment coming in sees HUGE dollar signs on this aspect and a 1.15 is NOT the appetite.

and 100% correct - Your 1.15, A/B quality, 1st/2nd, and longer term paper is struggling for many different reasons. You really have to understand the in depth of everything to really see what is happening here and how the mass market (broker market) can really turn things around.

[YuliyaG]

The sh*t show is that of what people have made it to be. Predictions are predicated on the snowball effect of what you and everyone put into it. Including yourself with your UCC business- no matter how pretty it was made, your reaped from collecting data and openly invited "crooks". Your predictions probably can only be perceived on the experience and type of people who were attracted to what you offer(ed).

1. Crooked creativity? We're past this. WAYYYYYYYYYYYYYYYYYYYY past this. If anything it's getting unveiled day by day. Legal? What's the point? Half of anyone who is participating in these ways of doing business can't afford a $10 monthly gmail subscription let alone someone to make sure the companies process, content, and documents are up to par. Now, if you are talking about default collections and legal= different story.

2. The Funding Principals at most of these companies are not aware of all of the circumventing that exists. I cannot speak on behalf of all but I can say without a doubt that backdooring will decline because of advances and innovations to certain processes to make outside sales and direct funding play nice together. The crooks will have a harder time when this happens. Don't believe me? Wait.

3. ...I'm sorry but purchasing UCCs (whether you are abusing them or not) is the first "ugly" alliance to creatively and "cooperatively" steal MCAs from Funders... whichhhhhh is what your company does/did? I am so confused on what you are trying to imply.

Case in point, everyone as a whole decides their fate of the "Sh*t show" they create for themselves that impacts everyone else.

Ms. Kingsley

You did everything you could to extract UCC's from us through my business partner. You used a combination of b.s. and charm to ultimately fail at securing the data on an "IOU" basis. Inasmuch as you were looking to reap the profits from the data, should you be classified as a "crook?" Your approach was definitely creative. I'll give you that.

[Funder Mark]

Not only that- but the fact that there is a larger/quicker return on the higher risk/short term products is one thing people need to understand. The syndication and investment coming in sees HUGE dollar signs on this aspect and a 1.15 is NOT the appetite.

and 100% correct - Your 1.15, A/B quality, 1st/2nd, and longer term paper is struggling for many different reasons. You really have to understand the in depth of everything to really see what is happening here and how the mass market (broker market) can really turn things around.

Not always is there a high return, I just had a $55k deal go bad after 3 payments.