[LJH365]

Merchant's expectations along with his ability to calculate what these 3 daily payments would end up doing to his cashflow, are both out of whack.

- Number one, he's not getting $35,000 with a 1.23 factor for a 7 month term on a 3rd position. Not happening.

- Number two, a 3rd position stack is going to do nothing but start taking too much of his gross sales leading to NSFs/Overdrafts through the roof.

- You need to explain that to the merchant along with showing him how a 3rd position would likely lead to about 30% - 40% of his monthly gross going solely to payback these 3 stacks. Tell him that once he pays down On Deck and Rapid to a particular percentage, you will look at doing a 1st position pay-off/refinance.

- I would take the ethical road by telling your merchant you don't feel comfortable doing any 3rd position stack as you know it will harm his cashflow, on top of that, you don't want to violate any legal provisions that you might have setup with either On Deck or Rapid in relation to stacking (which are not allowed).

Now, after all of that, if the merchant gets pissed off and decides to call a competitor at Piggy Back Capital or Stacks Are Us for a 3rd position, then hell, let him go. He will be calling you back by December talking about how his cashflow is now screwed up because he can't afford 30% of his gross going to payback these 3 deals, and how you were "right all along".

But if I were you, I would take the high road/ethical route and not do a 3rd position. He can't afford it.

Indeed John thanks. I did just that. Thank you for your insight. Merchant was really pushing me to probably sales from an upcoming trade show, but "probably" is the operative word.