[Goliathfunding]

Looking for a lender that will fund a merchant that has very very few low balance days typically 1-2 every month currently has 15k out, monthly revenue 35k, looking for anything.

[iso@wallfunding]

Wall can get it done, reach out for our ISO agreement.

[Zach]

WBL can put together loans for borrowers with low average balances, negative days, and NSF's.

[AdvanceFund]

Looking for a lender that will fund a merchant that has very very few low balance days typically 1-2 every month currently has 15k out, monthly revenue 35k, looking for anything.

There are a few types of deals that we out-compete our competitors. This is one of them. Feel free to reach out and I will get you a quick answer.

[PJLamar38]

You can get this done literally anywhere.

[Phil T]

Yellowstone will give you a very aggressive offer, minimal stips and fast funding.

Team OBS
ISO Development – Funding Department

Yellowstone Capital LLC
Direct: (646) 774-4805
Fax: (978) 367-0504
Submissions@Yellowstonecapllc.com
www.yellowstonecap.com

[Funder Mark]

Yellowstone will give you a very aggressive offer, minimal stips and fast funding.

Team OBS
ISO Development – Funding Department

Yellowstone Capital LLC
Direct: (646) 774-4805
Fax: (978) 367-0504
Submissions@Yellowstonecapllc.com
www.yellowstonecap.com

And charge a higher rate with higher fees.

[Michael I]

And charge a higher rate with higher fees.

to be fair the above lenders are not much better if better at all .what i learnt with yellowstone and pearl is the ridiculous fees are the individual rep not the company . you need to find yourself a good rep .

[AndyYSCISOdept]

to be fair the above lenders are not much better if better at all .what i learnt with yellowstone and pearl is the ridiculous fees are the individual rep not the company . you need to find yourself a good rep .

TRuer words have never been spoken. As Ive said many times my team doesn't add any additional fees. I know that for the brokers out there this is a very important factor.

[HDF]

to be fair the above lenders are not much better if better at all .what i learnt with yellowstone and pearl is the ridiculous fees are the individual rep not the company . you need to find yourself a good rep .

This, in and of itself, is a big problem.

[Michael I]

This, in and of itself, is a big problem.

agreed , i wonder if yellowstone and pearl know how much business they lose because of their own greedy reps

[Cfairbank]

Yellowstone will give you a very aggressive offer, minimal stips and fast funding.

Team OBS
ISO Development – Funding Department

Yellowstone Capital LLC
Direct: (646) 774-4805
Fax: (978) 367-0504
Submissions@Yellowstonecapllc.com
www.yellowstonecap.com

Very curious: what defines an "aggressive" offer from YSC? Are you talking about the ISO commission? Because I'm pretty sure most shops would beat your average deal (at least your average deal from your production in 2015 -- 66 day 1.45x with 10% in upfront fees). Or are you guys trying to go "up market" and offer better products?

This is not meant to be a joke, or just to call you guys out (though the fact that your average deal is that expensive I find nuts given the volume you guys do) -- I am genuinely curious what a "very aggressive offer" means in the high risk space in today's market. Despite my involvement in this space for over a decade as an M&A banker first and then lender, I still am trying to figure out what the end goal is for the high risk / stacking product -- in the past several years, as stacking got crazier and crazier with more and more stacking shops popping up and pumping out pretty substantial volume, I always assumed that, eventually, increased competition should lead to a better product; strangely enough, it's had the opposite effect; the products actually have somehow gotten worse. I guess it's just too hard to price shop, and given how expensive all the high risk options are, commission rate and trust between the ISO and funder in many ways becomes the primary driver of placement (i.e. a high risk product is a true commodity even from a pricing standpoint since the pricing boxes are generally so tight).

This is where I give Marcus credit -- his value proposition is clear, and he won't let you forget those double digit commissions!

[AndyYSCISOdept]

Very curious: what defines an "aggressive" offer from YSC? Are you talking about the ISO commission? Because I'm pretty sure most shops would beat your average deal (at least your average deal from your production in 2015 -- 66 day 1.45x with 10% in upfront fees). Or are you guys trying to go "up market" and offer better products?

This is not meant to be a joke, or just to call you guys out (though the fact that your average deal is that expensive I find nuts given the volume you guys do) -- I am genuinely curious what a "very aggressive offer" means in the high risk space in today's market. Despite my involvement in this space for over a decade as an M&A banker first and then lender, I still am trying to figure out what the end goal is for the high risk / stacking product -- in the past several years, as stacking got crazier and crazier with more and more stacking shops popping up and pumping out pretty substantial volume, I always assumed that, eventually, increased competition should lead to a better product; strangely enough, it's had the opposite effect; the products actually have somehow gotten worse. I guess it's just too hard to price shop, and given how expensive all the high risk options are, commission rate and trust between the ISO and funder in many ways becomes the primary driver of placement (i.e. a high risk product is a true commodity even from a pricing standpoint since the pricing boxes are generally so tight).

This is where I give Marcus credit -- his value proposition is clear, and he won't let you forget those double digit commissions!

Well, given that YSC is providing funding at such a large volume to merchants that for the most part aren't being approved anywhere else Id say the answer to your question is self explanatory. However, I can get more in-depth if you'd like.

[Cfairbank]

Well, given that YSC is providing funding at such a large volume to merchants that for the most part aren't being approved anywhere else Id say the answer to your question is self explanatory. However, I can get more in-depth if you'd like.

Andy, I'd love additional insight because I have banked a lot of the high risk companies and know how profitable they are -- margins in the high risk space are very strong (as you know), well above any form of risk-adjusted cost of capital in an efficient market. If merchants are priced at what they are willing to pay (as you stated) instead of what their risk adjusted price should be, that shows you the market is flawed. So here's what I want to understand if you are willing to provide feedback:

Take your average deal of 1.45x over 3 months, 10% fee -- that is an annualized cost of capital of 410%. Let's assume a 40% renewal rate to be conservative and the advances are refied at 2/3 paid down. Since you guys deduct the remaining balance (including the factor/margin income -- i.e. double dipping), your annualized return on those deals that pay back goes up to over 610%. Isaac, if I remember properly, stated your default rates are 13%. Now lets annualize that rate to compare apples to apples and assume the losses are evenly distributed (this is admittedly simplified (and flawed) math, but it illustrates the magnitude of the the net return) and you get to 98%. So you are looking at net annualized returns of over 300% on non-renewals, and over 500% on renewals.

Or, if you want to forget about annualizing it, just look at factor rates plus origination fee and deduct the default rate. Under any scenario, those are much higher returns than would be expected for the risk you are taking on. What am I missing? Why can't the high risk provide a true risk adjusted product with that much excess margin?

[AndyYSCISOdept]

Andy, I'd love additional insight because I have banked a lot of the high risk companies and know how profitable they are -- margins in the high risk space are very strong (as you know), well above any form of risk-adjusted cost of capital in an efficient market. If merchants are priced at what they are willing to pay (as you stated) instead of what their risk adjusted price should be, that shows you the market is flawed. So here's what I want to understand if you are willing to provide feedback:

Take your average deal of 1.45x over 3 months, 10% fee -- that is an annualized cost of capital of 410%. Let's assume a 40% renewal rate to be conservative and the advances are refied at 2/3 paid down. Since you guys deduct the remaining balance (including the factor/margin income -- i.e. double dipping), your annualized return on those deals that pay back goes up to over 610%. Isaac, if I remember properly, stated your default rates are 13%. Now lets annualize that rate to compare apples to apples and assume the losses are evenly distributed (this is admittedly simplified (and flawed) math, but it illustrates the magnitude of the the net return) and you get to 98%. So you are looking at net annualized returns of over 300% on non-renewals, and over 500% on renewals.

Or, if you want to forget about annualizing it, just look at factor rates plus origination fee and deduct the default rate. Under any scenario, those are much higher returns than would be expected for the risk you are taking on. What am I missing? Why can't the high risk provide a true risk adjusted product with that much excess margin?

Id love to give you more accurate and detailed information, so please private message or shoot me an email. The fact remains that YSC provides a service and we make no apologies for providing such, having said that we have always been and will always be open to those that ask for information (personal requests)

[Cfairbank]

Well, given that YSC is providing funding at such a large volume to merchants that for the most part aren't being approved anywhere else Id say the answer to your question is self explanatory. However, I can get more in-depth if you'd like.

And to the original question, I am still curious what a "very aggressive" offer means -- are you guys going up market, or is that based on ISO commission?

[AndyYSCISOdept]

And to the original question, I am still curious what a "very aggressive" offer means -- are you guys going up market, or is that based on ISO commission?

Very aggressive is a fluid term based on the quality of merchant. YSC has always tried to give the best offer (most $, best commission, longest term) given the type of files we receive. Pretty sure that isn't the first time anyone is hearing that.

[FundedBROTHA]

WOW!

No one is putting a gun to these merchant's head to take YS deals.

[MCABroker]

The hate is REAL... If you're not working with Yellowstone then you're leaving money on the table. Find a good rep and you will see for yourself... Andy is the best!

[Cfairbank]

The hate is REAL... If you're not working with Yellowstone then you're leaving money on the table. Find a good rep and you will see for yourself... Andy is the best!

These types of discussions and requests to support the viability/suitability of a product (any product, not just the YSC product) for the customer have have nothing to do with "hate" of YSC or anyone else in this space -- Isaac has clearly done a great job taking advantage of an opportunity in the market to build a relatively large company that is intended to address a specific, underserved niche in the market, and I congratulate him and his team on his success. But with that impressive growth, comes greater responsibility and a bigger target on your back -- and a heightened need to support that your product isn't predatory.

Putting the impact on merchants, the added risk stacking adds to a first position loan (not to mention the legality of it), and the increased cost of capital aside for a second, this is why you should care about the YSC product and their position in the market. Regardless of my view, your view, or the view of anyone else on this forum's of the YSC product, think about this: what impact does it's product (especially at their size and the relatively frequent video publications that can make an outsider view this space like just a bunch of 90s stock brokers with cash being generated out hand over fist) have on the long term viability of the ENTIRE space? I am closely involved on the regulatory side, and there still is a lot of confusion between different types of products, and thats a big problem. If the CFPB (or whoever is the ulimtate regulator), decides there is no need to differentiate between what OnDeck is offering compared to a confusing, stacked 3 month 1.45x with 10% in junk fees, this space will get shut down. I am confident this won't happen because the difference, to me at least, should be so obvious, but that doesn't mean it's not a real threat. There are many CDFIs that would love to see all forms of alternative finance go away (and many are very vocal to that point) and are likely jumping for joy whenever they access a high risk contract -- and they are using a lot of the high risk advances to show how "egregious" and "predatory" the whole space is. Look at the Opportunity Fund's report on this space if you haven't yet. YSC is big enough and not hiding their product or success, and that should make all market participants nervous. If companies can't support that they are in fact offering a non-predatory / viable product, it's a problem, especially when a company is the size of YSC. And this is a risk that would impact everybody on this forum -- the difference between what OnDeck is offering and a high risk product is massive, but there's no guarantee that folks are able or willing to differentiate.

This is why I keep pushing people to support (mathematically) your product and asking questions -- I firmly believe you can offer a non-predatory "high risk" product, and that companies can really build a sustainable business while still generating great returns for their shareholders. But folks that don't listen now won't be around when the dust settles, that's a fact.

[anonymous]

YSC is one of the most "necessary" funders out there to those who are unable to adequately do their job. At the end of the day, we find the most suitable capital provider for businesses who are seeking capital - "brokering" a transaction. If as a broker, you need to send your file to another (better) broker to get it approved, you are pathetic and have no business doing this for a living. Furthermore, you are just adding in additional fees to a product that is already under scrutiny to begin with. That said, YSC does have in-house funds (as everyone knows) and without the fees, coming from Andy, the offers (for those merchants, given qualifications) are strong to very strong. So it is tough to label them as good or bad, as there are several aspects to their business. Again, barrier for entry would eliminate co-brokering (for the most part). Not going to comment on debt traps as that isn't going anywhere on this thread. But if you wipe away all the fees and bad press, there is legitimate value in YSC.

[Cfairbank]

YSC is one of the most "necessary" funders out there to those who are unable to adequately do their job. At the end of the day, we find the most suitable capital provider for businesses who are seeking capital - "brokering" a transaction. If as a broker, you need to send your file to another (better) broker to get it approved, you are pathetic and have no business doing this for a living. Furthermore, you are just adding in additional fees to a product that is already under scrutiny to begin with. That said, YSC does have in-house funds (as everyone knows) and without the fees, coming from Andy, the offers (for those merchants, given qualifications) are strong to very strong. So it is tough to label them as good or bad, as there are several aspects to their business. Again, barrier for entry would eliminate co-brokering (for the most part). Not going to comment on debt traps as that isn't going anywhere on this thread. But if you wipe away all the fees and bad press, there is legitimate value in YSC.

You can't ignore the debt traps because that is the battle everyone in any "high cost" space needs to defend. If you read any of my entries, there is at least one point that is constant: taking Yellowstone or any other expensive product ONCE is not, nor will it ever be, a "problem" -- they can support a fantastic segment of the market that way. It's the part of the argument you are looking to ignore that is going to create the problem for them and many others.

[anonymous]

You can't ignore the debt traps because that is the battle everyone in any "high cost" space needs to defend. If you read any of my entries, there is at least one point that is constant: taking Yellowstone or any other expensive product ONCE is not, nor will it ever be, a "problem" -- they can support a fantastic segment of the market that way. It's the part of the argument you are looking to ignore that is going to create the problem for them and many others.

I'm not looking to ignore it in the least bit, just don't think you'll get the answers you're looking for out of this thread. And if you didn't (with the time and effort put into the posts/examples), I don't think I'm getting anywhere. So rather ravaging the same topic to no avail, thought it might be a good idea to highlight a couple other points. I DO NOT disagree with you at all Carl.

...in fact, I reached out to do business with you about a month or so back after following your posts for a while. Never heard anything back. ....dick lol

[Cfairbank]

I'm not looking to ignore it in the least bit, just don't think you'll get the answers you're looking for out of this thread. And if you didn't (with the time and effort put into the posts/examples), I don't think I'm getting anywhere. So rather ravaging the same topic to no avail, thought it might be a good idea to highlight a couple other points. I DO NOT disagree with you at all Carl.

...in fact, I reached out to do business with you about a month or so back after following your posts for a while. Never heard anything back. ....dick lol

Fair enough... my fault, I misunderstood you intention and do appreciate and understand your points. In general, all I'm asking for is for folks to clean up their products, do sufficient underwriting and math to ensure the product is not likely to destroy a business, and try to offer the best product they can. It benefits everyone in the space, not just the lender/cash advance company that cleans up their product.

To your second point, that would be very bizarre if you didn't get a response from us, my sales guys are very responsive. ssafirstein@breakoutfinance.com heads up the group. direct dial 703-852-6013. My sincerest apologies, I will see what happened.

[mcaguru]

Carl you are right on time with concerns for Small business USA. Its so much of a conversation NOT just in this forum! it made its way into almost evrey campaign speece rally how Small Business Owners are struggling under policy and practices and believe government regulation is # 1 issues harming the Small business community!

https://www.aei.org/publication/regu...ess-formation/