[Zach]

What I am struggling with, and I'm not trying to start an argument, I'm just trying to understand what the intention is here if it’s not intended to be more confusing. For the 0% interest term product let’s take this example:

$60,000 ‘loan'
35% origination fee, deducting $21,000 from amount sent out the door
Small business receives $39K with a total payback of $60K
That’s a 1.54x factor rate.

Why not present it as that if it's a $39K loan at a 1.54x factor/$0.54 on the dollar, with a total payback of $60K? What's the point to market it the 0% interest way when we recognize there is a factor rate? One of the main issues going on in this space is about confusion around product cost and terms. Isn’t this just making it even more confusing, when the industry as a whole is trying to go in the opposite direction and make the product cost and terms as transparent as possible?

We know you're not trying to start an argument -- no worries man! It took us all a bit to wrap our heads around it.

Here's the economics of the "No Payment" product:

1. They market it as a 0% interest product because it is appealing (and true). We understand there is a "cost" to borrow the money.

2. The "No Payment" product (33% origination) equates to approximately a 1.54 factor rate over 6 months. True, there is a significant cost of capital here, however don't forget this -- the borrower makes NO PAYMENTS for 6 months. It's definitely a very unique product with a defined niche.

Also, their primary product seems to get misunderstood quite a bit as well:

1. Their primary product has interest rates that range from 14.9% to 149%. 14.9% is the equivalent of a 1.08 factor rate over 12 months, whereas 149% is the equivalent to around 1.4 for 6 months (not exactly). Their product is cheaper than almost our entire space, on average.

2. Their product typically has a 10-year amortization period with a monthly payment, which gives the borrower much greater flexibility with their repayment. Compare this to a cash advance over 6 months at a 1.30 factor rate, which may be the same TOTAL COST, but the payments are much higher and taken daily, with fees being added for each missed payment.

The LoanMe product is one of the most efficient in the space, and it is tragic to me that so many people misunderstand it and "beat them up" in an unfair way.