[joerusso85]

I hope this is the correct place to post this.

I have a Client who wants to expand his collections business and was discussing MCA collections. His business is strictly consumer collections right now which is heavily regulated by FDCPA. I did some reading on here but I really couldn't find what I was looking for.

How successful are MCA companies at collecting? If your purchasing receivables and the business closes, it seems like there is little recourse. If they stay open I can see how that may present an opportunity to collect something, although they merchant could close at any time. As far as I know there isn't the same collection regulation as consumer.

Just trying to get some insight as this is a subject that I know very little about.

Thanks!

[joerusso85]

130+ Views and np comments?
I spent some time reading through old threads and this is the conclusion I came to.
If you get a judgement you all set but if the merchant decides to get an attorney, this can become an expensive proposition.
Lets say they have a 20k advance at 1.25 over 9 months. They close the business and we go at them personally. Since it's a receivables purchase and an individual really can't guarantee what the receivables of a company will be, it would really look like a loan on paper. Now that "loan" will fall into usury territory and to me it's not worth litigating. My client think this is the "next big collections market" but I think it's a risky proposition unless your just buying default judgements. Am I missing something here?

[anydealfunded]

The client "guaranteed performance" of the business. This guarantee of performance can be interpreted as a simple pg. Remember jury trials are waived and lenders file suit in their home court. If the client doesn't show up to court a default judgement is granted and an attorney is hired in the particular state of default to collect. If the merchant shows up most of the time a judgement is granted. Every mca lawsuit doesn't just sue the business but also personally.

[Cfairbank]

130+ Views and np comments?
I spent some time reading through old threads and this is the conclusion I came to.
If you get a judgement you all set but if the merchant decides to get an attorney, this can become an expensive proposition.
Lets say they have a 20k advance at 1.25 over 9 months. They close the business and we go at them personally. Since it's a receivables purchase and an individual really can't guarantee what the receivables of a company will be, it would really look like a loan on paper. Now that "loan" will fall into usury territory and to me it's not worth litigating. My client think this is the "next big collections market" but I think it's a risky proposition unless your just buying default judgements. Am I missing something here?

Most merchants do actually contractually default before closing their business (e.g. stopped or rejected payments). Even if they don't, many folks (mostly in the high risk space) try to collect by deeming a default with crazy terms in the contract (e.g. two missed payments). 10% collected is a benchmark used by many collection firms.

The client "guaranteed performance" of the business.

If it's a MCA not a loan, it's a guarantee of performance of the terms of the contract, not performance of the business. This means they technically just need to follow the contract, and there should be no recourse even if business fails. But pursuant to the first point, that rarely happens.

[joerusso85]

I know nothing about the MCA collection process but with what I have read, it seems massive regulation is coming. Even as a collector, there has to be rules. Right now there are no rules. How do you go to court and justify 200% interest? 1st position lenders with a max rate can be justified but those after, there seems like a whole host of litigation issues.

[Karen37a]

As stated it isnt a loan..its an advance or fixed contract so it isnt interest because it isnt a bank.

You stated your client wants to expand his collection business? What type of business are you in that you have a "client" that does collections? You will have to enter into the business to understand all the nuances of it..

Where are you getting your 200% number from?The dd 2/3 renewals out?

So are you saying if I have a product that I sell in my business...lets just say its tshirts, or makeup from china, that I cant upsell it 200% or they regulate it?
If I am a contractor...i cant make 1 million on a bid /contract for services? Oh only money.

I am not the great advocate for multiple D paper "Loans" or advances and stacking 3/4 wide.But in the end you need to understand the default ratios and risk involved, costs of doing business.

If you were going to use 1million dollars of your own money and turn yourself into a lender , if 10-20% defaulted how much money do you have to make on the other 800 k just to break even? What about rent/ staff/ commission /payroll, assuming thats your money to lend and you do not have an investor or hedge fund who wants a return on their investment

I would think that 13% you are bankrupt..not sure.You have to keep it below 9%? I am not lending..yet
I know I wouldnt be doing this for free or to just make a "slight" profit.

The Banks are not lending for a reason..Dodd frank act and also how do you profit on low interest loans???...you dont, so you dont lend.
Ta daa I am not a stockbroker anymore nor mortgage broker because the money dried up.

[Karen37a]

I saw an episode of Bar rescue. This guy was a comedian and he was a really really really bad one with knock knock jokes from elementary school in the 50's.

He was the headline act, every single night for yearsssssssssss. he kept saying "its my club". There were 2 people in the audience who I think sat there because they got free water and free peanuts. I wouldnt want to watch a great comedian everynight, night after night after night for years,let alone him. The guy was convinced he was the greatest "draw" and with out him the business would fail. ( delusional) the business was failing. They were going to bail him out but they wanted him to only go on wed night? Something like this. I think he refused..I stopped watching the show because he reminded me of my "clients".

Some of these people had a temporary setback in their business and need a short time cash infusion ( or they are under and trying to grab one advance for the road), some expand or want to and cant find money to do so, even though it would double $$ their profits, some contruction workers are spread thin, new job, didnt get paid in full from the last one. And then some lie, and lie and lie.And some are just bad business people and their bad business habits cant get bailed out with $$.

Regulation? These people are killng me on the phone,( I am pre pre underwriting these files) and I am pretty tough.

I think there needs to be a regulation to protect me from them..I am getting an ulcer and grey hair.

You have to learn everything in this business by doing it .( and some you dont want to know) You cant learn to ride a bike from a book.

[joerusso85]

I have clients that I do accounting and business development research, since you asked. Keep in mind I really know nothing about the MCA business and that's the reason I started reading this site.

I understand the 1 and maybe the 2nd position, but I've seen some threads where people are getting 3rd 4th and even more loans, then complain about merchant default. I'm no fan of the govt regulating anything, hell they can't regulate themselves, but it seems like that is going to be the next bubble. Again, just an opinion.

Consumer collections is a nightmare. 1 wrong word and you get sued. At least there are no regulations regarding business collections and that's the reason we had discussed MCA collections. I guess the big problem is you cant get blood from a stone and if a merchant chooses to litigate, it turns into a costly proposition.

[Karen37a]

Hard to quantify thru a message board , so many factors are in play.

# 1 the money that the lenders have is not a bottomless pit, they fund X amount of business per year each funder is different, they state the amount of funded advances in the past so therefore it can't be a bubble because more people want money then there is available no matter what anyone will say. They are not going to get it. Some don't qualify. These are unsecured so they have a limit. This isn't the Federal reserve printing money causing a bubble and inflation.
Ive raised money in private placements/ venture capital for years...limited funds ( nice to give the money away instead of taking it)

#2 Businesses pay back the money and never need it again,hit lotto, become cash flush from the $$ they used for expansion or growth , sell their business, pass it on to their kids, die or go bankrupt .Oh yeah, they renew as well and that's where the profit lies. Most lenders and brokers want Financially responsible borrowers to come back when they are at the true point of renewal and take more money. Not go out and dig yourself a hole default cause drama.

I want a huge book of business that I just call up and say..Hey happy birthday, Merry Christmas, Happy Chanukah , do you want more money? ( I do not have to call they are calling me/us before the halfway point and some are harassing me/us for more money, then saying ...well I will go somewhere else when told no you have to wait )

# 3 I am not going to go into the collection process, or tip anyone's hand but I think you send Vito to meet him in a back alley ( Joke).

#4 Merchants are not going to litigate, for what? Them borrowing money and breaking contractual agreements. Tortious interference. You keep bringing up 2nd 3rd positions etc. They sign something saying they are not going to do that, not over extend themselves. So they lie then they sue because they got caught in a lie or worse yet fraud?

You are new to this business/topic .People do crazy things for money. These merchants are not poor lil ole kindergarten teachers taken advantage of by a big bad bully . Some of them are con artists, some are ruthless business men ,some are nice..just like people you meet, it's on a case by case basis.


How many true friends do you have in real life? Why?

psst...the Lenders on here are not pushovers either, hence no one commenting. No one got to where they are, including me, by not being book smart, street smart and Financially savvy. Trust me they didn't make it to the top because they are millionaires handing out money not getting it back.They are millionaires who are business Financial gurus and know this business inside and out.



Gl in your quest.

[joerusso85]

#3 I had to laugh... all I could think about was the scene in the Sopranos with Vito... now I need a Rolaids and a mind eraser.

My post is strictly on advising my client on MCA collections. I keep a diverse portfolio and we will leave it at that.

#4 Collections is like anything in life... risk vs reward.. If 75% of you defaults are no shows to court then fine but if 25% retain counsel, your losing profit. So you get a judgement..try collecting on a bankrupt client. My original post was risk vs reward on MCA debt. Karen37a, I read your posts on other topics and you stated how "pissed" you would be if a merchant defaulted. I just don't understand how that resolves the problem.

I have read Carl's posts and he seems spot on.

[joerusso85]

After reading this forum, I would be better to represent the merchant. $750 per month until resolved or file a BK. I will advise my client to stay far away from collections in this business. Of course, I can't say the same for my firm representing merchants. After reading this forum for 2 days, I have seen 1 person who has ethics.

All predators get eaten by the next bigger, better predator. Hunt and you will understand.

[Karen37a]

I knew you were asking for a reason..thats why I asked you what kind of client that you had, cause I knew you were lying.

As far as ethics go. You do not know me and know what I do to help my clients. I give people strategies to put them in a better position so your "predator /hunter , go hunt and you will understand" comment is amusing.And as far as hunting...Ive been on wall st since 1986..i guess one year after you were born cause you name has the 85 in it.

I left a message for Carl on sat, but i guess someone of such low moral fiber like me cant get a return call on Sat.

Just so you know. I did loss mitigation in the past , which is what it is called and I have seen many so called "loss mitigation, debt restructuring firms" get raided over the years. I did foreclosure defence as well so you are talking to the wrong person.

They had to create a law called dual tracking to stop the lenders from foreclosing while in the midst of negotiations and then they created something called the MARS act, which stops yahoos like you from charging upfront a fee to help someone , then taking off to costa rica without lifting a finger to help the person you just charged .

750 a month is excessive and almost illegal. I hope you get on the back end of one of my deals .

Make sure you do not charge it if you do not have a Mars account set up ** now you know the law, and don't touch the money until work is performed. And do not coach someone into doing something that is irresponsible, or fraudulent you can get in trouble as well.

Its kinda funny that you think you can wander on here and try to sneak questions in to burn the people you are asking the questions to.

I saw thru though it **wink ..guess I am a better predator than you think and some of these lenders make me look like Mary Poppins.

BTW. Guys like you who think they can coach clients into non payment, ruining their credit for the next 7-10 years, usually get stung by the people you were coaching...too bad I cant see it live so i can get popcorn and laugh.

You say they have no ethics? Your industry is worse. You are just trying to find higher ground to stick someone

[Karen37a]

ok Carl responded back just now..lol I was kidding about the low moral fiber. ( it was Sat and people are closed)

Thanks for responding it wasn't an emergency

[joerusso85]

Karen37a,
You are correct in saying that you don't know me. To quote a fiend, "lairs are only people who are afraid." I fear nobody.

I do consult for companies in general business matters as well as handle higher level accounting. If you honestly think I would make a living my telling merchants not to pay you aren't as smart as you keep telling everyone. I noticed in all your post you feel the need to justify your credentials and past experience. Who are you trying to convince?

No I wasn't born in 85. If it's even still available I used that name way back to piss off some Nigerian scammers.. long but funny story.

My comment was more of an off the cuff remark after reading A TON of crap that has been slung on this forum. I saw quite a few bragging about doing 4th,5th and 6th positions. Whatever your position on that is fine, your company, your deal.

With that being said, I can guarantee you this. You will not see me or any company I am involved with telling merchants not to pay and deal with a consolidation company, EVER.

So go get your popcorn and wait for the show, it's going to me a long wait.

[Karen37a]

You are the one who said only 1 person has ethics on this board. This community is smaller than you think and most of us know each other or are 1 person removed.

Was the ethics comment off the cuff??? You telling me to go hunt, was that off the cuff?

You think people on these boards spend time typing to a stranger because they have nothing better to do.

Alot of people know me so i am not "justifyng" myself, I am making a case for a system and way of doing business.But I will not anymore because I am giving away secrets and sales strategies to competition.

And since you said that. I have had numerous conversations on the phone with the owners of these so called unethical companies and have expressed my views on 4th , 5th , 6th positions. I have also expressed my views to the A paper 1 position and thier only way of doing business.

I came to a conclusion a long time ago. Its NOT MY MONEY and if I dont like it , lend them myself , I am not going to change their mind, and the merchant is ultimately responsible for over extending himself against advise and a contractual agreement to not do so.

I am glad you posted this and then you backpedaled. I will not be responding to you or your posts going forward and other people should follow suit .

And people who are watching...this is the reason the debates on "certain issues" within the Cash Advance Industry should be made in a private forum. And that is the reason I exposed him for what he is via a debate for all to see what type of people are watching.



****BTW you used the word Guarantee...if you were in Finance, or 'financial services" you would never utter that word out of your mouth, let alone put it in writing. it is on the banned word list. Rookie move

I wont be getting my popcorn because , i knew you couldn't do it and this wastes my time...I have 30 deals to close..how about you?

** don't bother answering i know its a big 0...hows that for convincing

[joerusso85]

You are the one who said only 1 person has ethics on this board. This community is smaller than you think and most of us know each other or are 1 person removed.

Was the ethics comment off the cuff??? You telling me to go hunt, was that off the cuff?

You think people on these boards spend time typing to a stranger because they have nothing better to do.

Alot of people know me so i am not "justifyng" myself, I am making a case for a system and way of doing business.But I will not anymore because I am giving away secrets and sales strategies to competition.

And since you said that. I have had numerous conversations on the phone with the owners of these so called unethical companies and have expressed my views on 4th , 5th , 6th positions. I have also expressed my views to the A paper 1 position and thier only way of doing business.

I came to a conclusion a long time ago. Its NOT MY MONEY and if I dont like it , lend them myself , I am not going to change their mind, and the merchant is ultimately responsible for over extending himself against advise and a contractual agreement to not do so.

I am glad you posted this and then you backpedaled. I will not be responding to you or your posts going forward and other people should follow suit .

And people who are watching...this is the reason the debates on "certain issues" within the Cash Advance Industry should be made in a private forum. And that is the reason I exposed him for what he is via a debate for all to see what type of people are watching.



****BTW you used the word Guarantee...if you were in Finance, or 'financial services" you would never utter that word out of your mouth, let alone put it in writing. it is on the banned word list. Rookie move

I wont be getting my popcorn because , i knew you couldn't do it and this wastes my time...I have 30 deals to close..how about you?

** don't bother answering i know its a big 0...hows that for convincing

How crap that was a mouthful.
I guess I'll address you as I see fit. I don't backpedal on anything. I was inquiring about collections. Seems to me best deal is to throw a BK and shove it up your ass. That's what big shots like you understand.

1st and foremost. I've said this before so I'll sat it again. I'M NOT IN THE MCA OR FINANCE BUSINESS. Are we clear or are you slow? I consult for a diverse group of clients which one happened to to be a collector. I was a question to which I looked for answers.

Give me the name of your company and I'll be sure to take note... (as you say hint, hint.). You really shouldn't play with fire.

Ethics... as you have posted in many of your posts, you explain to everyone how smart you are and then brag how you will make the most money off anyone, it's not your money. No that was not off the cuff. You screw people, expect to be screwed. I see everyone bragging about 15+ point and the merchant isn't getting screwed.. Let me guess you were a penny broker or a Biltmore princess. Pathetic

I'm sure many people know you, who cares? So does the homeless guy on 81st and 3rd.

As for the word guarantee, let me put this to your slow mind again. I GUARANTEE, I'll say it again I GUARANTEE. You will not see me or any company I am involved with telling merchants not to pay and deal with a consolidation company. This is not my business or what I do.

Your 30 deals, again. who cares. I saw the hooker by courthouse do 30 deals... congrats.

So with that said, run your mouth all you want, brag how your a big shot, but in the end you will learn your lesson. Stockbroker, mortgage broker, this broker that broker... time to retire.

[Karen37a]

I will retire soon when I get to my 100 mil in renewals..go learn how to close a deal


**to all that's watching, this has been a test...predators are looking to advise people to stop payment or go bk or stop payment .When people argue within the same mca space, it gives yahoos ammunition or ideas to try to profit. he is saying that people brag about points etc, then brags that he is the predators predator

I really do not care what this yahoo does, he is a small blip on the radar and he isn't advising bk on me, he is advising bk on you...not the first one not the last

he is a live example of why these conversations are taken backdoor. Claims he is a predator, asking me the name of my company and to not play with fire lol***


omg run...potsie is coming after me I have to go to fonzi my cousin and partner for help

Now you will be ignored have fun finding your way in collections aka loss mitigation.

Off to stay positive and make $$