[channin19]

Two articles that highlight the self regulation that is occurring:

http://www.nytimes.com/2016/10/21/bu...e-iphone-share


This article describes a change that could have a dramatic effect in how government decides to approach advances / arch products.
http://www.wsj.com/articles/online-s...ces-1477299602

[J.Celifarco]

Two articles that highlight the self regulation that is occurring:

http://www.nytimes.com/2016/10/21/bu...e-iphone-share


This article describes a change that could have a dramatic effect in how government decides to approach advances / arch products.
http://www.wsj.com/articles/online-s...ces-1477299602

You actually believe there is a large group of people in the industry that would self impose regulation and think big picture instead of how much money can I make this second this minute???? I wish you were correct but there is no way the majority of the industry would agree to anything unless it was imposed by the government

[Chambo]

You actually believe there is a large group of people in the industry that would self impose regulation and think big picture instead of how much money can I make this second this minute???? I wish you were correct but there is no way the majority of the industry would agree to anything unless it was imposed by the government

you're right John, they will have to be forced too change

[HDF]

I'd expect the end market itself to absolutely demand standards as well over time.

[brokerCompany]

Unbelievable that some people are still begging for this government to impose regulations on their business.

[CreditGuy]

Nationalizing regulation makes a lot of sense because right now it is a patchwork of state level licensure, registrations, legal arenas, and precedents that creates all manner of untoward incentives and inefficient markets. By imploring nationalization earlier than later, it imposes a level playing field to ensure the best ideas and products flourish, rather than allow the market to be captured by those with deepest pockets to pay lawyers to understand and navigate the various legal and regulatory state level frameworks. National regulation and/or licensure actually promotes innovation, competition, and fairness in a long term and sustainable fashion. It is going to happen inevitably, so why not participate and make sure it isn't onerous and creates a workable market for all participants? Regulators have already started sniffing around. They aren't just going to say "nothing to see here" and go back about their other business.

[Cfairbank]

In my opinion, the SMART Box is a big step forward in self regulation from a pricing perspective and does improve the ability of merchants to compare cost of capital across products (and properly understand costs). As you can see in the press release, we endorsed it and will adopt it. Question is, who else will?

But regulation is coming, and I agree with CreditGuy, state by state is already a mess and currently costs hundreds of thousands of dollars just to lend properly -- well-structured Federal regulation will be a "good" thing for the space (even if it's initially "opt-in" regulation) -- we ALL have the opportunity now to help structure informed Federal regulation; fighting the inevitable is a losing battle and will only hurt us when it does come into place.

[Karen37a]

Carl I just won a bet about your "smart box". You said it quicker than I thought though. ( I said you would be advocating for it, because its in the best practices, that i read)

While your smart box might be a great idea for you, I am not sure if you are realizing the brokers job is to broker out a deal or BE the smart box.

And getting money isnt about price and price alone.

Why would anyone want to participate in it? Kind of like a Funders cld on steroids?

You cant take the salesperson out of the equation and automate the system . And who is in charge of this box? Why do we trust them with our deals?

Salespeople bring sales and money to the table and their is a reward/cost associated with doing so. Freedom of choice for the one who is the true driver of applications and the ability to control our destiny and not devalue the relationship building side of the sales process.This is why some of us are self employed.

I could discuss this with you further, not on a board because I am making these conclusions based on a split second clue I got from a debate that was posted...you mentioning it now makes me realize what I was thinking was correct.

Again Id be open to discuss what your goal is..not on these boards though.

[Karen37a]

There could be a "smart box calculator " that data could be entered into, not names or phone numbers for best pricing, like a jr underwriting engine

[Cfairbank]

Carl I just won a bet about your "smart box". You said it quicker than I thought though. ( I said you would be advocating for it, because its in the best practices, that i read)

While your smart box might be a great idea for you, I am not sure if you are realizing the brokers job is to broker out a deal or BE the smart box.

And getting money isnt about price and price alone.

Why would anyone want to participate in it? Kind of like a Funders cld on steroids?

You cant take the salesperson out of the equation and automate the system . And who is in charge of this box? Why do we trust them with our deals?

Salespeople bring sales and money to the table and their is a reward/cost associated with doing so. Freedom of choice for the one who is the true driver of applications and the ability to control our destiny and not devalue the relationship building side of the sales process.This is why some of us are self employed.

I could discuss this with you further, not on a board because I am making these conclusions based on a split second clue I got from a debate that was posted...you mentioning it now makes me realize what I was thinking was correct.

Again Id be open to discuss what your goal is..not on these boards though.

Each lender that adopts the SMART Box internally generates the SMART Box for each deal. Navigant signs off on the calculations, but there is no outside firm that generates each SMART Box for the lender on a deal by deal basis or sees any customer information. What is the concern? All it is doing is creating uniform disclosure for pricing and terms. The broker can still sell the deal as they normally would, there isn't any infringement on the customer relationship.

[Karen37a]

I said "not on these boards" because I didn't want to get into a whole conversation about this, creating an advertisement pro and con for the smart box.

I will look at this down the road a bit because as I stated I really do not have an solid opinion of it yet

[Sean Cash]

I see that there is a MCA SMART Box as one of three boxes. But as far as I can tell, no companies have actually agreed to adopt these boxes for an MCA except for CAN Capital and you, Carl. Seems it's basically just CAN doing this all by themselves. Why do you think that is?

APRs on loan contracts is a completely different topic altogether.

[Cfairbank]

I see that there is a MCA SMART Box as one of three boxes. But as far as I can tell, no companies have actually agreed to adopt these boxes for an MCA except for CAN Capital and you, Carl. Seems it's basically just CAN doing this all by themselves. Why do you think that is?

APRs on loan contracts is a completely different topic altogether.

To be honest, I would venture to guess it's because most "upmarket" players switched from cash advances to loans over the past few years. As you refer to Sean, even we are primarily a lender, but still do "offer" cash advances for merchants that prefer that structure.

[Sean Cash]

So raw dollar wise, how much are you doing in MCA funding per month on average?

[Cfairbank]

I see that there is a MCA SMART Box as one of three boxes. But as far as I can tell, no companies have actually agreed to adopt these boxes for an MCA except for CAN Capital and you, Carl. Seems it's basically just CAN doing this all by themselves. Why do you think that is?

APRs on loan contracts is a completely different topic altogether.

But to be clear, SMART Box is not about APR. It's about presenting uniform cost and terminology disclosure, one of which is APR. Putting APR aside, you have so many different ways firms present cost today, hopefully this will help fix that, even for those that choose not to adopt it (I personally think anything that is presented as a rate or % that isn't annualized is confusing, even factor rate -- hence the "cents on the dollar").

[Sean Cash]

I am unable to get past APRs on MCA contracts before being able to fully digest the rest

[Sean Cash]

I honestly think it's a major distraction (the APR on MCA thing) especially when no one agrees with it and no one is supporting it. It calls into question the rest

[HDF]

Status quo, as profitable as it is for many in the past and now ain't gonna fly people for very long. So when directed to have some form of "APR Disclosure" we better have a better answer than - there is no comparison.

Smart Box is not perfect nor perfected, but a start. Both in helping the business owner maybe understand true cost of capital but also - gasp- educating many in the brokerage community just a bit.

This industry is going to go the way of B-share Mutual Funds and their brokers who relied on them. Good for the broker. Good for the Broker/Dealer. Bad for the customer much of the time.

[Karen37a]

Doing an apples to apples comparison doesn't take into account the renewal ( dd) the additional cost or taking on the additional risk.

I have merchants tell me they don't mind paying more money with their current company because they can call and get additional funds with out drama

ITS NOT ONLY THE APR

That smart box isnt going to help when someone like me says...this is how it really works, in plain english
.
This isnt Harvard Yard and Elite Investment Banking for Aristocrats who look at Quantitative Analysis and the Qualitative analysis of Ebidta and the Escoteric scoring model Algorithm...

You think they understand all that, or even care...they dont. What type of person is even going to look at all that?

The type of person/cfo that can go to the BANK for a loan.

Some A paper lenders have not turned a profit since inception. There are holes and flaws in every type of advance or loan...cant imagine how much more certain lenders will lose if they caused regulation trying to corner the market.

This is money that investors are giving to someone for a purpose, to make a return on their $$. Getting a Loan or Advance is not a right that we are born to, in fact its the exact opposite.

Regulation? Lend them your money and not get it back. These are non collateralized advances.

[staten]

This makes me laugh as I have funded 1000s of MCAs and designed MPL structures with orignating banks and institutional investors. "Upmarket".........MCAs can and do often do have lower all in rates for the merchant. An attempt to take some type of moral highground is simply hubris.

[CreditGuy]

I see that there is a MCA SMART Box as one of three boxes. But as far as I can tell, no companies have actually agreed to adopt these boxes for an MCA except for CAN Capital and you, Carl. Seems it's basically just CAN doing this all by themselves. Why do you think that is?

APRs on loan contracts is a completely different topic altogether.

ILPA created the SMART Box. CAN is a member, but so are Kabbage and On Deck. Between the three of them, they make up a very large majority of dollars and units funded in this industry. That's a significant network effect and signal to borrower. If a broker presents two deals: one from CAN and another deal from ABC Capital, and the CAN one has the SMART box clearly showing cost of funds and total payback and the other is just a contract and they have to hunt for the terms, which are they going to feel more comfortable with? How long until a borrower says, "Your contract doesn't have a SMART Box so I can easily compare terms." ILPA is hoping that is a day that comes soon.

Breakout Capital is not a member of ILPA and doesn't use SMART Box, FYI.

[Cfairbank]

Breakout Capital is not a member of ILPA and doesn't use SMART Box, FYI.

That is correct. We are not a member of ILPA; we are a member of the CRBF. Breakout, along with a several other companies and small business organizations, have provided endorsements for or stated support of the SMART Box (you can see many of the supporters of the SMART Box listed with quotes on the ILPA website or the OnDeck press release) and plan to adopt it when it is released past ILPA companies.

[Karen37a]

Salesperson Vs Smartbox


Make a bet...ill choose the 5 top brokers from this community and me , tell me how much and when $$

Your argument doesn't hold water because I take deals away from Can and Ondeck( and others ) for various reasons that make it beneficial for the client to do so.

Hows this for smart box. One of your lenders mentioned above had a merchant ..150k advance .Balance went down to 70 , they wanted to renew but couldn't because the numbers didn't work out..no tax return, less revenue AND slow season.

Gave them an offer of 100k to pay back 120, paying off the 70 ....what is your smart box APR going to say on that scenario?? 1.20 or 1.66?

>>1.20 or 1.66???????????????? plus costs and fees ...1.72????????????????????? I hope the Smart box takes that all into account since you are all into transparency

People yapping about regulation will have to make sure its FULL disclosure, not just the way they are trying to slant the offers for personal gain, confusing the merchant yet again.

Again this is why outside brokers come into play, I do not work for anyone, I "try" to put my clients best interest first and foremost and I do not have to kiss bt to my employer , sell their product and let them cut my commission on renewals after the fact because they didn't make their quarterly numbers yet again, and they want their personal bonus or to keep their job.


Thumb Down to the Smart box, it looks like lenders/people trying to gain advantage and corner the market ( or create one) while trying to hide it under moral supremacy

PS. Clients are never going to say "where is the smart box" because you have to trust the opinion of the smart box and it doesn't take into account the human factor of the transaction

You do not have any clue as to why someone chooses one deal over the other, me presenting competing offers for the last 1 1/2 years I have a clue and your so called APR didnt win out most of the time. And I was unbiased.

I had enough of this argument. Its clear to see that people are bringing this topic up all the time, because they are trying to force their opinion or agenda thru.

I am off to work before I make it into the DF hall of Fame, posting alot and never making any $$ .

PS. Algorithms are a moving target, the Financial Health of the client and their Bank statements change day to day, month to month , year to year.

[Karen37a]

Credit Guy,

I am not sure if you do credit but you do know that credit reports can vary 30-50 points depending on what version of software you are using within the same Credit Reporting Agency?

One lender can have one score, another a lower or higher score, even though its the same Credit Bureau on the same day? That could also affect the calculation.

I know one big lender using old software, I do not know if they know they are using it (blindly) or purposely using it to generate the lower score .

Everyone would have to use the same exact version of credit scoring software to get a TRUE apples to apple comparison. I guess the big credit reporting agencies will have to do something to stop the discrepancy in the scores . Lets Regulate them too !!!

. ( I am kidding about the regulation on them, I do not need to pick a fight with Giant companies and every single person/company who lends money in the world,and the credit bureaus .... If I was being harassed id duck behind them)

Kind of like the green wall of silience

[Davincinc]

No broker should make more let alone double, then the lender or investor on the product being sold