[Chambo]

the error in the example is that the companies that do add on don't give the same or higher offer ont he add on. They essentially give the merchant what they have paid back (thus the deal works like a true credit line).

Now if in reviewing updated statements, the sales have gone up, well, the credit line would go up. Likewise if sales drop.

Once a merchant has a strong repayment history, then you can extend the deal (from 6 to 8 months, 8 to 10 or 12, etc), which would also offer more money.

[c4bfunding]

Chambo,

There is no Error on the add on example.

we test this add On system with 170 merchant in an 13 month period, from the 170 merchant we have 0.5 % default rate.

and only 5 merchant where stack by other lenders

[JayBallentine]

Chambo,

There is no Error on the add on example.

we test this add On system with 170 merchant in an 13 month period, from the 170 merchant we have 0.5 % default rate.

and only 5 merchant where stack by other lenders

Thanks for these great insights!!! However, did you mean 5%?

[Joseph Esparza]

I too have been entertaining this concept for some time now, it' inevitable. Not to mention one-voice always rings clearer than many shouting at the same time. The arguments that I have come up against is that 1 - there are not enough Brokers to start up (not true). 2 - What would be the value (which can easily be justified) 3 - Broker are paranoid and would think that the data would be used mostly for solicitation from guys like me in Biz-Dev. Any thoughts on that. Good Morning.

[c4bfunding]

Chambo,

There is no Error on the add on example.

we test this add On system with 170 merchant in an 13 month period, from the 170 merchant we have 0.5 % default rate.

and only 5 merchant where stack by other lenders



Thanks for these great insights!!! However, did you mean 5%?

0.5 on deals that we did add ons

[Scott Williams]

I see the benefits to brokers as:
1. Educational Material Provided
2. Professional Certification
3. Funder Rating System (ie blacklist/review of funders actions towards brokers)
4. Networking among peers
5. Power in Numbers
6. Industry Information
7. Member Discounts
8. Legislative Updates and Help (if needed down the road)
9. Credibility and Notoriety

[FUSIONCAPITAL]

Good morning MCA World!!! Stacking is a shame to this industry. It will inevitably be the downfall of a lot of merchant businesses as well as the downfall of some smaller boutique funding shops like our own. If the deal makes sense, we definitely like paying off outstanding balances and taking over positions. The issue falls in that the deals we see are a mess. 4 and 5 positions. We buy out 3 or 4 of them but still end up as a 2nd position. Again, this is only from deals we see from brokers. The deals we bring in ourselves are usually clean but obviously it costs us marketing and advertising. The industry is so small, the deals are being recycled...Truly a shame.

[Finance1]

There are 2 types of stacking.

One where a merchant has a longer term advance/loan and doesn't qualify for a renewal but needs a quick shot of cash for a specific purpose. And they can afford it.

The second is the banged up cash flow biz who really can't afford it takes a stack. Has a hard time after a month or 2 and takes another stack to keep the boat floating. Then has the same problem again and gets a 3rd. If they still manage to keep enough positive balances they may even take a 4th. Then it all goes to hell.

Which one is more prevalent? There's a clear winner from what I see day in day out.

[Joseph Esparza]

Scott, I'm going back to your point. If there is Order then there is Accountability. Stacking would be a thing of the past or it would have a logical position that would be communicated to the first party, OK'd and then issued - else, declined.

[Sean Cash]

speaking of lendio and their model: http://m.prnewswire.com/news-releases/lendio-announces-strong-market-adoption-for-new-business-loan-production-tool-256177041.html

[JayBallentine]

speaking of lendio and their model: http://m.prnewswire.com/news-release...256177041.html

They've iterated towards their end game while de-risking the venture on the way to said end game. Well played.