[isaacdstern]

https://www.crowdfundinsider.com/201...ts-operations/

[isaacdstern]

I guess you eventually have to be profitable to stay in business!

[soscap]

This month has been wild. Knight, DealStruck, and CAN issues...

[MCNetwork]

I'm sure that's just the tip of the iceberg...

[Funder Mark]

Is there any reliable word on Knight or CAN?

[anonymous]

https://www.youtube.com/watch?v=rY0WxgSXdEE

[Sean Cash]

On the consumer side, Peerform just got acquired and Prosper's CEO just resigned. Happy Thanksgiving.

[Karen37a]

Some one else just fired half their staff..i will find out 100% before posting.My guess is they are being bought out. Thank God i stopped sending deals when I thought they were going to exist stage right.

This is why money cant be given at low low rates it isnt sustainable on a long term basis unless you double dip or cut your isos out

[aredmond]

Some one else just fired half their staff..i will find out 100% before posting.My guess is they are being bought out. Thank God i stopped sending deals when I thought they were going to exist stage right.

This is why money cant be given at low low rates it isnt sustainable on a long term basis unless you double dip or cut your isos out

My guess would be GRP

[funding pro]

Interesting times...

[Karen37a]

No comment Credibly lol

Oh yeah. Another Option is to deny 95% of the paper or backdoor it


People going under...is that self imposed regulation?

What doesn't come out in the wash , comes out in the rinse.

[matt.estes]

DealStruck shut down the business and sold their portfolio to a bank. Insider said that fast rising acquisition cost was their biggest challenge. Their LTV couldn't keep up with ballooning CAC.

[Karen37a]

I heard ( not sure if its true ) that Deal struck is still going to manage their existing client base short term and the main reason they did not stay open is that they struggled to get investors.

More negative attention to this industry and bad economic times scare MORE investors away. And this is why I said If there is regulation in it it could/would shrink the pool of people who could be isos or brokers but it also it would shrink the investment and hedge fund money or potential pool of people willing to take a chance on risky ventures

Also additional risk disclosed on the Reg D filing automatically knocks out certain pools of investors and there is a lock in phase ( which they have relaxed) and then there is the lock in periods..

Hedge Funds are seen as survival of the fittest

[matt.estes]

Karen37a - You're right on "struggled to get investors". Acquisition cost went up, net collected fees came down due to price competition ("LTV"), they had almost no repeat business. This long "payback period" led to cash flow problems. So they couldn't keep the lights on.

Ironically, more regulation might increase equity investments. It would filter out the riff-raff and accelerate consolidation in the space. Private market equity investors love growth that is driven by consolidation and barriers to entry.

Equity investors should be VERY concerned about valuations when investing in transactional SMB lending (term loans / MCA). Most of these businesses have had extremely inflated valuations for the last 2-4 years. It wasn't until OnDeck and LendingClub took a hit in the public markets that things started to normalize in the private markets.

Whether debt providers should be concerned is a much more complicated, longer conversation. Short answer - for longer term products, yes. For shorter term products, less so. SMB alternative lending hasn't been tested in a a downturn yet, and portfolio "stress tests" are generally bull****. At lest with shorter term products, you can adjust balance sheet risk faster.

In summary - I'm glad businesses like Dealstruck are churning out.

[Karen37a]

if its even possible. I am at a loss for words except Matt I agree with you on most.

People do not buy in times of fear or increased regulation and if they do they want more premium.

We shall see

[Zach]

The first of many to come.

[anydealfunded]

That's what happens when you take a major credit line and have a proverbial gun to your head to lend money. You are forced to fund bad deals and your defaults catch up QUICK! The guys who stayed lean and funded shorter term deals will be in business forever! This 15-24 month mishegas will be gone before you know it!

[Karen37a]

In great straits, when hope is small,
the boldest counsels are the safest

Books of Business are not in jeopardy with certain companies...i think

[biggr]

Could have swore I saw someone on DF selling his MCA business and looking for buyers yesterday!

[WestCoastFunding]

I seriously can't tell who is who. One time had a deal ready to fund with a top "A paper funder". Small deal around $25,000. Right before funding they told me, "we are going to wait until tomorrow to fund, because we are hearing that the merchant is about to fund with another company." The next day I get an email stating they had now declined the deal because they believe the merchant funded - they just didn't know with whom. I thought it was odd that they rejected without doing a bank login to verify, but whatever. I asked the merchant if he had funded, and he swore he didn't (taken with a grain of salt).

I reached out to a good B funder that I have a good relationship with, and asked if he could find out if the merchant had funded. Funny thing was, he immediately recognized the file because he PERSONALLY funded it the day before. I asked him how they got the file, and was told it was submitted a few days before by....... the A paper funder that I had signed contracts and was ready to fund with. They literally sent the deal over to a B funder while working the contracts with me. Then after the merchant funded with the B funder declined the deal because "they heard the client was funding elsewhere".

When I confronted the A paper funder about it, they said it had originally been submitted to their inside sales team. They said the merchant had been approved in-house, but not for the full amount they were seeking, therefore they referred it to the B Funder for additional funds. But that's nonsense because the B funder would never fund within 30 days of a previous position. Cool business ethics, huh? I won't name any names, but I can guarantee that most brokers have done deals with this lender.

So, yeah... every man and woman for themselves.

[MCNetwork]

The problem is that it's almost impossible to know if you were backdoored or not. Every ISO is calling the same UCCs so that merchant could easily have been on someone's radar already. Plus the merchant himself lied to you. In an industry where funders, ISOs and even merchants can't be trusted you're pretty much screwed.

[Sean Cash]

The first of many to come.

Oh yeah, I forgot that WBL had predicted that all of its competition would be out of business by the end of this year :-)

[WestCoastFunding]

I trust merchants the least. Had a file the other day where the bank statement's "average" daily balance was LOWER than the "minimum" balance. They didn't even bother to get the math right. LMAO.

[Zach]

Hehe Sean, I don't think we said it that extremely, but we definitely anticipate more to come.

[soscap]

DealStruck shut down the business and sold their portfolio to a bank. Insider said that fast rising acquisition cost was their biggest challenge. Their LTV couldn't keep up with ballooning CAC.

Think stacking played a major element in this 1