[Cfairbank]

So what you're saying is you'll focus on clients who are most likely not going to stack again, correct? I can't blame you. It's amazing how many merchants come to you with 5 advances, thinking they would be appealing to consolidation companies. "This is a great opportunity for the lender" is something I hear way too often from merchants seeking consolidations. Then I look at their statements and they've been missing a bunch of payments each month. Real appealing.

Ha, that's one way to put it! From a broader standpoint, I view the core problem is that merchants need to buy into a "program", not just a one-time consolidation transaction -- unless you are going to Funding Circle to get an immediate "fix", getting out of the stacked rabbit hole is a multi-stage process. There is so much risk in multiple position consolidations that, to do it properly, you (the lender) need to initially price it higher and with a shorter term to help mitigate the immediate stacking risk, but have a clear plan laid out that allows the merchant to lower rate and extend term as they prove they aren't a stacking risk. We have these programs, so if a merchant is really trying to fix their capital structure, we can do it; but we need to mitigate our up front risk. But, like you reference, many consolidation candidates don't buy into a "program" and just use a consolidation to free up daily cash flow to stack again (frequently, funders will be paid in full and then be back on the books a few days later with a brand new advance). And those quickly turn into losses or workouts because, the way most products in our space are structured, the merchant is already paying interest on interest / fees on fees since you have to buy out the full balance of the companies on there.