[CreditGuy]

If Average deal length was 14 months...that's 70 weeks....on average 1.5% of the portfolio falls off weekly if no renewals - not counting early payoffs

On Deck, their nearest competitor, has an average duration of just over 13 months per their 2016 Q3 10-Q (page 33). Your estimate of 1.5% a week would be 15.38 months. That is 18% longer than On Deck's average term. There is simply no way there is that big of a disparity given CAN's non-retention/vanilla/whatever max term was 18 months. Doing some more math, On Deck's average loan term is about 55% of their vanilla max term of 24 months. (Both advertise 36 month terms but those terms are really more marketing than reality.) If CAN's vanilla max term was 18 months, then 55% of that would be around 10 months or about 2.25% a week. Assuming CAN had a 24 month term on their vanilla product as well, then reason holds it would be about in line with On Deck's average of 13 months, which means they'd have run off of about 1.85% a week. They are probably seeing more severe portfolio contraction than you are estimating. I'd also note that average term accounts for early payoffs, so it's not necessary to make that disclaimer.

[J.Celifarco]

On Deck, their nearest competitor, has an average duration of just over 13 months per their 2016 Q3 10-Q (page 33). Your estimate of 1.5% a week would be 15.38 months. That is 18% longer than On Deck's average term. There is simply no way there is that big of a disparity given CAN's non-retention/vanilla/whatever max term was 18 months. Doing some more math, On Deck's average loan term is about 55% of their vanilla max term of 24 months. (Both advertise 36 month terms but those terms are really more marketing than reality.) If CAN's vanilla max term was 18 months, then 55% of that would be around 10 months or about 2.25% a week. Assuming CAN had a 24 month term on their vanilla product as well, then reason holds it would be about in line with On Deck's average of 13 months, which means they'd have run off of about 1.85% a week. They are probably seeing more severe portfolio contraction than you are estimating. I'd also note that average term accounts for early payoffs, so it's not necessary to make that disclaimer.

the max term was 36 months not 18. I understand that the max you saw was 18 months but they 100% went out 36 months I have spoken to merchants who have the program and have spoken to number of ISO's who have referenced this program

[CreditGuy]

the max term was 36 months not 18. I understand that the max you saw was 18 months but they 100% went out 36 months I have spoken to merchants who have the program and have spoken to number of ISO's who have referenced this program

(Both advertise 36 month terms but those terms are really more marketing than reality.)

In order to advertise a 36 month term on their public site (both CAN and ODC do) and not be in violation of UDAP, they need to offer the terms as part of normal course of business. That is, even if only 0.25% of all applicants (25 out of 10,000/month) would qualify it meets the test. For the purposes of using max term to proxy average term removing such a significant outlier is warranted.

[GSilverman]

Great Post! So lets call it 2.25% weekly runoff-all in; by Feb 1 a least 20% of their Book vanishes; by March 1 30%.

[jcoop]

CAN never offered 36 month terms lol

[CreditGuy]

CAN never offered 36 month terms lol

You better tell CAN.

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[jcoop]

We did over 15 million with them last year, and I can assure you the longest term we ever received was 24 months.

[FUNd]

We did over 15 million with them last year, and I can assure you the longest term we ever received was 24 months.

Should of upgraded your plan.

[GSilverman]

JCOOP - What are you doing with your deals hitting 50% paid at CAN?

[J.Celifarco]

yeah you needed a better rep because they existed, especially with that volume you would have seen it for refi offers on customer retention pricing. Not sure why you didn't have it

[GSilverman]

JCOOP - What are you doing with your deals hitting 50% paid at CAN?

[mcg168]

yeah you needed a better rep because they existed, especially with that volume you would have seen it for refi offers on customer retention pricing. Not sure why you didn't have it

John - you mentioned earlier that you dont/didnt work with CAN and everything you know about their programs is from your brother. If JCoop is funding $15 million/year, I dont think he needs a better rep.

In addition - you mentioned all these people are suing CAN, including Wells Fargo and investors. The article Sean posted said 1 shareholder had filed a law suit against CAN.

As an industry, we should all hope they come back and they will...without CAN, it allows the other funding companies to be more picky with their approvals. Hence why your seeing the all underwriting changes with OnDk, IOU, ect.

[LYC]

CAN did indeed offer 36 month terms. I funded one! I believe it was only for deals scored A+ 1 Medical on their scoring model, but they did indeed offer 36 months.

[WestCoastFunding]

Speaking of 36 month terms at CAN, I had a merchant come to me wanting a 2nd position behind CAN. When I looked at his statements I noticed he had been on reduced payments with CAN for months. His payment would revert to the original payment after a while, and then he would get another payment reduction a few days later. Long story short, when I did the math, at the current rate CAN was turning an 18 month term into a 36 month term through payment reduction. If this was wide spread (and I have no idea if it was, but this was a merchant that was failing, who was being rewarded with a de facto "prime" product) then I can understand why CAN is in this mess.

[HDF]

Called kicking the CAN down the road...