[J.Celifarco]

FUNd is alive!!

I may have to agree with Sean here and say that the return of Fund is the best part of this thread so far.. and MCG yes they have done 36 month deals

[mcg168]

add in payoffs and maybe 15% of their book is gone. Every week of non-renewal activity 1.5%-2% of their book evaporates.

Time is Ticking

I hear you...they are def losing deals off their book, what percent is anyones guess. The most important thing to CAN was getting back in good standing on their credit lines and didnt Sean put an article out saying they had a $200mm payment due?? So competitors paying off their deals early at a rapid pace must have helped their current cash situatin.

[WestCoastFunding]

CAN has never done 36 month deals. They just started going out to 18 months in the last 2-3 years. The 24 month deals were few and far between, and they essentially stopped those turns last spring.

If you looked at their entire portfolio, the average deal length is going to be under 14 months.

How long are the terms once reduced payments are worked in? I've seen merchant bank statements showing they spent months on reduced payments with CAN.

[GSilverman]

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

[mcg168]

I may have to agree with Sean here and say that the return of Fund is the best part of this thread so far.. and MCG yes they have done 36 month deals

Not calling you a liar, at all, but I've never seen these 36 month offers....Out of curiosity, what were the buyrates/factors?

[J.Celifarco]

Not calling you a liar, at all, but I've never seen these 36 month offers....Out of curiosity, what were the buyrates/factors?

Dont know exactly or remember and being they arent funding and even if they do come back (which I doubt) they wont be doing 36 month deals anymore it really doesn't matter..
Either way the short version of the story is CAN is in deep trouble and needs a miracle to find their way out of this..

Reputation ruined because of fraudulent reporting on deal performance- makes coming back from this twice as difficult because nobody will want to give them money

Any value their years of data had is ruined for the same reason

and they are being sued by Wells as well as any other investors they had probably so they may be bankrupt from law suits before they ever have a chance to rebuild

These are mostly assumptions on my part but based on the information we have from the articles that have been written I think I am pretty close to what s going on and what will happen

[GSilverman]

Agree 100%

[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

[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%.

[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.

[J.Celifarco]

it wasnt that insignificant retention pricing for their good customers a good portion of those were moved to 36 months.. Ondeck select 36 month offers are definitely a bigger % then what you are saying.. i think they did more of those longer deals then you are assuming..

[jcoop]

CAN never offered 36 month terms lol

[FUNd]

FUNd is alive!!

I may have to agree with Sean here and say that the return of Fund is the best part of this thread so far.. and MCG yes they have done 36 month deals

Yep, still here. Was out for a minute, and missed the CAN debacle. Kind of a big hit to the space. Hope you all are well.

[J.Celifarco]

Yep, still here. Was out for a minute, and missed the CAN debacle. Kind of a big hit to the space. Hope you all are well.

Fund, am I crazy or did CAN definitely offer 36 month deals

[CreditGuy]

CAN never offered 36 month terms lol

You better tell CAN.

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[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.

[FUNd]

Fund, am I crazy or did CAN definitely offer 36 month deals

Yes CAN definitely did and piggybacking on another comment, it was an A+1 Medical deal and had to go through large funding approval. It was a nail-biter. (only time I ever saw 36 months come across my desk from CAN)

[Funder Mark]

Yes CAN definitely did and piggybacking on another comment, it was an A+1 Medical deal and had to go through large funding approval. It was a nail-biter. (only time I ever saw 36 months come across my desk from CAN)

I am away from Daily Funder for several hours, and I come back to see FUNd is back!!!

[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.