[John Galt]

Wow, lately I keep seeing an increase in defaults regardless of lenders saying all is rosy. Is anyone else seeing that uptick? I find myself doing more workouts than usual.

[Kevin Henry-Seacoast]

Wow, lately I keep seeing an increase in defaults regardless of lenders saying all is rosy. Is anyone else seeing that uptick? I find myself doing more workouts than usual.

John,

I must have read 10 forbearance agreements this week. Companies ranging from$3mil in revenue to $75Mil in revenue. The ugly is coming. In lower middle markets I am seeing a bunch of companies that have multiple advances on top of a bank LOC or factor with no way out.

[nrh1lp]

Do you mean defaults on your deals?

[NoBigDeal]

Wow, lately I keep seeing an increase in defaults regardless of lenders saying all is rosy. Is anyone else seeing that uptick? I find myself doing more workouts than usual.

Defaults are definitely climbing, especially in the sub-prime space and Funders are getting eaten up. Unless you have a strong collections dept to help recoup your net loss, as well as have a strong renewal pipeline, it doesn't matter how much new funding you're doing on a monthly basis, the defaults will catch up to you

[Chambo]

wonder how much of this has to do with stacking and choking the merchants into default?

[John Galt]

Think equal....one client was stacked to the brim with small MCAs, other 2 only had 1 MCA or loan.

[J.Celifarco]

wonder how much of this has to do with stacking and choking the merchants into default?

I would think it has a lot to do with the stacking

[WestCoastFunding]

Increase in both defaults and merchants attempting to commit fraud.

[mcaguru]

I am not sure there is an uptick ... I do know that these few months merchants struggle the most. I believe funding and collecting merchants needs to be with same care as walking a tightrope .. No amounts capital or deal flow or degrees will help in this aspect. I get to many calls from new funders wanting to know how they can get out of a 3m loss...All i can say is when at the circus they always remind people DO NOT try this at home !!

[funded]

Yes these are the worst months for collections

[TStein]

Not implying any correlation to this, but I've been receiving a lot of calls from these bailout/restructure companies. I entertained one the other day who said this wasn't considered a default but a "structured settlement"

Morons.

[John Galt]

If the alternative is a chap 7 or 11 or as an individual 13.....think you should allow the structured settlement other than have it forced upon you. No other choice. We charge a lot, we have high defaults. Workouts happen daily whether you are willing or not. I for one would rather make a deal to at least get principal back over time then to get 0.

[John Galt]

Or getting smart enough to walk away scott free from alt financing.

[John Galt]

Not for me, I'm 35% above last years stats and I am not a funder though I do syndicate.

[John Galt]

It's not just me look at the rental car stocks this week. 1 mil consumers 2 mos behind on car payments, everyone not just subprime. A lot of failing debt not being publicized. Just a lot of spikes.

[Collection Specialist]

Defaults are certainly up,but as long as you have the right person in place it's still manageable. I think it's certainly the stacking that's causing this. That and the major growth of these "settlement companies" who sell absolute pipe dreams.

If anyone needs assistance and would like to know my approach which I will add works magically, I am happy to do so.

[dpFund]

We are seeing an uptick in defaults/workouts. Which is why we are continually evolving our underwriting/funding/collection model.

The irony is that at the same time our funding for Q1 2017 is up significantly over Q1 2016.

- Dan Page
Direct: (303) 938-8280
dan@fundingstrategypartners.com

[Michael I]

I have been seeing a uptake of declines and lower default rate . Seems like underwriters are evolving the right way . (i miss the no bank log in days) .
now i do not consider it a default if merchant misses a couple of payments here or there.

[NoBigDeal]

We are seeing an uptick in defaults/workouts. Which is why we are continually evolving our underwriting/funding/collection model.

The irony is that at the same time our funding for Q1 2017 is up significantly over Q1 2016.

- Dan Page
Direct: (303) 938-8280
dan@fundingstrategypartners.com

Dan,
I'm curious, as I've seen you mention that you track your merchants in order to make sure they don't stack again, are you saying that merchant's still go around your back and there is no "full-proof" system to ensure the merchant doesn't stack again? Or are they defaulting by simply stopping payments or other methods?

[dpFund]

Dan,
I'm curious, as I've seen you mention that you track your merchants in order to make sure they don't stack again, are you saying that merchant's still go around your back and there is no "full-proof" system to ensure the merchant doesn't stack again? Or are they defaulting by simply stopping payments or other methods?

We have seen some previous merchants stack on us, even with the preventions we put in place. But we have evolved our funding and client management model to address the issue.

[Lmonus]

Dont think this has anything to do with stacking - i think it has ALOT to do with those Debt Restructure programs who are hunting good paying merchants by buying Ucc's.

Bull.