[It's A Wonderful ISO]

Happy Friday folks, wanted to post a quick thread and light a fire on a subject that's been baffling to me in recent months..

MCA CONSOLIDATIONS

It appears to me that several lenders and institutions CLAIM they can do them but in reality seems it's all a smoke screen to data mine and get bigger deal flow...

I'm wondering if those of you that have ACTUALLY completed these would be kind enough to shed some light on an otherwise dark subject...if they were successful.. did it help the business.. Any details of who's actually done them, what type of business's received them, basic specs of the deals, etc.. I think this will help in many fashions, not just for the lenders that may be able to do them, but for the broker market, ISO market and the business's that are getting STACKED over and over and over until they bleed to death

I can't wait to see all the guys chyme in that say they can do them with little to no reputation.. Looking forward to some insight from the DF community

[NoBigDeal]

Happy Friday folks, wanted to post a quick thread and light a fire on a subject that's been baffling to me in recent months..

MCA CONSOLIDATIONS

It appears to me that several lenders and institutions CLAIM they can do them but in reality seems it's all a smoke screen to data mine and get bigger deal flow...

I'm wondering if those of you that have ACTUALLY completed these would be kind enough to shed some light on an otherwise dark subject...if they were successful.. did it help the business.. Any details of who's actually done them, what type of business's received them, basic specs of the deals, etc.. I think this will help in many fashions, not just for the lenders that may be able to do them, but for the broker market, ISO market and the business's that are getting STACKED over and over and over until they bleed to death

I can't wait to see all the guys chyme in that say they can do them with little to no reputation.. Looking forward to some insight from the DF community

PowerUp used to do it, but last I heard, they've stopped. It's for the same reason why it never made sense for funders to consolidate more than 1 advance. If a merchant has multiple advances, those stackers would just get right back into the deal after they're paid off
You could make an argument about a consolidation for a single advance. Beyond that, can't wrap my head around it

[WestCoastFunding]

I know someone will eventually bring up Dan Page's program, and I highly-recommend it. Essentially he can consolidate and get them monthly payments on 12-36 month terms.

Outside of him, its hard to get a funder to buyout more than one position recently. I've been seeing a merchant with two positions get offers by funders to buyout the 2nd and net cash while leaving the 1st position in place. But getting more than one paid off lately has been tough.

[Chambo]

I know someone will eventually bring up Dan Page's program, and I highly-recommend it. Essentially he can consolidate and get them monthly payments on 12-36 month terms.

Outside of him, its hard to get a funder to buyout more than one position recently. I've been seeing a merchant with two positions get offers by funders to buyout the 2nd and net cash while leaving the 1st position in place. But getting more than one paid off lately has been tough.

The problem and risk is....serial stackers have already proven how they operate. If 6-8 months go by and they need cash, they will go out and get it. They know some lil fund out there will give it to them. Who cares about what agreements they may or may not have signed?

[HDF]

The problem and risk is....serial stackers have already proven how they operate. If 6-8 months go by and they need cash, they will go out and get it. They know some lil fund out there will give it to them. Who cares about what agreements they may or may not have signed?

Ah, where the "Closers" feast.

[John Galt]

Power up concentrates now on doing renewals without paying the ISO. Charlie Mayo is a thief.

[Kevin Henry-Seacoast]

We have closed a few and I am about to propose on a deal next week.
Situation: $5mil revenue Company with an advance from 3 different providers and a small LOC from a bank. The Company has 750Mil in AR outstanding.
Solution: We are proposing a factoring deal whereby we will advance 92% on their AR in a revolving $1mil facility. First funding pays off all the existing debt and gives the Company some decent liquidity. Since the facility is revolving we will be financing invoices on a weekly basis. We were not as cheap as the bank line, but they were not willing to increase because of customer concentrations and the stacks. We are certainly cheaper than the advances. All in we are around 13%. The bank was at 4+L. The advances ranged from 18% to 36%. The extra liquidity and financing savings are going to help them tremendously.

Kevin

[It's A Wonderful ISO]

We have closed a few and I am about to propose on a deal next week.
Situation: $5mil revenue Company with an advance from 3 different providers and a small LOC from a bank. The Company has 750Mil in AR outstanding.
Solution: We are proposing a factoring deal whereby we will advance 92% on their AR in a revolving $1mil facility. First funding pays off all the existing debt and gives the Company some decent liquidity. Since the facility is revolving we will be financing invoices on a weekly basis. We were not as cheap as the bank line, but they were not willing to increase because of customer concentrations and the stacks. We are certainly cheaper than the advances. All in we are around 13%. The bank was at 4+L. The advances ranged from 18% to 36%. The extra liquidity and financing savings are going to help them tremendously.

Kevin

Really appreciate the well thought out and candid feedback from everyone, I think anyone who views this thread will get a better understanding just by reading the replies, excellent stuff guys thank you.. Kevin that sounds like a great deal and clearly makes sense on all four corners.. will certainly PM you to discuss a few things in greater detail

[RichardGerard]

What Kevin is proposing is the most cost effective way to get things done- no question. Where there are assets there are possible solutions.

As for Dan's firm: definitely has a purpose in the marketplace- no doubt. But his Net Income requirement can be challenging especially due to the cost of the debt associated with the advances.

Piecing things together is where our niche is. If the client falls outside the comfort level of Sea Coast- there are ways to leverage the assets to make lenders feel comfortable enough to see if the client will be profitable with the new credit facility.

Structuring the transaction in a way that gives the client an incentive to not stack behind Senior Debt, and/or bringing in an over advance lender with an inter-creditor agreement will get things done as well.

All being said- you can't go wrong by asking Kevin if it makes sense for his group to wrap around a deal. If the client hasn't shown a net income (precluding Dan), and doesn't want to pay the vig the folks at WBL will charge, give us a shout..

Richard 516 510 3855

Business Capital Consultants
775 Park Avenue Suite 255
Huntington, NY 11743

rg@businesscapitalconsultants.com

[jotucker1983]

Happy Friday folks, wanted to post a quick thread and light a fire on a subject that's been baffling to me in recent months..

MCA CONSOLIDATIONS

It appears to me that several lenders and institutions CLAIM they can do them but in reality seems it's all a smoke screen to data mine and get bigger deal flow...

I'm wondering if those of you that have ACTUALLY completed these would be kind enough to shed some light on an otherwise dark subject...if they were successful.. did it help the business.. Any details of who's actually done them, what type of business's received them, basic specs of the deals, etc.. I think this will help in many fashions, not just for the lenders that may be able to do them, but for the broker market, ISO market and the business's that are getting STACKED over and over and over until they bleed to death

I can't wait to see all the guys chyme in that say they can do them with little to no reputation.. Looking forward to some insight from the DF community

My experience has been very similar to yours, where most of the consolidation deals go no where.

- When I refer to consolidation deals I'm talking a true/real consolidation, where the merchant has sales of $1 million with 3 balances outstanding that total about $80,000.

- The merchant's full approval based on his profile can be about $80,000 and that entire amount will go towards paying off the 3 outstanding balances with the merchant netting nothing, but in exchange getting a longer term/lower payment schedule to help his cashflow.

- These deals are very difficult to get done for a variety of reasons, as most of the true/real consolidation programs require the deal to be very clean, and most of the merchants in these situations will just not be very clean (it's why they stacked like that in the first place).

[Kevin Henry-Seacoast]

Hence the reason why you need to replace the term advances with a true revolving facility. When you close a factoring deal the process starts again within a week when the company submits more invoices for financing. Advances and Term notes are static and not revolving. They help with cash flow only if the business is a good shepherd of capital when the lump sum hits the account.

[jotucker1983]

Hence the reason why you need to replace the term advances with a true revolving facility. When you close a factoring deal the process starts again within a week when the company submits more invoices for financing. Advances and Term notes are static and not revolving. They help with cash flow only if the business is a good shepherd of capital when the lump sum hits the account.

This is true, but the merchant would also need solid outstanding commercial receivables of some sort of high quantity. Most of the merchants I get who need a true/real consolidation, don't have these assets.

[Fund_It]

This is an email i received from Everlasting Capital about consolidations.

2017 could potentially be a good year for merchants who are looking to lower their daily debits. In 2016 we saw some companies try this niche product and fail miserably...while others are still trying. Its a different beast all together but 100% needed as we are seeing merchants who have stacked up to 7 times over the last couple years.
Yes you are reading this correctly THEY HAVE STACKED 7 TIMES!

So whats the kicker?

Some merchants who stack 7 times can actually afford those payments and believe it or not the business still runs healthy. Unfortunately its the other merchants who have great cash flow but then stack who are trying to stay afloat.

We have brainstormed on this topic and a solution is needed for 2017! We have it. There are a 3 main questions that come up regarding this subject and the solution is evident:

1. Is this just throwing good money after bad?
Great Question! This simple answer to this is absolutely not! The program mitigates risk for all parties involved;
The consolidator, The Funder(s), and The Client!

The consolidator puts money out strategically.
The funder(s) have a better chance of getting their ROI back.
The client can potentially free up 30% of monthly cash flow!

2. What is going to stop them from stacking again?
This is the unique strategically planned program for the merchant. Nothing changes for the merchant besides saving up to 30% of the daily debits. A 3-5 month plan is put into place to make sure cash flow is put back into the business and funder(s) are paid back according to the merchants agreement. This is not a debt consolidation effort and the merchants are not "Stopping" payments like other programs we have seen, which in turn makes the client ineligible to receive funding in the future.

3. What qualifies a merchant who stacked for this program?
The merchant needs to fill out a debt schedule showing all advance balances and daily payments. In most cases merchants have three or more advances out at the time of the consolidation though it has worked with two. The numbers are ran to see what type of savings could be put back into the business and if the savings are 30% plus we can maker an offer.

Like it or not this is much needed for this industry. Its time to circle back and Make Lending Great Again.

For more information on this product please call 888-777-8144

[bdshaw]

Kevin and Richard are correct. Our hybrid program has been used to buy out as many as 3 positions. In factoring you get what you pay for. Kevin is an excellent choice if the major consideration is price, Kevin will look at a file and present a number of options and company's like us will provide flexibility in factoring and PO funding.
Bob Shaw
Iron Horse Credit
rshaw@ironhorsecredit.com
734-929-3800

[RichardGerard]

Is it a mystery that several reputable firms have tried to tackle consolidations by writing an MCA type product, and had to re-think their strategy?

If a company is stacked, they have already defaulted on their MCA lender, and in many instances, Senior debt.

There is no quick fix here. Collateral is the only way to bundle the debt, and a cogent exit strategy is the only way to get the clients to NOT stack again

[RichardGerard]

Fund_it,

Please be kind enough to send us a link to your website (there are rules regarding soliciting files) and also allow us to understand your Underwriting Criteria.

RG

[AdvanceFund]

Happy Friday folks, wanted to post a quick thread and light a fire on a subject that's been baffling to me in recent months..

MCA CONSOLIDATIONS

It appears to me that several lenders and institutions CLAIM they can do them but in reality seems it's all a smoke screen to data mine and get bigger deal flow...

I'm wondering if those of you that have ACTUALLY completed these would be kind enough to shed some light on an otherwise dark subject...if they were successful.. did it help the business.. Any details of who's actually done them, what type of business's received them, basic specs of the deals, etc.. I think this will help in many fashions, not just for the lenders that may be able to do them, but for the broker market, ISO market and the business's that are getting STACKED over and over and over until they bleed to death

I can't wait to see all the guys chyme in that say they can do them with little to no reputation.. Looking forward to some insight from the DF community

We offer an incremental consolidation that generally saves the merchant 20-25% weekly. It's not a buy-out. It's done on top. We don't market it much because we are looking for quality not quantity. Main criteria would be strong daily balances.

[dpFund]

I know someone will eventually bring up Dan Page's program, and I highly-recommend it. Essentially he can consolidate and get them monthly payments on 12-36 month terms.

Outside of him, its hard to get a funder to buyout more than one position recently. I've been seeing a merchant with two positions get offers by funders to buyout the 2nd and net cash while leaving the 1st position in place. But getting more than one paid off lately has been tough.

Thank you for the mention. Yes, we definitely fund consolidations. I will be funding $1.4MM this week, with another $3MM at funding stage coming right behind it.

And yes, it is challenging. Client will promise up and down that they just want to be out from under the daily payments and then they go ahead and stack on you 30 days later. We are constantly evolving our funding model to address this issue.

And to Richard's point...yes, we definitely have Net Income requirements (for every $100k of funding desired, we need to see at least $13k of monthly net income). Any funder worth their salt should have net income (and balance sheet) requirements. Not doing so is a prescription for default. Just think of it...the reason these clients got into trouble with MCAs in the first place is that neither they nor their lenders were paying attention to how much actual income is available to meet their monthly debt obligations.

I can definitely help clients (ones with strong financials) who got in over their head with MCAs and now want out. But I cannot help clients who simply took on too much debt and no amount of consolidation is going to make a difference. About the only path out of that mess is leveraging real estate with a long term payment option. I can do those as well. In fact, they are a lot cheaper (8% - 12% annual rates), but the real estate needs to be there.

But as I stated above, we have north of $4MM at funding stage now, so clearly a lot of clients do qualify for our traditional consolidation model.

It is a monthly payment, 12-30 month terms, and early payoff available any time after six months, with no fees, penalties or interest.

Feel free to reach out and discuss!

Best,

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

[RichardGerard]

Dan,

Are you brokering the Real Estate transactions or is Chris bundling things together in the consolidation model?

Thank you for the clarity on the Net Income requirement. Is that pre or post shareholders income?

[dpFund]

Dan,

Are you brokering the Real Estate transactions or is Chris bundling things together in the consolidation model?

Thank you for the clarity on the Net Income requirement. Is that pre or post shareholders income?

Thanks for the response Richard. If I do real estate deals, it is something I do through a close colleague, and outside FSP. I have several in process right now, both commercial and residential. Just cannot be owner-occupied residential or raw land, but everything else is fair game. Have one where we are refinancing 80 properties, pulling out several million, so we can do the complicated ones.

The $13k monthly net per $100k of funding is net income, after all expenses, including owner draws (we are looking at true net income). We just need to be sure the appropriate level of income is there to meeting their monthly debt obligations.

[evercap]

Email Iso@everlastingcapital.com or call 888 777 8144

[evercap]

Recent Consolidation Funding Example:

Online Pharmacy
Original Daily Payment (3 Advance’s): $2700
Consolidation Payment: $1100
Savings: $1,600/day $33,600/mo

Strategically planned out over 5 months to put the merchant in a better position.

Parameters:
580+ Fico
<5 nsfs in last 3 months
Strong Daily balance
True No net
case by case
Need a story behind the consolidation

[Anthony@torro]

A few questions.

What was the merchants monthly revenue?

What was the total amount owed on all 3 advances collectively?

What was the funding amount?

[evercap]

550k+ a month rev

40k+ daily balance

Owed 350k total(had 4 out) didnt make sense or save $ so 1 was left untouched.

Consolidated 121k between 3 advances

[Anthony@torro]

Advance amount 250k'ish?