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03-30-2017, 05:53 PM #1
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- Feb 2017
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- 3,463
Post MCA Consolidation - Can he get more?
I have a client who wants to work with a "debt consolidation" firm. They renegotiate his terms for him, and pay him, and they pay out to the direct lenders.
He has 8 positions out. Grosses $900k-1mm monthly, nets about 300k due to multiple loans and MCAs and a bank loan. Has $4.1mm out in receivables.
He's feeling the pinch of too much stacking, but he doesn't want to close the door for the future funding through MCAs. No negative days, but it's getting overwhelming.
If he starts working with one of these companies, does he get blacklisted from future lenders? Or should I direct him to a company like Dan Page to just really consolidate himself and get an MCA product?Last edited by abfunders; 03-30-2017 at 07:55 PM.
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03-30-2017, 06:04 PM #2
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03-30-2017, 06:06 PM #3
100% agree with Chambo, go with Dan Page, try to get a full consolidation, if he has to negotiate payments with the funders thats a bad thing, but still better than going with a debt 'consolidation' company.
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03-30-2017, 06:07 PM #4
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- Aug 2014
- Posts
- 620
Post MCA Consolidation - Can he get more?
Your best bet is to have the merchant call whomever he has an advance with and slightly restructure the payment. Lenders are much more willing to work with the merchant directly than a scumbag debt consolidation company. In the end we just want to get paid back even if it takes a little bit longer than originally agreed.
Edit: if Dan Page is able to consolidate the merchant than that is a far better option.
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03-30-2017, 06:11 PM #5
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- Dec 2016
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- 31
Who or What is Dan Page?
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03-30-2017, 06:14 PM #6
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- Mar 2016
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- 335
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03-30-2017, 06:15 PM #7
Dan Page
Funding Strategy Partners
Direct: (303) 938-8280
dan@fundingstrategypartners.com
www.fundingstrategypartners.comNick Hubbard
Senior Loan Advisor
314-252-0299 - Office
314-885-2262 - Direct
nick@elitefactoring.com
www.elitefactoring.com
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03-30-2017, 06:21 PM #8
Debt Consolidation companies get the merchant to stop paying. then after a couple months, they would call up the MCA, and offer a settlement of .05 (yes 5 cents) on the dollar. See, they are paid based on the saving to the merchant,s o the lower they get the settlement for, the more they make.
In the end, the merchant may end up saving 25-35% on this debt. The Consolidation company makes an additional 25-30% of the outstanding debt balance.
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03-30-2017, 06:26 PM #9
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- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,508
How much is owed in cash advances and how big is the bank line? What industry?
Yes I am a lender.
KevinKevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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03-30-2017, 07:07 PM #10
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- Oct 2016
- Posts
- 4,318
First choice: product like Kevin Henry
Second choice: Dan Page
Third choice: ask for reduced payments
Ruin any chance of being funded ever again choice: work with debt restructuring company.
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03-30-2017, 07:16 PM #11
- Join Date
- Apr 2013
- Location
- NY
- Posts
- 203
The part of this that is missing- merchant stops payment, goes in default. The funders refuse to negotiate with these debt consolidation firms offering a joke of a settlement. The funders file lawsuits/COJ and seize receivables and assets, and company goes out of business.
And all could've been avoided if the merchant simply called the funders himself, and said hey I'm struggling with the payments can you please lower them a little. After all, if a merchant bounces payments its not good for the merchant or the funder. If the payments strangle the businesses cash flow and they go out of business, the funder loses too.
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03-30-2017, 07:20 PM #12
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- Mar 2015
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- Boynton Beach
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- 3,508
Post MCA Consolidation - Can he get more?
The part that is missing is the answers.... how much is owed to the bank and cash advances and what industry?
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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03-30-2017, 07:38 PM #13
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- Jun 2015
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- 3,326
Best is to get him financing not from this industry .like west coast said ,Kevin is a great option .if not you want to reach out o someone like Bob Shaw or Richard Gerard (search for them on this site) to help you find the right banks
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03-30-2017, 08:15 PM #14
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- Feb 2017
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Wow, this is a great set of responses.
He's in construction, has 850k out in advances, has about 850k to the bank in an installment loan for the last 4 years he's been paying off.
Turns out via this post (maybe 5 minutes after posting!), I heard that one of the debt consolidation firms started calling on his behalf. I called the client and found out that it was UNAUTHORIZED. He never signed on the dotted line, and one of his old lenders recognized the case, and called me. Lenders talk to each other. Looks like he's done with MCA. Which is probably a good thing for him.
He's got a long road ahead of him, but we're going to start finding creative options for him, and get him onto a normal healthy debt. MCA got him to where he is now, so let's see if we can help him.
If you are his direct lender, please spread the word: HE IS MAKING EVERY EFFORT TO PAY YOU ON TIME WITHOUT ANY CHANGE! He is a good guy, and he is NOT removing money from his account and is NOT going to default (as best as any human with 8 positions can promise). He's not bankrupt, he might slight breathing room. Reach out to him and offer to help. You WILL get paid. Spread the word.
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03-30-2017, 09:07 PM #15
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- Mar 2015
- Location
- Boynton Beach
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- 3,508
Post MCA Consolidation - Can he get more?
Construction...sorry, but we can't do anything.
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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03-30-2017, 10:35 PM #16
WBL will consider working with companies who have restructured their existing debt. Often times we can take their short-term debt and put them into a multiple-year product, thereby saving their business from the inevitable NSF death. We actually have a huge surprise in April that will make these types of deals extremely lucrative for brokers... Give me a call or email tomorrow to discuss.
Zachary Ramirez – CEO
Phone: 562-391-7099
Email: zach@zacharyjosephramirez.com
1661 N. Raymond Ave #265
Anaheim CA 92801
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03-31-2017, 01:55 AM #17
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- Apr 2016
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- 18
Hi all!
Dan Page is an option -- but you can't just "RING" Dan! You better have your ducks in orderLast edited by AAlonzo; 03-31-2017 at 04:11 AM.
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03-31-2017, 06:42 AM #18
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- Mar 2015
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- Boynton Beach
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- 3,508
With 4mil in AR outstanding you might be better served finding a factor that likes construction. Do a one year deal and then flip bank to a bank. Based on what you have described he has 4Mil in AR and owes 1.6. There should be plenty of availably to clean up the debt and provide extra liquidity. We do not factor pure construction companies. There are a few out their that do.
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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03-31-2017, 07:30 AM #19
- Join Date
- Dec 2014
- Location
- Quogue, NY
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- 1,108
Agree with Kevin.. There are several options for the client long as the assets out weigh the liabilities. Challenges with Construction is Payer risk, milestones, and retainage. Depending on the Aging and eligible receivables there is a strong likelihood we can get something done for the client. Additionally: there are firms that restructure debt- not try to cram it down.
Feel free to touch base should you wish for assistance/perspective.
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03-31-2017, 07:54 AM #20
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- Mar 2015
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- Boynton Beach
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- 3,508
Post MCA Consolidation - Can he get more?
Yes Richard! Assume 1mil is ineligible due to milestone, bonding or over 90 and you are left with 3mil. At even a 70% advance rate you are cleaning up the debt and providing liquidity. Keep in mind that factoring is a revolving facility.....weekly you will be financing invoices to access liquidity.
Kevin Henry
VP-Business Development
Seacoast Business Funding, a division of Seacoast Bank
561-850-9346
Kevin.Henry@SeacoastBF.com
1880 N Congress Ave., Suite 404
Boynton Beach, FL 33426
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03-31-2017, 08:51 AM #21
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- Mar 2014
- Location
- Ann Arbor, Michigan
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- 1,289
Post MCA Consolidation - Can he get more?
Factoring construction receivables is difficult for reason previously described in this thread. If you give me your phone number and a good time to call I'll be glad to introduce you to the best firm I've found over the last 40 years. You will get the full commission.
Bob Shaw
734-929-3800
rshaw@advancecredit.com
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03-31-2017, 10:30 AM #22
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- Aug 2015
- Location
- Boulder, CO
- Posts
- 755
Hey folks -
Thanks to everyone that has been throwing my name out there. Yes, we do a lot of consolidations, also in the construction industry (funded a construction company for $550k this week, half of which was paying off 3 MCAs).
This sounds like a tough one, admittedly. We don't just look at the numbers but also the story, as in WHY the client took out 8 advances and what is going to change in the future if we were to consolidate his advances, so that he does not need to do this to himself again. Usually in construction it is due to slow pays. Sometimes there is a path out and sometimes there is not.
We need to see a minimum of $13k of monthly net income for every $100k in funding. So for this client, we need to see at least $100k+ of net monthly income, or about 10% - 12% net margin, which is typically high net margin for construction. The client also has an additional $850k bank loan, so the balance sheet comes into question as we are already up to $1.7MM of debt without knowing more.
All in all, sounds like a challenging deal but happy to take a look or answer any questions if it is helpful.
Quick recap of what we can do:
$100k - $2MM funding amount
12-30 month term
Early pre-pay after six months, with no fees, penalties or interest (we do not front load profits so if a client pays off at six months their cost of capital is half the cost of twelve months, a third the cost of eighteen months)
We fund in all fifty states, most industries
Best,
Dan Page
Direct: (303) 938-8280
dan@fundingstrategypartners.com
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03-31-2017, 11:10 AM #23
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03-31-2017, 11:24 AM #24
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- Aug 2015
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- Boulder, CO
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03-31-2017, 01:50 PM #25
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- Dec 2014
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- Quogue, NY
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