[John Galt]

Doing factoring for years for staffing ops and never figured that out...thanks.

[anydealfunded]

1.18 multiplier....because of the rapid repayment and pre payment penalty he is correct. You can't pitch this product as an APR....it just doesn't work. That's sucks man.

[SimplyMark]

The calculator he sent you doesn't have a payment frequency option that fits daily ach's.

I assume he selected Daily (365/year) for the payment frequency. Unless Rapid is doing a triple pull on Mondays to make up for weekends / holidays and effectively totals 365 actual daily ach payments per year, this calculator isn't suitable for this type of "loan".

Regardless of what the APR "equivalent" comes out to, he is using the wrong calculator and should be using the right tools if he wants to debate this with you. Again, my assumption is that Rapid uses a 21/22 ach count per month.

Am I wrong here?

[Sean Cash]

i did tell him it wasn't a loan it was buying his receivables but he said the 1st page of contact say " business loan agreement '" ?

I mean this nicely, but how is that you don't even know what product you sold? Was it a loan or a purchase? You should step back from everything you are doing and relearn everything from the beginning. If it says business loan, it was a loan, not a purchase.

Nobody should be selling anything until they fully understand their own products.

[Sean Cash]

Your merchant should never be confused about the contract they entered into, but more importantly, you should never be confused.

Homework Assignment For Everyone On Here:

• Read the entire contract of every company you broker transactions for. It doesn't matter if it's 4 pages or 50 pages.
• Ask the lender or funding company questions about them.
• Clarify with them if it is a loan or a purchase if for some reason it's not clear. It should be ABSOLUTELY CLEAR THOUGH!
• If it's a purchase, familiarize yourself with the reconciliation/true-up clause and the terms and conditions therein. If your merchant's sales drop and they are requesting lower daily payments, the funding company is supposed to honor it in accordance with these terms. If you don't know what a reconciliation is, you need to stop what you're doing and seek basic training immediately before you get back on the phone with merchants.

[WestCoastFunding]

familiarize yourself with the reconciliation/true-up clause and the terms and conditions therein. If your merchant's sales drop and they are requesting lower daily payments, the funding company is supposed to honor it in accordance with these terms. If you don't know what a reconciliation is, you need to stop what you're doing and seek basic training immediately before you get back on the phone with merchants.[/LIST]

I honestly don't think many brokers understand the reconciliation clause, which is a shame because it can a) help prevent default b) possibly avoid another advance.

With that having been said, not many funders are bending over backwards to explain it to brokers. When I first saw it I asked a funder about it, and was told, "it means nothing. It's in every contract."

I've tried explaining reconciliation to brokers only to be told that I'm advocating breaking a contract. Absolutely not. If the funders aren't reconciling and adjusting, it is they that aren't honoring the contract.

[Michael I]

I honestly don't think many brokers understand the reconciliation clause, which is a shame because it can a) help prevent default b) possibly avoid another advance.

With that having been said, not many funders are bending over backwards to explain it to brokers. When I first saw it I asked a funder about it, and was told, "it means nothing. It's in every contract."

I've tried explaining reconciliation to brokers only to be told that I'm advocating breaking a contract. Absolutely not. If the funders aren't reconciling and adjusting, it is they that aren't honoring the contract.

Please i had a merchant that did that and everyone declined this guy for default. I tried explaining that he did not default he went based on the funding agreement and all they did was laugh. It is there for legal reasons and not for a merchant to use or know about .

[WestCoastFunding]

Please i had a merchant that did that and everyone declined this guy for default. I tried explaining that he did not default he went based on the funding agreement and all they did was laugh. It is there for legal reasons and not for a merchant to use or know about .

Yep. Most funders won't touch a deal if they see a change in payments. I get it, too, because they assume they can't service a new position. But some will look at the previous contract, and if their cash flow and size of payment has been increasing in past couple months, they can fund. But that is rare from what I've seen.

[Sean Cash]

It is there for legal reasons and not for a merchant to use or know about .

It is a very important part of the contract and something every broker should discuss with their customer prior to funding.

[Michael I]

this particular merchant took advantage of the mistake the funder made. they put him at 10% and must have went off his volume with the first position funding. I had 12 months and his volume stayed pretty steady.
the funder screwed up by writing 10% instead of 16% of what they were charging him with the daily.
Not to sound like my buddy clapman but if jetblue has a price mistake and you take advantage of it, is it called stealing?

[Sean Cash]

Yep. Most funders won't touch a deal if they see a change in payments.

Ok but that might indicate a decline in sales, which seems like a rational reason to decline a file.

[Michael I]

It is a very important part of the contract and something every broker should discuss with their customer prior to funding.

what is your advice to do with my merchant that no one wants to fund because he did it .

[HDF]

what is your advice to do with my merchant that no one wants to fund because he did it .

Sounds like a file for your buddy Clapman then.

[Sean Cash]

what is your advice to do with my merchant that no one wants to fund because he did it .

Move on to the next customer...