[PJLamar38]

My go-to submissions here are always

IOU Financial and Quarterspot

Am I missing anybody?

Appreciate the insight-
Pete

[NoBigDeal]

My go-to submissions here are always

IOU Financial and Quarterspot

Am I missing anybody?

Appreciate the insight-
Pete

If IOU or QS doesn't give you what you're looking for, you should try Pearl
PM me if you're interested

[Funder_Abe]

My go-to submissions here are always

IOU Financial and Quarterspot

Am I missing anybody?

Appreciate the insight-
Pete

We are able to go up to 10 months on a 2nd position and offer a weekly payment option. Call or email me if you want more information.

[soscap]

We have very affordable pricing for 2nd position deals.

[WestCoastFunding]

1stMerchant

[GSilverman]

Do you actually believe any of these guys have 1.18-1.25 Buy Rates on 12 Month Deals With No Origination Fees?

[ridextreme]

1st Merchant

If IOU or QS doesn't give you what you're looking for, you should try Pearl
PM me if you're interested

I don't know why you're recommending Pearl for a good second position. They have the worst options, worst calculator and offer the worst points.

[GSilverman]

Pete asked a valid question. No real answers yet.

[Michael I]

1st Merchant



I don't know why you're recommending Pearl for a good second position. They have the worst options, worst calculator and offer the worst points.

because he works there.

[anonymous]

Pete asked a valid question. No real answers yet.

I'm unaware of any that can compete with those two on second position. WestCoast mentioned 1st Merchant, which I will be looking into asap. That said, it ultimately matters who is in first. If term money, there are plenty of first position lenders who will look at it, Breakout included. After QS/IOU, usual suspects: Pearl, EBF, Knight (even though Knight doesn't like me). & Wall Funding

[Michael I]

after those 2 it is the ones that can do 10 months. That now became a long list

[jotucker1983]

My go-to submissions here are always

IOU Financial and Quarterspot

Am I missing anybody?

Appreciate the insight-
Pete

An "A Paper 2nd Position" is an oxymoron lol.

[MCABroker]

I'm dying!!

[MCNetwork]

An "A Paper 2nd Position" is an oxymoron lol.

That used to be the case until recently. Nowadays, competition is so fierce that 2nd position rates are becoming pretty low. Soon you'll see A paper 3rd positions being advertised lol.

[HDF]

Sorry, but I really have to agree with what I think John was saying. "A" theoretically refers to A credit. ie. the ability to repay a debt.

Stacking severely and materially effects that. Not to mention the hit to their reliability as a debtor due to the apparent willingness to break a contract or covenants.

The rate they get is a separate matter altogether in my mind. Any stacked merchant falls way down the ladder whether or not someone throws money toward them. jmho

[MCNetwork]

An "A" paper merchant can have a bonafide reason to get a second position. Maybe he miscalculated the amount that he originally needed or an unexpected expense suddenly arose. So long as his credit score is high, balances are high, revenue is steady and the combined pull of the advances is a low percentage of gross, he's still an "A" merchant in my book. The terms "stacking" and "2nd position" are MCA industry inventions and don't have real bearing in the world of legitimate corporate finance. However, once the "A" merchant takes a 3rd position, there's really no justifiable reason to do so and this reeks of desperation and financial trouble. Therefore, he'll quickly drop to a "C" merchant.

[HDF]

Unless of course if your firm or you yourself personally funded the first position. Then they'd be F paper in your book upon on any violation of your signed funding contract.

But I do understand your thoughts based on what has been going on in the MCA space for a long while.

[WestCoastFunding]

Dec 2017: any merchant with less than 4 positions will be considered A paper.

[MCNetwork]

The main reason why stackers have a foothold with "A" paper merchants is because the first position funder is too rigid with its renewal process or they have capital limitations. For example, most of them won't renew a merchant unless he's 50% paid off regardless of what the bank statements look like. That's because they would rather do a "refinance" rather than an "add funds" since it's much more profitable to the funder. Plain greed is what opens the door to stackers.

In order to combat the stackers, the first funder will have to forego short-term greed for long-term gains. They'll have to do more "add funds" transactions and show more flexibility. They'll need to do some actual customer service instead of just sitting back and collecting their daily ACH's. Renewals will need to be granted on a case by case basis, not according to a set percentage point being met. If the first funder is unable to meet a merchant's needs, then he has every right to look elsewhere. A business owner's only priority is the survival of his business. He shouldn't have to be handcuffed by a one-sided draconian contract that heavily favors the funder.

[HDF]

Those products are coming. Who will be left to sell them?

[Matrix1]

That's actually the best reasoning I've ever heard MCNetwork, in that regard and I agree with you 100%. I only hope it changes to that hell of a lot faster then what it seems like it's gonna take

[jotucker1983]

Yeah, in my opinion, the moment a merchant takes on a stacked deal/2nd position, they immediately drop two paper grades. So that A Paper merchant becomes C Paper.

I do understand that a lot of first position funders/lenders won't provide additional monies until the merchant is 50% - 60% paid down, as well as, many times won't issue as high of an approval as the merchant "thinks" they should get. But there's a lot of variables in underwriting, including looking at the merchant's bank balances, growth projection of their sales volume, their industry type, number of transactions, average ticket, etc.

Some first position funders/lenders are lending higher limits now, they have gone from a strict 10% of gross sales limit to around 15%. But even with that, a lot of these merchants still seek to stack because they are unorganized, do poor planning, etc.

It just seems like a downward spiral though when a merchant starts stacking. Not all merchants are like this, but many of them are....where they stack once, then they start stacking again and again and again. It's as if the capital infusions are like "crack" and they become addicted.

[Karen37a]

I agree with Mcn on almost everything most of the time but omg I agree with John on one thing ( the drop in grade)

When people take a second advance before the first is up for renewal or paid off they will automatically be considered B-d paper. There are valid reasons someone who was A paper needs more money and they "technically" still might be "A" ....lets not always say they need money for something negative or an bad expense, lets say its something positive like a new contract that they received spur of the moment that they need funds for , or expansion, something like that.Even so they are still going to be categorized as B/C/D paper because it is a 2nd position. 2 position lien almost always has to be B or below. By definition its a 2nd .

Also 2nd advances can be B plus Paper for many reasons . e.g. a new broker is taking them away from the original Iso and Direct lender, there may not be anything wrong with merchant...maybe they just cant net 50, or they hate their old broker or the company that they got the advance from. Or what Mcn said.

It isnt always about someone saving .3 or $5 dollars a day . There are some legitimate reasons to stack. And not all merchants are doing bad. Some have positive expansion and growth plans, marketing or renovation etc. These merchants are harder to get to because they do not need you. They are in the drivers seat and there are a lot of them...many many other reasons responsible merchants want money. And the race is on to find them

( also most of the merchants who seem like crack addicted stackers are manipulative smart cunning nasty basta**s, they are grabbing as much money as they can because in their mind they have already given up and want as much $$ as they can get before they shut down or they want to keep the door open a bit longer so they do not lose income then figure out their future before they are unemployed ,or just skip off with the money and stay open. Then they are going to cry..ooo my broker took advantage of me as they drive away in a bmw to the casino, that psf fee of 2 % was unfair. )

ps I have never seen 1st merchant go 12 months on a second, they err on caution and are a bit conservative but fair. Ive seen 7-10 months max on seconds . You never know though.

[Karen37a]

The main reason why stackers have a foothold with "A" paper merchants is because the first position funder is too rigid with its renewal process or they have capital limitations. For example, most of them won't renew a merchant unless he's 50% paid off regardless of what the bank statements look like. That's because they would rather do a "refinance" rather than an "add funds" since it's much more profitable to the funder. Plain greed is what opens the door to stackers.

In order to combat the stackers, the first funder will have to forego short-term greed for long-term gains. They'll have to do more "add funds" transactions and show more flexibility. They'll need to do some actual customer service instead of just sitting back and collecting their daily ACH's. Renewals will need to be granted on a case by case basis, not according to a set percentage point being met. If the first funder is unable to meet a merchant's needs, then he has every right to look elsewhere. A business owner's only priority is the survival of his business. He shouldn't have to be handcuffed by a one-sided draconian contract that heavily favors the funder.

I just have to repost this.Semi clapping my hands.

Mcn dont tell them you are giving away the Trojan horse lol Soon you are going to have me calling business that never had an advance before . I kinda hope in a selfish way that greed cant be conquered (this is terrible ) and structured mentality.. in fact I know it cant. Have at it.

[WestCoastFunding]

A paper: Banks
B-F paper: MCAs