[Finance1]

The issue with going "mainstream" is that all the little guys who have been whacking folks for fees, or offering sub par offers (because up until now they could) will no longer be able to do it. The top tier paper will go to levels that none of the existing funds out there are willing to go (12 month 1.06's? 18 month 1.18's?).

Almost as if we have been guinea pigs for the larger guys waiting a couple years to see if this was a flash in the pan or not. Now they are coming in with big guns and big money.

Should make for some interesting times in the near future.

Good post. Sometimes I worry about institutions coming in and taking over and other times I don't even blink an eye. It's all about ROI. Coming in with sick low rates is simply asking for a negative ROI. It takes a couple of years (at least 18 months) to really understand what you are getting into. I know that from experience. The book needs to season before you know if your underwriting is up to par and most importantly if you are making the returns you expected. I doubt any cash company of any size entered the market and made the returns they expected going in.

I say bring on Amex and Wells and others. It only makes the industry more credible. Something that the industry has been lacking since it's birth. Amex and Wells etc aren't going after the same clients that make up the majority of our book. I think that applies to most cash companies until you get into the top 10 like AMI, MCC, BFS, etc. They are very big and very thirsty. I would think they would stand the most to lose with larger institutions entering the market.

At the very least, I'm not worried about my company. We're small and don't want a big slice of the pie. I think our desired client is always attainable. Plus we run very low overhead and our capital isn't leveraged. We don't have to pay for it like others. Hopefully that keeps us competitive long into the future.

And I totally agree about interesting times coming up. Look at just the last 2 years and how much has changed. The trends are only getting stronger.

[Chambo]

Probably using the lending as a way to hold onto/secure merchants to sell their wares, use their banking, etc. Wells, Citi, Chase, B of A all do that with large merchants. They give them processign at interchage flat, or even interchange minus, to secure their banking business (where the real mony is).

Amazon is now going to be "lending money" to merchants (too proud to call it factoring?). Obviousy a way to lock in the sellers and also help increase the sales on their website (for which they collect commissions).