Results 1 to 19 of 19
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08-03-2020, 08:01 PM #1
- Join Date
- Sep 2019
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- 402
FTC to end MCA?
https://debanked.com/2020/08/ftc-com...cash-advances/
Seems like they're fully intent on shutting down MCA.
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08-03-2020, 11:12 PM #2
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- Apr 2014
- Posts
- 781
I told u all this months prior....
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08-03-2020, 11:36 PM #3
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- Feb 2018
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- 1,349
so this will force companies to partner with a federally chartered bank and structure their product as an actual loan pushing out many that would or want to do that setup. banks win as they collect large fees to setup these pass thru's, that is, until they begin to investigate those banks and how they are providing a rent a bank model for MCA's. than they will have to cast a stone on the banking industry as well or turn an eye (web bank, celtic bank, finwise bank, bank of the internet, etc) could these banks be lobbying to end MCA and push for these setups?
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08-04-2020, 08:45 AM #4
- Join Date
- Mar 2014
- Location
- Florida
- Posts
- 2,930
Dave Lambert, Business Development
dave@fcbankcard.com
Merchant Services Consultant
High Risk Merchant Payment Solutions
SBA 7(a) Loans & Short-Term Funding
T/VM: 727-291-7890
Office: 727-233-1111
Skype: fc-financial
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08-04-2020, 08:56 AM #5
- Join Date
- May 2018
- Posts
- 70
An unelected bureaucrat makes a public statement admonishing abusive practices in the industry and all of a sudden everybody becomes chicken little. No, the FTC is not shutting down the MCA industry, nor can they. They are going to make examples of certain players by pursuing the most egregious of violations (i.e., Par, Yellowstone, etc) to curb these abuses and set clear guidelines as to what's unacceptable. You can't call a transaction an MCA and then behave as if it's a loan. That's never been okay, and regulators are finally putting a stop to it. But that won't end the MCA as a product or industry. It will simply exterminate those who can't otherwise adapt.
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08-04-2020, 10:31 AM #6
They cant shut down the industry, his opinion is subjective to the examination of but a few advances given by what we consider even in our industry to be "high risk" funders. MCA operates in a world outside of the banking realm which they might be accustom to, therefore the FTC can make their statements based on their opinion but as long as we do not enter into the "loan" space or use language that suggest we are providing a loan and not a purchase of future receivables then these statements are no threat to the industry. As mentioned by someone else above they might only be able to attack companies providing additional positions when the merchant is clearly overleveraged thereby putting them at risk of bankruptcy, but if the contract is clear in its wording then the merchant made a conscious decision of taking more capital against his future receivables and there's nothing to penalize.
(as a disclaimer, I am no attorney; just stating my opinion)
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08-04-2020, 11:21 AM #7
Blah, blah....all these new regulations are going to do is bring Cash Advance back to a receivables product. You want to do daily ACH? fine...he payments can fluctuate according to sales volume.....and NOT be considered a default.
Yeah, these 3rd, 4th. 5th. etc positions are going to be way tougher, but then again....when did a 5th position 20 day 1.49 offer ever help a merchant? Help a merchant do what?
So all of you folks out there who lived and died by the stack position, yeah, you have reason to be concerned....you will be pushed out.
BTW, several of the bigger companies out there (yes, YSC-FUNDRY included) are already taking steps to remedy this process and adhere to the true receivables guidelines.
So I guess you cats better catch up on your CC processing guidelines and material, because it looks like we are headed back that way.Last edited by Chambo; 08-04-2020 at 11:23 AM.
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08-04-2020, 11:29 AM #8
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- Jun 2015
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- 3,320
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08-04-2020, 11:29 AM #9
Bottom line here is companies will have to follow rules. If you follow the rules you will be fine. For too long companies have done what they wanted, how they wanted and had little regard for the few rules this industry does have. Now those companies are paying the price
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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08-04-2020, 02:05 PM #10
- Join Date
- Jun 2019
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- 193
People see these headlines so often that they think this isnt a big deal, and its not a big deal TODAY. But its coming. This industry is heading for more regulations and it gets closer and closer everyday. Those who are in denial and dont prepare will be left holding an empty bag and scrambling to figure it out.
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08-04-2020, 02:16 PM #11
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- Jun 2015
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- 3,320
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08-04-2020, 02:20 PM #12
- Join Date
- Jun 2019
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- 193
It depends on your role in the industry. I dont claim to be an expert on this and i dont know all that can be done to prepare, but at the bare minmum id say as a broker you should be trying to incorporate some other products (LOC's, SBA loans, invoice factoring, equipment financing etc etc) particularly if your model relies on high risk, short term, multiple position deals.
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08-04-2020, 02:43 PM #13
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- Jun 2015
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- 3,320
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08-04-2020, 03:41 PM #14John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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08-05-2020, 08:47 AM #15
- Join Date
- Mar 2015
- Location
- Boynton Beach
- Posts
- 3,473
Agreed, but most will gravitate back to what they are comfortable or accustomed to doing rather than learning or exploring other options. Exhibit#1: There are currently over 3000 people on this forum right now. Over a third of the people online are viewing Merchant Cash Advance threads.
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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08-05-2020, 11:04 AM #16
You can have it left, right and in between in the contracts. If the dip**** salesman s saying "loan", if they are selling it as a "loan", and someone has this on tape....well, they have to dead to rights fr false advertising.
Kids wanna roll their eyes at us older guys, but their recklessness (and let's be honest, downright laziness) will get EVERYBODY pinched
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08-05-2020, 11:10 AM #17
Well yeah theres always that possibility when these new guys dont train any of their agents and just tell them to dial and say whatever it takes to bring the client in, then these guys dont deserve to be in the industry. Theres no shortcut, hopefully they're all having training meetings right now and teaching their employees and actually putting in the work. Or else, as you said they will be the downfall of the hole industry as we know it.
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08-05-2020, 11:17 AM #18
- Join Date
- Feb 2016
- Posts
- 242
Been saying the industry will be regulated for 6 years now. Hopefully they administer some type of background checks or licenseing in order to be able to sell cash advances. Our entry barrier is way too low.
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08-05-2020, 11:28 AM #19
- Join Date
- Feb 2017
- Posts
- 3,397
Or the untrained brokers who are pure "salesmen" will be driven out, and it will be better quality people on the phones, and the trained ones will do a much better job, and the idiots will just leave.
Let's call a spade a spade - Biden is a bit of a wildcard. He went toe-to-toe with Elizabeth Warren to stick up for the credit card industry and bankruptcy law, back in 2005. However, the liberal Democrats have gotten waaaay too much press, and Biden might have to give in to what is probably against his ideology. (He's a Catholic who doesn't currently oppose gay marriage.) So make sure you're able to do higher quality training, and don't grow too fast, and keep on trucking.