[Sachip24]

I've seen this happen with two of my clients because of dishonest brokers and I want to share my experiences with you. I typically get a merchant a reverse consolidation if they have a holdback percentage towards MCA's over 25%. For example, I had a merchant with 4 positions, 32% leverage and the reverse got them down to 24% leverage. This typically helps the client operate in the short term and get them out of an overleveraged position.

Lately, dishonest brokers are calling my clients and telling them to take funding out without clearing it with the reverse company. In many cases, these stacks are 60 or 80 day 1.499 factors with 10% fees because those are the only funders who stack a reverse. Immediately the reverse company then stops funding the client and continues taking their daily debit. A client who was down to 24% leverage is now at a holdback above 60% because of the terrible 60-day deal and the large reverse payment with no funding coming in. In both cases, the merchant could no longer afford payments, freaked out because the broker told them it was fine to stack a reverse and did a block payment on everyone.

I know the reverse is a somewhat newer product and I wanted to share my experience because the brokers who are stacking reverses are hurting all the funders and pushing the merchant out of business.

your merchant knew he was not supposed to take more money regardless of what another broker told them. They make it very clear you can't take additional funding while in a reverse and clearly states in the contract you are not allowed to take additional funding while in a reverse. Do yea dishonest brokers are an issue but merchants aren't so innocent either, they know what they are doing and attempting to do then blame the broker lied to them.