Merchant Cash Advance Forums  

Go Back   Merchant Cash Advance Forums > Merchant Cash Advance Providers, ISOs, & MSP Discussions > Merchant Cash Advance Providers & Professionals
Register FAQ Members List Calendar Search Today's Posts Mark Forums Read

Merchant Cash Advance Providers & Professionals Discuss everything related to Merchant Cash Advance Providers.

Merchant Cash Advance Forums
Reply
 
LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 06-23-2008, 01:13 PM
Junior Member
 
Join Date: Jun 2008
Posts: 16
Default merchant defualt rate

are more merchants suddenly going out of business? it seems that default rates are soaring as high as the price of oil- is there any correlation?
Reply With Quote
Sponsored Links
  #2 (permalink)  
Old 06-24-2008, 10:07 AM
Member
 
Join Date: Jun 2008
Posts: 75
Default

I think it all depends on the quality of the deal that the MCA provider approves. You got merchants that are a collection waiting to happen, yet with the fierce competition some MCA providers are more lenient than others in approving deals, resulting in a higher default rate. The highest default ratio I have heard to date was First Funds at around a 19% default rate. The numbers still work somehow
Reply With Quote
  #3 (permalink)  
Old 07-01-2008, 04:07 PM
Junior Member
 
Join Date: Jun 2008
Posts: 16
Default

maybe they don't- i heard first funds is looking to get out of the business.
they r trying to sell their book of business. i guess second source wasn't the best thing for them.
Reply With Quote
  #4 (permalink)  
Old 07-10-2008, 01:07 PM
Junior Member
 
Join Date: Jul 2008
Posts: 1
Default

I've heard many things about First Funds default ratio and personally I believe it's because of how the deals are structured. Looking at companies like AMI for example, consider the merchants entire receivable before deciding the retrieval rate. Taking 25% of a merchants CC receivable can be very devastating if most of their revenues are through CC.
Reply With Quote
  #5 (permalink)  
Old 07-10-2008, 04:33 PM
Member
 
Join Date: Jun 2008
Posts: 75
Default

I must agree with premium.
Reply With Quote
  #6 (permalink)  
Old 07-30-2008, 03:58 PM
GRP Funding's Avatar
Senior Member
 
Join Date: Jul 2008
Location: Springfield, MA
Posts: 548
Default

Quote:
Originally Posted by samthemoneyman View Post
The highest default ratio I have heard to date was First Funds at around a 19% default rate. The numbers still work somehow
There were a few other companies that went under with default rates a bit higher that that. Sometimes it's not only about the default rate - but also how good the company is on collecting their bad debt. Can they work with the merchant in-house to get them on a payment plan of some sort? Can they find a collections company to buy the bad debt? Or do they get a lawyer to go after the merchant?

Of course, the numbers would work a lot better if the default ratio was less than 19% - but they have to have some procedures in place to collect some of that back.



Trust me, you don't want this guy coming after you for shutting your machine off.
__________________
Brian Bartos
Business Development
GRP Funding, LLC
1350 Main Street
Springfield, MA 01103
Toll-Free: (877) 571-7999
Direct: (413) 241-8983
Fax: (800) 823-2175
E-Mail: bbartos@grpfunding.com
GRPFunding.com | Request ISO/Agent Info

Last edited by GRP Funding; 07-30-2008 at 04:01 PM.
Reply With Quote
  #7 (permalink)  
Old 07-30-2008, 06:14 PM
Member
 
Join Date: Jun 2008
Posts: 75
Default

haha thats great!
Reply With Quote
  #8 (permalink)  
Old 07-31-2008, 09:03 AM
Senior Member
 
Join Date: Jul 2008
Posts: 145
Default

Quote:
Originally Posted by samthemoneyman View Post
I think it all depends on the quality of the deal that the MCA provider approves. You got merchants that are a collection waiting to happen, yet with the fierce competition some MCA providers are more lenient than others in approving deals, resulting in a higher default rate. The highest default ratio I have heard to date was First Funds at around a 19% default rate. The numbers still work somehow
I agree. In addition to approving the higher risk deals there are some companies willing to give merchants more money than they should and/or take more of the processing than they should which does nothing but hurt the merchant and put a black mark in the CA industry.

Some agents get excited when they are able to get a deal approved with another company when the merchant has a low fico or when they are able to get the merchant more money but you have to ask yourself if a company is willing to take that on, how long will they be around?
__________________
Thanks,
Laura Franklin
(937) 626-4697
laurafranklin45429@gmail.com
Reply With Quote
  #9 (permalink)  
Old 08-03-2008, 05:54 PM
1st Merchant Funding's Avatar
MCA Forum Sponsor
 
Join Date: May 2008
Posts: 328
Default

In general anything over a 25% retrieval for a merchant cash advance is dangerous for the merchant. The higher you go on the retrieval the less likely the merchant will renew, and you are putting yourself at the risk of the merchant defaulting. We typically stick to anywhere between 10% on the low end, and 25% on the high.
Reply With Quote
  #10 (permalink)  
Old 08-03-2008, 07:12 PM
Cash4Portfolios's Avatar
Junior Member
 
Join Date: Jul 2008
Posts: 25
Talking

Quote:
Originally Posted by GRP Funding View Post
related?

__________________
I buy Merchant Cash Advance Portfolios &
Merchant Account Portfolios 4 CASH


PM me with your portfolio details
Reply With Quote
Reply


Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On
Forum Jump



MCA Forums Sponsored by:


All times are GMT -5. The time now is 10:17 AM.


Powered by vBulletin® Version 3.7.2
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Search Engine Friendly URLs by vBSEO 3.2.0 RC8
vB.Sponsors
Ad Management by RedTyger