Level Ex Funding
This past week, a client sent me an offer that one of his competitors sent to a prospect that he was speaking with. The offer was from Level Ex Funding. The terms of the deal were 250,000 with a $449,000 payback with a $44,000 fee. The merchant is paying approximately $200,000 in fees to acquire the 250,000. We have featured deals in the past that Level Ex had done but this one may be the worst. It is important to stay in touch with your prospects and clients to make sure that they don’t take these types of deals. In many cases these deals are getting done by way of line and credit bait and switch. These are also the types of deals that are getting the attention of regulators and law-enforcement. I was contacted several months ago from a broker who was receiving a rash of subpoenas from the Attorney General‘s office in New York for excessive fees. There are two types of brokers: the ones that are looking for quick hits that are ripping off merchants and the ones that are building books for the future. You want to be the second type of brokers it is more work, and investment capital but in the end you can build a massive company and stay out of prison
IG Fraud
One of my clients called me this week and told me that he sent a deal to a broker that he had met on Instagram. My client was having a difficult time, getting the deal funded and sent the deal to the broker, hoping they could co-broker and work on it together. After sending the deal off to the broker the conversation went dark, and he later found out that the broker funded his client and did not pay a referral fee. Many MCA brokers that are flaunting on Instagram with their super cars and high-end watches are essentially lead brokers. They are using this as a marketing technique to have young inexperienced brokers send them deals to co-broker, and steal the paper that’s being sent to them. I know in many cases young new brokers are desperate to fund deals and think that brokers who appear to be rich can help them get their deals done. You must do your diligence and VET the best you can before sending your hard earned and hard worked deals off to online fraudsters who are looking to take advantage of young, hard-working, brokers. Be careful.