Phil Grossfield's Blog

WINNER!  

I used to be in several fantasy football leagues but over the last few years I opted out…it was just taking too much time and I hated the scoring systems. Now I play a couple of simple betting leagues with a bunch of friends instead.

1. The first league I simply choose the winning teams each week. If I choose more winners than anyone else, I win the pot and if there’s a tie, the one who chooses the closest final score on Monday Night Football wins.  Last week I was the winner thank you very much.
2. The other league is called 33 and it’s pure luck. I play with all my Minneapolis buddies I grew up with.  Everyone gets a team randomly assigned for the year.  If my team on any given week scores exactly 33 points, I win the pot.  If no team scores exactly 33 points, then the pot gets added to the following week, and since 33 is rarely scored number, that pot builds up fast. So far this year, no team has scored exactly 33 points.  I have two teams…the 49ers and the Raiders.

Always Ask Merchant’s If They Have Real Estate

• Make larger commissions with larger loan amounts – our average loan amount is $500,000.
• Monetize MCA declines – with real estate we are very creative to make loans. 
• Pay off existing stack of MCAs to lower Merchant’s payments and make more room for future financing.
• Make 2 loans with 2 commissions – get your Merchant an MCA loan and at the same time apply for a larger loan with WBL.

My Schedule…and A Little Extra…

The Vikings’ Curse

I can’t help it.  I grew up in St. Louis Park, Minnesota and spent the first 30 years of my life in the Twin Cities…and that makes me a Vikings’ fan.  And yes, it’s been a painful and difficult thing to endure for 55 years.  I remember watching Fran Tarkenton, Chuck Foreman, Sammy White, Carl Eller and Ahmad Rashad in the bitter-ass cold of Met Stadium.  Four Super Bowl appearances and zero Super Bowl titles to show for it. I lived in Wisconsin for four years…hated the Packers before I moved there and hate them more after. I lived in San Diego for fifteen years…I tried being a Chargers fan but when the Vikings came to town I spit on my Ladinian Tomlinson jersey.  Now I live in Scottsdale…been here for eight years. I try to be a Cardinals fan, but I just can’t.  I’ll always be a VIkings’ fan, through bad and bad…it’s a curse I’ll never shake…

My Schedule:  Generally available.  If you need me urgently, text me at (212) 271-8267.  And if you want to ensure we have a block of time together, schedule a meeting on my calendar using this appointment link. 

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Monthly Interest Only Loans

I know your Merchants HATE weekly and daily payments. And while WBL makes loans using a money factor with a regular amortizing weekly payment, we also make loans using an interest rate with an interest only monthly payment.  Your Merchants will be very happy to get away from the daily and weekly withdrawals from their business bank accounts!  And interest only payments are much less than amortizing payments because, well, they’re only paying the interest and not principal each month. I advise you contact your past clients and ask them if they need more capital, and while you’re at it, be sure to find out if the y have real estate to pledge as collateral.  If they do, we can consolidate their MCA loans and get them out of daily or weekly payments.

Last Week:  Junior Lien Positions on Real Estate Collateral.

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Resource Links, Process & Loan Intake Instructions

Appointment Link – Get On Phil’s Calendar.

White Label Marketing Flyers Using Your Logo & Contact Information.

Flyer For Independent Sales Organization – ISO — Phil Grossfield

To Qualify For A Business Loan.  (1) Equity in Real Estate – we’ll utilize virtually any type and combination of real estate in any condition, and (2) Revenues – sufficient to support/afford the loan payments.  If they have these two, we can overcome just about any hurdle…

Process To Get Started.  Email the loan opportunity to me and I will provide guidance…see below. At the same time, I will send the loan opportunity to our Intake Department to get their feedback on the real estate collateral, affordability, and any other considerations. On the same day or next, you and I will discuss and decide what to Offer your Merchant Borrower. If accepted, then we’ll send them an authorization form and formally submit the loan.

Email the Loan Opportunity To Me.  Send me (1) an Application with all the Merchant/Borrower’s information including their mobile number and email address, (2) a full description of the real estate (download this Excel REO Schedule), and (3) a minimum 3-months business bank statements (6 months is better if you have it).

Always Ask Merchant/Borrower If They Have Real Estate – What Real Estate Will Be Acceptable As Collateral?

Remembering 911

My Schedule…and A Little Extra:  I was the first one to the office which was typical. I turned on my computer and realized instantly that something was wrong. I turned on the TV and literally thought to myself, “is it April Fool’s Day? No. Oh my G-d!” I ran to the conference room where we had a much bigger TV and flipped the switch…slowly I backed away and instinctively found a seat…eyes and mouth wide open…  The next office dweller dashed in and said, “did you hear…”. “Yes,” I interrupted, “I have it on the TV.”  He sat down in slow motion, and we watched in silence. One by one the employees of our small business walked in and slowly sat down…as the first one to see what was happening that morning I filled them in, blow by blow.  I’ll never forget the collective gasp when the first tower went down.

My best friend was on his cell phone the whole time trying to reach his brother who was in Manhattan…of course the cell lines were busy. When it was “done,” our CEO announced the work day was cancelled. He told us to go home, try to explain what happened to our kids and ourselves, and heal.  As I explain to my children, yes, there are really bad people out there and it’s impossible to even try and understand what goes through their heads. But there are more good people in the world…and we must challenge heartless, baseless hatred by being brave, thoughtful, and kind…listen to your gut and act from your heart. It was a confusing time…one of anger, sadness, and strong patriotism. Do you remember Whitney Houston’s performance of the Star Spangled Banner at Super Bowl XXV?  It makes me tear up every time I watch it.

My Schedule:  With the exception of Initial Review and Investment Committee meetings, and management meetings throughout the week, I’m generally available.  Just like you, I’m a busy guy thank goodness, and although I do my best to pick up the phone as much as possible and return emails quickly, sometimes it’s not advisable nor possible.  If you need me urgently, text me at (212) 271-8267.  And if you want to ensure we have a block of time together, schedule a meeting on my calendar using this appointment link. 

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Junior Lien Positions on Real Estate Collateral

WBL makes loans to businesses and we use real estate as collateral for all of our loans. I’m often asked if we will take junior lien positions on the properties and the answer is YES. Although every lender wants to be in senior lien position, including WBL, we will take a junior lien position under most circumstances.  Here are some general guidelines to know regarding junior lien positions keeping in mind that every loan has it’s own nuances so we might expand or restrict the same.

• With sufficient equity in a property, we will lend in junior lien position. In fact, we’ve been known to take a 3rd or 4th lien position!
• We will go in junior lien position on residential properties, commercial properties, industrial properties, and even on specialty properties, but not on land.
• If the senior lienholder is a private institution, as opposed to an institutional lender such as a bank, then going in a junior lien position can be problematic because private lenders add in all kinds of penalties and fees that eat up the equity in the property. In some cases, we will take out the senior lienholder by paying them off which is a good option because it allows us to lend to your Merchant Borrower, puts WBL in senior lien position, and increases the loan amount which increases your commission. 
• If our loan amount is very small (skinny) compared to the senior lien, then we may require that the senior lien be paid down to bring it more proportional. For example, if the senior lien is $1m and our loan is just $100,000, then the lien ratio is 10 to 1.  In this example the economics don’t make sense for us should the Borrower default.  However, if we pay down the senior lien, say by $200,000, then the remaining senior lien goes down to $800,000 (from $1m) which means our loan goes up to $300,000 (from $100k).  Now our lien ratio is about 2½ to 1 ($800k/$300k) and now we’re in business!  We can look at these on a case-by-case basis.
  

That’s why it’s so important you ask every merchant whether they have real estate. ALWAYS ASK EVERY MERCHANT WHETHER THEY HAVE REAL ESTATE!  In fact, you should investigate whether merchants whom you’ve turned down or need more money have real estate.

Last Week:  Lower/No Payment Loans – Subsidies and Interest Reserves.

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Resource Links, Process & Loan Intake Instructions

Appointment Link – Get On Phil’s Calendar.

White Label Marketing Flyers Using Your Logo & Contact Information.

Flyer For Independent Sales Organization – ISO — Phil Grossfield

To Qualify For A Business Loan.  (1) Equity in Real Estate – we’ll utilize virtually any type and combination of real estate in any condition, and (2) Revenues – sufficient to support/afford the loan payments.  If we have these two, we can overcome just about any hurdle…

Email the Loan Opportunity To Me.  Send me (1) an Application with all the Merchant/Borrower’s information including their mobile number and email address, (2) a full description of the real estate (download this Excel REO Schedule), and (3) a minimum 3-months business bank statements (6 months is better if you have it).

Process To Get Started.  After I send the loan opportunity to our Intake Department, they’ll send me feedback on the real estate collateral, affordability, and any other considerations. On the same day or next, I’ll present potential loan structures to our Market Clearance team for guidance. Then you and I will discuss and decide what to Offer your Merchant Borrower. If accepted, then we’ll send the an authorization form and formally submit the loan.

Always Ask Merchant/Borrower If They Have Real Estate – What Real Estate Will Be Acceptable As Collateral?

NO LABOR FOR LABOR DAY

The concept of Labor Day was to honor and recognize the contributions of laborers to the achievements of the United states…at least that’s what is was in 1894. I find it ironic that we celebrate Labor Day this year and have such a shortage of labor because apparently people don’t want to go back to work. Isn’t that counter-intuitive since the cost of living has risen so steeply with inflation? What exactly is going on? Why do I see restaurants with closed off sections because they don’t have enough workers? Why do I see businesses with restricted hours or that shut down periodically for the same reason? Why is it that every support department excuse for bad service is that there aren’t enough employees? Is it because people are afraid of COVID and don’t want to go to the store, or restaurant, or office? Or is Covid making it harder for people to return to work, like for parents whose kids are kept out of school frequently and the cost of childcare has skyrocketed? Is it because people have extra savings and/or are retiring earlier and don’t need to work? Is it because people just don’t see the value in working anymore…that the money is outweighed by their freedom particularly since wages aren’t enough to pay for everything anyway? I mean, are the benefits of not working outweighing working? But how do people afford to live…to eat? Really, I want to know…what is going on out there…why doesn’t anyone want to work and how are they surviving?

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No Payments & Reduced Payments – Subsidies & Interest Reserves

Let’s say your Merchant has limited revenues and it’s preventing you from getting them an MCA loan amount they need. But you were smart! You discovered they own real estate and called me! I offer your Merchant a MUCH LARGER LOAN AMOUNT and apply a subsidy or an interest reserve to overcome the limited deposits/revenues. So, what exactly is a subsidy and interest reserve and how does it work?

SUBSIDY: a subsidy reduces the monthly payment by splitting the subsidy amount over a period of time.  For example, if we build in a subsidy amount of $24,000 for 12 months, then we can reduce the regular monthly payment by $2,000/month for 12 months. Obviously this makes the loan payments more affordable for the Merchant.

INTEREST RESERVE: an interest reserve covers the entire monthly pavement for a period of time. For example, if we build in an interest reserve amount of $24,000, and the regular payments are $4,000 per month, then for the first 6 months of the loan the Merchant’s payments are covered entirely and they don’t have to make a payment until month 7. This gives them time to build up their revenues.

That’s why it’s so important you ask every merchant whether they have real estate. ALWAYS ASK EVERY MERCHANT WHETHER THEY HAVE REAL ESTATE! In fact, you should investigate whether merchants whom you’ve turned down or need more money have real estate.

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Consolidate MCA Loans Using Property & Earn Large Commissions

Payoff the Merchant’s open MCAs, lower their payments, make the new payments monthly instead of daily/weekly, earn a large commission for yourself, and make room for more MCA loans in the future…and do it all simultaneously.

How’s that sound? WBL loans are not considered MCA loans, rather, we make loans to businesses using real estate as collateral. That’s why it’s so important you ask every merchant whether they have real estate. In fact, you should investigate whether merchants whom you’ve already funded have real estate ,,, I guaranty there are loans right in front of you that you didn’t even realize were there. Moreover, with real estate, we can overcome most issues that resulted in a declined MCA loan. And if your Merchant was looking for more cash but you were limited by an MCA loan, there’s likely a much larger loan amount available if they have real estate. ALWAYS ASK EVERY MERCHANT WHETHER THEY HAVE REAL ESTATE!

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Resource Links, Process & Loan Intake Instructions

Appointment Link – Get On Phil’s Calendar.

White Label Marketing Flyers Using Your Logo & Contact Information.

Flyer For Independent Sales Organization – ISO — Phil Grossfield

To Qualify For A Business Loan.  (1) Equity in Real Estate – we’ll utilize virtually any type and combination of real estate in any condition, and (2) Revenues – sufficient to support/afford the loan payments.  If we have these two, we can overcome just about any hurdle…

Email the Loan Opportunity To Me.  Send me (1) an Application with all the Merchant/Borrower’s information including their mobile number and email address, (2) a full description of the real estate (download this Excel REO Schedule), and (3) a minimum 3-months business bank statements (6 months is better if you have it).

Process To Get Started.  After I send the loan opportunity to our Intake Department, they’ll send me feedback on the real estate collateral, affordability, and any other considerations. On the same day or next, I’ll present potential loan structures to our Market Clearance team for guidance. Then you and I will discuss and decide what to Offer your Merchant Borrower. If accepted, then we’ll send the an authorization form and formally submit the loan.

Always Ask Merchant/Borrower If They Have Real Estate – What Real Estate Will Be Acceptable As Collateral?

First, this might be a spoiler so if you haven’t watched it yet on HBO I encourage you to do so, but don’t read any further here. In my opinion, Game of Thrones may be the best series ever, maybe with the exception of Breaking Bad. I just finished watching the entire GOT series for the second time in anticipation of the new series entitled House Of The Dragon which just started.  That said, MANY people were upset with GOT’s ending after 8 seasons, including me. The main consensus was that the writers rushed the last season and failed to properly develop Daenerys Targaryen’s character before she went completely dark and torched King’s Landing. HOWEVER, after watching the series again, I now feel better about it having realized they did provide several hints to her destructive nature leading into the final season. Just before she goes bonkers her first dragon was murdered and she lost half her army fighting the Night King. Then, shortly thereafter her second dragon was murdered and her best friend was beheaded right in front of her by Cersei Lannister. At this point she understandably lost her blank. So, although I wish they had revealed her monstrous character more profoundly and earlier, you can rest easy knowing I’ve forgiven the writers. Now, on to House Of The Dragon!.

When To Call Me For A Loan – Reasons to Use WBL

1. Your Merchant needs more money than you can get approved for an MCA, and they have equity in real estate.
2. You funded an MCA loan for the Merchant and they want a second loan for more cash out, and they have equity in real estate.
3. The Merchant was declined for an MCA loan for any reason, and they have equity in real estate. We can overcome just about any reason they were declined:
   • Declined because of poor cash flow or declining deposits.
   • Declined because of too many defaults.
   • Declined because of too many open MCA loans.
   • Declined because FICO score too low or other derogatory credit.
   • Declined because they haven’t been in business long enough or their industry in unacceptable.

Resource Links, Process & Loan Intake Instructions

Appointment Link – Get On Phil’s Calendar.

White Label Marketing Flyers Using Your Logo & Contact Information.

Flyer For Independent Sales Organization – ISO — Phil Grossfield

Email the Loan Opportunity To Me.  Send me (1) an Application with all the Merchant/Borrower’s information including their mobile number and email address, (2) a full description of the real estate (download this Excel REO Schedule), and (3) a minimum 3-months business bank statements (6 months is better if you have it).

To Qualify For A Business Loan.  (1) Equity in Real Estate – we’ll utilize virtually any type and combination of real estate in any condition, and (2) Revenues – sufficient to support/afford the loan payments.  If we have these two, we can overcome just about any hurdle…

Process.  After I send the loan opportunity to our Intake Department, they’ll send me feedback on the real estate collateral, affordability, and any other considerations. On the same day or next, I’ll present potential loan structures to our Market Clearance team for guidance. Then you and I will discuss and decide what to Offer your Merchant Borrower. If accepted, then we’ll send the an authorization form and formally submit the loan.

Always Ask Merchant/Borrower If They Have Real Estate – What Real Estate Will Be Acceptable As Collateral?

My son went on his first date this weekend.  He and this girl have been going to school with each other for years. In fact, they were the lead roles in a school play back in grade school.  Anyway, they’ve been flirting for a while and he mustered up the courage to ask her to be his girlfriend…I guess he just walked up to her in school and asked.  She initially rejected the idea saying she just wanted to be friends, but the next day she reconsidered and asked him if the offer was still on the table.  The next thing ya know they’re going to a movie and getting Cane’s together.  I gotta say, it’s pretty cool…he’s way ahead of me when I was that age…I didn’t get up the courage to ask a girl out until my freshman year in college.  My wife and I did a good job…he’s got that right balance of humility, respect, and confidence. In fact, he’s beaming with confidence but why shouldn’t he be?  He’s bigger, stronger, faster, and smarter than I ever was.

Survey Results – Reasons An MCA Lender Declines A Merchant & WBL’s Ability To Overcome

I sent this survey only to my approved ISOs/Brokers. There were 43 responses to the question within a week or so. FYI, a few of the responses included reasons the MCA loan failed to fund, like the Merchant didn’t provide the requested documentation, but this implies the MCA was initially approved so it doesn’t really answer the question I was asking. 

Thanks to all who responded…here are the results in order of the most common responses:

1  Poor Cash Flow – not enough deposits/revenues in general or for a specific industry.

• WBL has a subsidy program to lower payments and an Interest Reserve program to use loan proceeds to cover the payments if necessary. Put another way, lack of cash flow DOES NOT RESTRICT WBL FROM LENDING.

2  Declining Deposits/Revenues. – three or more consecutive months of notable decline

• Although WBL would like an explanation why deposits/revenues are declining, as long as they are sufficient to support the debt, we’re still lending.  That is, a Merchant with declining deposits/revenues is PERFECT FOR WBL.

3  Defaults – too many on past loans.

• If there is equity in real estate and the Merchant can illustrate they can afford the payments, then defaults on other loans IS A CHALLENGE WBL CAN OVERCOME.

4  Stacked MCAs. – too many open MCAs; overleveraged

• WBL is not an MCA lender. Rather, we make loans to businesses securing real estate as collateral. That means we do not count in the stack of MCA loans. Moreover, having multiple MCA loans is a good thing for us because our ISO’s come to us to take out the MCA loans to lower the Merchant’s daily or weekly payments. Not only do we make a large loan to these Merchants, by paying off existing MCA debt we put the Merchant in a much stronger financial position, and, if needed, it makes more room for the ISO to make more loans.  So, STACKED MCA DEBT IS IDEAL FOR A WBL TAKEOUT!

5  Borrowers’ Picture On DL Too Ugly – no, this one isn’t real…it’s my way of sneaking in a little humor.

• DEAL-BREAKER? 😜

6  Low Credit Score, BKs, Foreclosures, & Judgements

• We’ve been known to lend on a Fico score as low as 470 and we’re more interested in the equity of the real estate collateral and the Merchant’s ability to afford the loan payments, so most of the time, this is NOT AN ISSUE FOR WBL.

7  Time In Business Too Short – for a new business or they haven’t been doing it long enough.

• As long as the Merchant has sufficient revenues to support the debt, the length of time in the business bears little weight.  For a start-up company, signed contracts for future revenue can be adequate to qualify and until the revenue is realized, we can put in place an Interest Reserve to cover payments.  So, time in business DOES NOT RESTRICT WBL FROM LENDING.

8  High Risk Industry – I don’t know what this means but there were a few responses.

• Simply put, WBL DOES NOT DISCRIMINATE BASED ON THE INDUSTRY.  There are some exceptions to this rule, for example, WBL does not lend to the cannabis industry or religious institutions.

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Resource Links, Process & Loan Intake Instructions

Appointment Link – Get On Phil’s Calendar.

White Label Marketing Flyers Using Your Logo & Contact Information.

Flyer For Independent Sales Organization – ISO — Phil Grossfield

Email the Loan Opportunity To Me.  Send me (1) an Application with all the Merchant/Borrower’s information including their mobile number and email address, (2) a full description of the real estate (download this Excel REO Schedule), and (3) a minimum 3-months business bank statements (6 months is better if you have it).

To Qualify For A Business Loan.  (1) Equity in Real Estate – we’ll utilize virtually any type and combination of real estate in any condition, and (2) Revenues – sufficient to support/afford the loan payments.  If we have these two, we can overcome just about any hurdle…

Process.  After I send the loan opportunity to our Intake Department, they’ll send me feedback on the real estate collateral, affordability, and any other considerations. On the same day or next, I’ll present potential loan structures to our Market Clearance team for guidance. Then you and I will discuss and decide what to Offer your Merchant Borrower. If accepted, then we’ll send the an authorization form and formally submit the loan.

Always Ask Merchant/Borrower If They Have Real Estate – What Real Estate Will Be Acceptable As Collateral?