Author Topic: PSA: Don't swipe recklessly for others  (Read 338876 times)

Offline aro123

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Re: PSA: Don't swipe recklessly for others
« Reply #2520 on: February 25, 2019, 09:53:03 AM »
i didn't say it is the same.  i said that people always risk more than they can afford.  and all suppliers take risks. but people feel the need to make fun of people for taking this risk

Offline Dan

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Re: PSA: Don't swipe recklessly for others
« Reply #2521 on: February 25, 2019, 09:54:13 AM »
Making fun? Always risk more than they can afford?

What in the world are you talking about?

Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline aygart

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Re: PSA: Don't swipe recklessly for others
« Reply #2522 on: February 25, 2019, 10:07:26 AM »
i didn't say it is the same.  i said that people always risk more than they can afford.  and all suppliers take risks. but people feel the need to make fun of people for taking this risk
I would bet that most of these people don't even understand that they are risking anything
The thing with the hamster is that running on the wheel is actually what it is trying to do.

Offline stooges44

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Re: PSA: Don't swipe recklessly for others
« Reply #2523 on: February 25, 2019, 10:13:33 AM »
If it's not free shipping it's not worth it.

Offline cmey

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Re: PSA: Don't swipe recklessly for others
« Reply #2524 on: February 25, 2019, 10:18:58 AM »
I would bet that most of these people don't even understand that they are risking anything

They have no clue. I Know a guy who sold AA and had his account frozen. He told AA it was stolen. They wanted a police report so he filed one. For a measly grand worth of miles. People have no sense of the risks they take which are way out of proportion to the potential reward....

Offline gingyguy

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Re: PSA: Don't swipe recklessly for others
« Reply #2525 on: February 25, 2019, 10:20:09 AM »
I'm just glad none of this existed when I was 21.

Poor kid.  :'(
how do you explain the fellow who donated $890?
May you slide down the banister of happiness & get many splinters of success up your career.

Offline aygart

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Re: PSA: Don't swipe recklessly for others
« Reply #2526 on: February 25, 2019, 10:27:40 AM »
Oh. How I regret not learning Korean.
Google translate is much more fun.

Google translate is a משל הדיוט for the man of the reshoim. At the end it will taste like what you want but you need to first crush and grind it.
The thing with the hamster is that running on the wheel is actually what it is trying to do.

Offline eliteflyer

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Re: PSA: Don't swipe recklessly for others
« Reply #2527 on: February 25, 2019, 10:40:08 AM »
I am currently swiping for a company, in the 100-200k range.

What more can I do for due diligence?
I negotiate and represent clients on corporate finance lending transactions. This company clearly can't access the capital markets or loan markets (on a secured or unsecured basis), but you think you've correctly priced and underwritten (i) unsecured lines of credit, (ii) without appropriate contractual documentation on terms, including remedies, covenants, enforcement, maturity and (iii) which in any event probably materially violates the terms of the applicable credit card agreements, applicable merchant contracts and law? What you describe is not due diligence. It's sticking your head in the sand.

Offline cmey

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Re: PSA: Don't swipe recklessly for others
« Reply #2528 on: February 25, 2019, 10:50:59 AM »
I negotiate and represent clients on corporate finance lending transactions. This company clearly can't access the capital markets or loan markets (on a secured or unsecured basis), but you think you've correctly priced and underwritten (i) unsecured lines of credit, (ii) without appropriate contractual documentation on terms, including remedies, covenants, enforcement, maturity and (iii) which in any event probably materially violates the terms of the applicable credit card agreements, applicable merchant contracts and law? What you describe is not due diligence. It's sticking your head in the sand.

Pretty compelling, but are you making the case that there are no situations where a company would legitimately need to secure funding somewhere other than the capital or loan markets? A relatively recent startup etc. without extensive history or documentation may be on a fairly secure footing but unable to access traditional funding sources. It does not necessarily indicate a floundering company with a terrible balance sheet.

That being said there is a significant risk involved that is not even remotely being compensated.

Offline Aussie88

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Re: PSA: Don't swipe recklessly for others
« Reply #2529 on: February 25, 2019, 11:00:24 AM »
I negotiate and represent clients on corporate finance lending transactions. This company clearly can't access the capital markets or loan markets (on a secured or unsecured basis), but you think you've correctly priced and underwritten (i) unsecured lines of credit, (ii) without appropriate contractual documentation on terms, including remedies, covenants, enforcement, maturity and (iii) which in any event probably materially violates the terms of the applicable credit card agreements, applicable merchant contracts and law? What you describe is not due diligence. It's sticking your head in the sand.
Why is everyone always saying that if company needs to use credit cards it means they can't get loans or money elsewhere? For some companies, swiping credit cards is a free 30-45 day loan. Their vendor/supplier charges the same amount whether they pay by cash or credit, so why not use a credit card?
I'm obviously not talking about the companies that that are using them to swipe to themselves. That is 100% unsustainable and should raise lots of red flags. But to pay vendors direct? Why shouldn't the company get the extra time to pay for the goods and help with cash flow?
I'm NOT saying it should be done, but it's very different to companies swiping to themselves.

Online jj1000

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Re: PSA: Don't swipe recklessly for others
« Reply #2530 on: February 25, 2019, 11:02:01 AM »
Pretty compelling, but are you making the case that there are no situations where a company would legitimately need to secure funding somewhere other than the capital or loan markets? A relatively recent startup etc. without extensive history or documentation may be on a fairly secure footing but unable to access traditional funding sources. It does not necessarily indicate a floundering company with a terrible balance sheet.

That being said there is a significant risk involved that is not even remotely being compensated.
He is making the case that the user likely never even heard of steps i, ii, or iii yet he is loaning $100k every month.
See my 5 step program to your left <--

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Online ExGingi

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Re: PSA: Don't swipe recklessly for others
« Reply #2531 on: February 25, 2019, 11:06:53 AM »
Why is everyone always saying that if company needs to use credit cards it means they can't get loans or money elsewhere? For some companies, swiping credit cards is a free 30-45 day loan. Their vendor/supplier charges the same amount whether they pay by cash or credit, so why not use a their own credit card?
FTFY

And thereby lies the red flag.
I've been waiting over 5 years with bated breath for someone to say that!
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Offline sillypainter

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Re: PSA: Don't swipe recklessly for others
« Reply #2532 on: February 25, 2019, 11:08:02 AM »
Why is everyone always saying that if company needs to use credit cards it means they can't get loans or money elsewhere? For some companies, swiping credit cards is a free 30-45 day loan. Their vendor/supplier charges the same amount whether they pay by cash or credit, so why not use a credit card?
I'm obviously not talking about the companies that that are using them to swipe to themselves. That is 100% unsustainable and should raise lots of red flags. But to pay vendors direct? Why shouldn't the company get the extra time to pay for the goods and help with cash flow?
I'm NOT saying it should be done, but it's very different to companies swiping to themselves.

We are talking here of companies that swipe at their OWN place of busiiness with their own terminal, this is a RED flag immediately and you MUST stay away because they are paying mafia loan shark interest rates and if they still do it it means desperation. Swiping at a vendor is risky, but it isn't a right away red flag, that is normal if the business you lend to has a hard time getting credit.

Offline Dan

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Re: PSA: Don't swipe recklessly for others
« Reply #2533 on: February 25, 2019, 11:32:41 AM »
that is normal if the business you lend to has a hard time getting credit.
If they can't get credit from a bank, then why is it worth your risk to earn a measly 2%?
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline aro123

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Re: PSA: Don't swipe recklessly for others
« Reply #2534 on: February 25, 2019, 11:38:39 AM »
If they can't get credit from a bank, then why is it worth your risk to earn a measly 2%?
but no reason to assume buying groups can't get credit from a bank.  that is not why they need you