1 00:00:00.720 --> 00:00:02.190 Johny Fernandez: Hey, what's going on everyone? I'm Johny 2 00:00:02.190 --> 00:00:02.880 Fernandez. 3 00:00:02.910 --> 00:00:03.810 Sean Murray: And I'm Sean Murray. 4 00:00:03.870 --> 00:00:06.240 Johny Fernandez: And obviously, this is not your typical Monday, 5 00:00:06.240 --> 00:00:09.150 Wednesday. It's actually Friday. And we're here to talk about a 6 00:00:09.150 --> 00:00:11.880 couple of different topics, Sean, any big plans for the 7 00:00:11.880 --> 00:00:13.380 weekends first, let's talk about that. 8 00:00:13.440 --> 00:00:16.500 Sean Murray: Oh, man. Probably just enjoy the sunshine, you 9 00:00:16.500 --> 00:00:19.530 know, approaching Fourth of July. We're not there just yet. 10 00:00:19.530 --> 00:00:22.260 Yeah. But it feels like it's right around the corner. Because 11 00:00:22.260 --> 00:00:24.090 it is and I'm just looking forward to enjoying a nice 12 00:00:24.090 --> 00:00:24.510 weekend. 13 00:00:24.630 --> 00:00:26.460 Johny Fernandez: Nice. That's awesome. Same here. I'm gonna 14 00:00:26.460 --> 00:00:30.390 lay low. Just hang out in New York and enjoy the weather. It's 15 00:00:30.390 --> 00:00:34.350 great weather. It's not too hot this week. So that's great. It's 16 00:00:34.350 --> 00:00:37.350 just like the right amount of summer heat that we need. So 17 00:00:37.530 --> 00:00:43.890 it's I'm excited. I'm always excited. Yeah. It's my Friday on 18 00:00:43.890 --> 00:00:48.270 Wednesday. So Sean, let's talk about Mexico because I know this 19 00:00:48.270 --> 00:00:51.300 is something that recently popped up. We have a story out 20 00:00:51.450 --> 00:00:56.100 on debanked.com. But Mexico is small business lending, 21 00:00:56.130 --> 00:00:58.980 throwing. Yeah. You know, recently we found out that 22 00:00:59.010 --> 00:01:02.130 Credible Cousteau it's an an online small business lender 23 00:01:02.130 --> 00:01:06.000 acquired Bunco Fenterra for the and that's like one of the first 24 00:01:06.000 --> 00:01:09.720 times, you know, in Mexico that something of that nature has 25 00:01:09.720 --> 00:01:13.110 happened there has been acquired in the fintech world in Mexico 26 00:01:13.110 --> 00:01:17.880 specifically. Yeah. Sean, do you think that this is a good sign 27 00:01:17.880 --> 00:01:22.470 for, you know, Latin America and Mexico, that they will be moving 28 00:01:22.470 --> 00:01:25.110 forward, and they will continue to grow? Yeah. Talk a little bit 29 00:01:25.110 --> 00:01:25.650 about that. 30 00:01:26.040 --> 00:01:27.660 Sean Murray: So I don't know what it means for wider Latin 31 00:01:27.660 --> 00:01:30.510 America. I think for Mexico, it's a big sign, we put out a 32 00:01:30.510 --> 00:01:34.770 story about this about Credit Cousteau buying this bank, it 33 00:01:34.770 --> 00:01:37.770 was a Mexican bank. This is not like an American American bank, 34 00:01:37.920 --> 00:01:40.290 but they bought a bank. And I think that's significant, 35 00:01:40.290 --> 00:01:43.620 because it just goes to show that the relationship between 36 00:01:43.620 --> 00:01:47.010 alternative finance and traditional finance in Mexico is 37 00:01:47.010 --> 00:01:50.970 really coming together. Because in an undeveloped market, that 38 00:01:50.970 --> 00:01:54.030 type of that type of like communication, collaboration 39 00:01:54.090 --> 00:01:57.000 would not be happening. But there are alternative small 40 00:01:57.000 --> 00:02:00.090 business finance market has been progressing quite well. We've 41 00:02:00.120 --> 00:02:03.570 we've been engaged with some firms from that market at our 42 00:02:03.600 --> 00:02:06.480 even at our shows over the last few years. And we've been 43 00:02:06.480 --> 00:02:09.360 following along. They have they have merchant cash advance, in 44 00:02:09.360 --> 00:02:13.470 Mexico, they have small business lending in Mexico. And this is 45 00:02:13.470 --> 00:02:17.940 just the next step. The idea that one would acquire a bank is 46 00:02:17.940 --> 00:02:20.370 very similar to what has happened in the US. Yeah. I 47 00:02:20.370 --> 00:02:23.340 think they're just a couple years behind what has happened 48 00:02:23.340 --> 00:02:25.320 in the US. And I think it's something to keep an eye on. 49 00:02:26.010 --> 00:02:29.430 Particularly because in the announcement of that 50 00:02:29.430 --> 00:02:32.190 transaction, they did say that they have their eyes on the 51 00:02:32.190 --> 00:02:36.390 United States. Yeah. And the first part of it was they 52 00:02:36.390 --> 00:02:39.210 planned to fund a lot of businesses in Mexico that do 53 00:02:39.210 --> 00:02:42.030 business in the United States. But then they also said they are 54 00:02:42.030 --> 00:02:45.540 looking to get into into the US market. Yeah. And it seemed like 55 00:02:45.540 --> 00:02:48.720 that might be just a couple years away. Yeah. But I think 56 00:02:49.080 --> 00:02:52.170 it's important to recognize that, you know, we're in a 57 00:02:52.170 --> 00:02:56.640 global we're in a global market here. And I think, being an 58 00:02:56.640 --> 00:02:59.310 American, we like to think of, where can the Americans go to 59 00:02:59.310 --> 00:03:02.400 expand their footprint? Yeah. But we have companies from the 60 00:03:02.400 --> 00:03:06.180 UK, that are that are already operating here. Yep. And doing 61 00:03:06.180 --> 00:03:06.960 it pretty big. Like. 62 00:03:06.960 --> 00:03:08.220 Johny Fernandez: Yeah and we talked about that a couple of 63 00:03:08.220 --> 00:03:12.060 weeks ago, you know, that there UK based companies that already 64 00:03:12.060 --> 00:03:15.180 have that growth, and that they're expanding. And usually, 65 00:03:15.180 --> 00:03:17.880 I think, to jump off and piggyback off what you said that 66 00:03:17.880 --> 00:03:22.830 many times, we think like, oh, like, It's America, like we we 67 00:03:22.830 --> 00:03:25.890 run the show, you know, like San Francisco, New York. Yeah. 68 00:03:26.280 --> 00:03:30.960 Miami. But now like you say, like, you know, Ireland, London, 69 00:03:31.740 --> 00:03:35.160 Mexico, like they all want to come here and there. Yeah. 70 00:03:35.640 --> 00:03:39.120 Pretty much having some type of footprint here. And it's 71 00:03:39.210 --> 00:03:42.930 interesting to see how the global market will continue to 72 00:03:42.930 --> 00:03:43.350 grow. 73 00:03:43.410 --> 00:03:45.420 Sean Murray: Yeah, I mean, we do have we already have British 74 00:03:45.420 --> 00:03:47.670 companies who operate here in the Small Business Finance 75 00:03:47.670 --> 00:03:50.820 market, like Funding Circle, for example, is UK based. And they 76 00:03:50.820 --> 00:03:53.820 operate pretty heavily in the Small Business Finance market in 77 00:03:53.820 --> 00:03:57.060 the US. We have companies from Canada, who are expanding here. 78 00:03:57.090 --> 00:03:59.820 Yeah. We have companies from China who are expanding here. 79 00:04:00.000 --> 00:04:02.850 And, you know, I think we're going to see companies from 80 00:04:02.850 --> 00:04:05.910 Mexico expand here, too. And I think Americans tend to look 81 00:04:05.910 --> 00:04:08.850 outward. First, we look inward. Yeah. Because our market is so 82 00:04:08.850 --> 00:04:11.130 big, its a huge market, the American market, and then we 83 00:04:11.130 --> 00:04:14.970 look to expand our footprint elsewhere. But I think it's 84 00:04:14.970 --> 00:04:17.820 pretty clear by now that other companies look at our market as 85 00:04:17.820 --> 00:04:20.790 an as an opportunity to expand as well. And we could find 86 00:04:20.790 --> 00:04:22.830 ourselves probably within a short, you know a short amount 87 00:04:22.830 --> 00:04:25.920 of time where we have essentially Mexican owned 88 00:04:26.400 --> 00:04:29.430 financial firms providing capital to small businesses in 89 00:04:29.430 --> 00:04:33.000 the US. Yeah. It's all it's I mean, it's really making the 90 00:04:33.000 --> 00:04:35.520 North American market kind of like one more cohesive, kind of 91 00:04:35.520 --> 00:04:37.680 like. Yeah. You know what I mean, like, almost like a mini 92 00:04:37.680 --> 00:04:39.210 NAFTA type thing going on. 93 00:04:39.300 --> 00:04:41.310 Johny Fernandez: No for sure. Because we've seen like, and 94 00:04:41.310 --> 00:04:43.680 we've talked about it, you know, we've seen Canada we've seen the 95 00:04:43.710 --> 00:04:47.370 the US, now Mexico is getting involved, so pretty much it's 96 00:04:47.370 --> 00:04:48.120 just one. 97 00:04:48.600 --> 00:04:51.000 Sean Murray: One cohesive unit. Yeah. Yeah. And no there's 98 00:04:51.000 --> 00:04:53.790 cultural differences, but at the same time, there's enough that 99 00:04:54.090 --> 00:04:58.140 there's enough similarities, and there's that proximity is very 100 00:04:58.140 --> 00:05:01.500 helpful. And so I think we're going to see this blending of 101 00:05:01.500 --> 00:05:04.710 the markets. Especially, I mean, 10 years from now, let's say 10 102 00:05:04.710 --> 00:05:08.040 years from now. Yeah. I mean, I would I would think almost with 103 00:05:08.070 --> 00:05:10.830 100% certainty that there's going to be Mexican owned 104 00:05:10.830 --> 00:05:14.100 companies in the US, Canadian ones in the US, and then vice 105 00:05:14.130 --> 00:05:16.740 and then in reverse. There's going to be American companies 106 00:05:16.740 --> 00:05:19.500 who are who are funding in Mexico. Yeah. They're already 107 00:05:19.500 --> 00:05:21.660 doing it in Canada. And so we're just going to become one 108 00:05:21.660 --> 00:05:25.680 cohesive, you know, North American, like, body of free 109 00:05:25.680 --> 00:05:26.100 trade. 110 00:05:26.160 --> 00:05:28.860 Johny Fernandez: Yeah, exactly. And it's exciting to see what 111 00:05:28.890 --> 00:05:32.280 actually will end up happening. So the next topic of 112 00:05:32.280 --> 00:05:36.870 conversation is something that we've been talking about is the 113 00:05:36.870 --> 00:05:41.310 fact that MCA's are not loans. So Sean, let's talk about that, 114 00:05:41.310 --> 00:05:45.480 walk us through, you know, just the thought process and pretty 115 00:05:45.480 --> 00:05:49.530 much the basic fundamentals of MCAs, that they are not loans. 116 00:05:49.680 --> 00:05:51.720 Sean Murray: Okay. Well, I mean, the reason this even came up is 117 00:05:51.720 --> 00:05:54.120 because the New York State appellate court, New York, state 118 00:05:54.120 --> 00:05:56.670 appellate division of the Justice Department, issued a 119 00:05:56.670 --> 00:06:00.570 ruling recently in a merchant cash advance case, in which it 120 00:06:00.570 --> 00:06:03.300 had to determine whether or not the underlying agreement was 121 00:06:03.300 --> 00:06:06.660 actually a loan. And they turned around and said, This is not a 122 00:06:06.660 --> 00:06:10.260 loan. But this is kind of redundant. At this time. This 123 00:06:10.260 --> 00:06:13.350 wasn't actually like a ground ground groundbreaking decision. 124 00:06:13.530 --> 00:06:17.070 This was kind of repetitive of what they've been saying all 125 00:06:17.070 --> 00:06:20.670 along. And so I think, the real shocker in this coming out, it's 126 00:06:20.670 --> 00:06:23.430 on our website. Yeah. You can look it up on our website and 127 00:06:23.430 --> 00:06:26.250 find out the details of the case. debanked.com. debanked.com 128 00:06:27.120 --> 00:06:30.090 that will tell you which case tell you which case it is and 129 00:06:30.150 --> 00:06:32.970 you can go and look them up yourself all the details of the 130 00:06:32.970 --> 00:06:36.270 case. But the Court said in this merchant cash advance case, like 131 00:06:36.300 --> 00:06:40.560 the the MCA at hand was not absolutely repayable, it's not a 132 00:06:40.560 --> 00:06:42.330 loan. It's what they meant. It's what they've been saying all 133 00:06:42.330 --> 00:06:47.190 along. But I think what's kind of a curious is that the 134 00:06:47.190 --> 00:06:50.280 challenges are still being made. Why is the appellate court which 135 00:06:50.280 --> 00:06:53.130 is supposed to be it's supposed to be the end of the line 136 00:06:53.130 --> 00:06:56.160 supposed to be binding, you know I mean, that there should be no 137 00:06:56.160 --> 00:07:00.360 question on certain areas of the law. And it seems that whether 138 00:07:00.360 --> 00:07:05.130 MCAs are loans or not, keeps getting back on their desk for 139 00:07:05.130 --> 00:07:08.580 some reason, they keep telling people, this is not these are 140 00:07:08.580 --> 00:07:11.790 not loans. This is not a loan. And it just continues to 141 00:07:11.790 --> 00:07:14.400 reaffirm what everyone's been saying all along. But yeah, 142 00:07:14.400 --> 00:07:16.950 that's that's the reason why it came up. Yeah. It's because 143 00:07:16.950 --> 00:07:19.320 someone, again, made the claim, this was a loan. 144 00:07:19.350 --> 00:07:22.200 Johny Fernandez: So let's go to the basics, you know, for people 145 00:07:22.200 --> 00:07:25.020 that are new, and watching this for people that are new to the 146 00:07:25.020 --> 00:07:27.690 business that started within the last year, you know, for people 147 00:07:27.690 --> 00:07:30.210 that want to go back to the fundaments. So the difference 148 00:07:30.210 --> 00:07:35.130 between a regular loan, an MCA, that makes an MCA not a loan. 149 00:07:35.520 --> 00:07:36.570 What is the difference? 150 00:07:37.170 --> 00:07:38.520 Sean Murray: All right, so there's, there's two things 151 00:07:38.520 --> 00:07:42.750 happening here, right? If I lend you money, you have to pay it 152 00:07:42.750 --> 00:07:46.110 back. Correct. And presumably, for the amount of time you have 153 00:07:46.110 --> 00:07:49.500 the money, an interest rate will be accruing. Like if I give you 154 00:07:49.500 --> 00:07:52.800 money today, and you pay it back tomorrow, I might charge you 155 00:07:52.800 --> 00:07:55.470 minimal or nothing you know what I mean, I might charge you a 156 00:07:55.470 --> 00:07:58.080 little bit because I'm taking the risk of what I'm not getting 157 00:07:58.110 --> 00:08:00.660 paid back at all. So I'm gonna charge you, they might charge 158 00:08:00.660 --> 00:08:03.120 you a little bit. But then if I give you the money for like, 10 159 00:08:03.120 --> 00:08:06.000 years, I'm going to say, well, it was a big time value of 160 00:08:06.000 --> 00:08:09.480 money. Therefore, the interest rate is going to be this. And so 161 00:08:09.510 --> 00:08:12.000 I'm going to get my money plus 10 years worth of interest 162 00:08:12.030 --> 00:08:15.270 accrued. That's and it's absolutely repayable, if you 163 00:08:15.270 --> 00:08:18.810 don't pay me back, I'm gonna have recourse to go and get paid 164 00:08:18.810 --> 00:08:21.030 back you know what I mean, I could report it to a credit 165 00:08:21.030 --> 00:08:25.260 bureau, I could potentially go and pursue you using other 166 00:08:25.260 --> 00:08:27.390 means, you know, take your assets, depending on what the 167 00:08:27.390 --> 00:08:31.560 nature of the agreement was. In a merchant cash advance, there's 168 00:08:31.560 --> 00:08:34.800 no actual lending, or borrowing of money taking place. These 169 00:08:34.800 --> 00:08:37.920 transactions can only happen between businesses. This is a 170 00:08:37.920 --> 00:08:43.140 B2B transaction. This is the this is a type of factoring. A 171 00:08:43.170 --> 00:08:47.880 merchant cash advance provider is buying the future revenues of 172 00:08:47.880 --> 00:08:51.900 a business, a fixed amount of them, right, over no 173 00:08:51.900 --> 00:08:55.020 predetermined amount of time. And if those revenues are not 174 00:08:55.020 --> 00:08:57.990 generated, well the business doesn't technically owe 175 00:08:57.990 --> 00:09:00.960 anything, it's not like I it's not like they're lending the 176 00:09:00.960 --> 00:09:04.860 money, and then it's owed. They're buying something. And 177 00:09:04.860 --> 00:09:08.130 then at that those sales that revenue doesn't materialize, 178 00:09:08.220 --> 00:09:10.620 well, then they just they lose out, they're taking a risk. They 179 00:09:10.620 --> 00:09:12.540 buy something if it doesn't work, they're making a bet, you 180 00:09:12.540 --> 00:09:14.700 know what I mean? The bet doesn't pan out, then that then 181 00:09:14.700 --> 00:09:16.800 that's it theres its just not absolutely repayable. 182 00:09:16.840 --> 00:09:19.420 Johny Fernandez: Gotcha. So that's really, that's really 183 00:09:19.420 --> 00:09:22.870 good to know. And it will be interesting to see again, you 184 00:09:22.870 --> 00:09:27.700 know, as time goes on, this is an ongoing topic conversation 185 00:09:27.700 --> 00:09:31.390 that again, people just have different views on it at the end 186 00:09:31.390 --> 00:09:34.330 of the day. We know and we know that, you know, MCAs are not a 187 00:09:34.330 --> 00:09:36.490 loan, but people other people question it, so it will be 188 00:09:36.490 --> 00:09:39.670 interesting to see, you know, what ends up happening. And 189 00:09:39.670 --> 00:09:43.390 again, when you know in a couple of years, this will probably pop 190 00:09:43.390 --> 00:09:47.050 up again and. Yes. Be sent to the appellate courts. Yeah. I do 191 00:09:47.050 --> 00:09:50.020 have a joke for you though. Okay. You know, how you said its 192 00:09:50.020 --> 00:09:53.650 a B2B transaction. Maybe some people need to see their way 193 00:09:53.650 --> 00:09:55.480 out, you know, like ABC. 194 00:09:56.680 --> 00:09:58.150 Sean Murray: I think this is where we end the show. 195 00:10:00.670 --> 00:10:04.300 Johny Fernandez: That was a good one. So of course. 196 00:10:04.330 --> 00:10:05.950 Sean Murray: I think you need to recharge those batteries over 197 00:10:05.950 --> 00:10:08.500 the weekend. Yeah, I don't know. That was one of your weaker 198 00:10:08.500 --> 00:10:08.740 ones. 199 00:10:10.390 --> 00:10:12.580 Johny Fernandez: It's a B2B transaction. You know, you don't 200 00:10:12.580 --> 00:10:12.940 need to. 201 00:10:13.300 --> 00:10:14.740 Sean Murray: You don't need to rehash it, it's not gonna make 202 00:10:14.740 --> 00:10:16.870 it better. If you say it again, it's not gonna make the joke 203 00:10:16.870 --> 00:10:17.800 better. Yeah. 204 00:10:17.830 --> 00:10:19.600 Johny Fernandez: What do I like say it with a different tone 205 00:10:19.600 --> 00:10:23.440 like B2B transaction, they need to C their way out, no? 206 00:10:23.490 --> 00:10:25.590 Sean Murray: I think this is Johny Fernandez's, last show. 207 00:10:27.600 --> 00:10:30.240 Johny Fernandez: No, I'll be back next week. But what I will 208 00:10:30.240 --> 00:10:32.520 say if you want to follow us on our different social media 209 00:10:32.520 --> 00:10:35.850 platforms, you can check us out we have an Instagram, Twitter, 210 00:10:35.850 --> 00:10:39.960 LinkedIn, and Facebook and of course debanked.com that is 211 00:10:39.960 --> 00:10:45.570 pretty much the main home base, the our baby, and you can check 212 00:10:45.570 --> 00:10:49.350 out all the information stories, different videos that we've 213 00:10:49.350 --> 00:10:52.770 done, and of course, events that are coming up Broker Fair, we're 214 00:10:52.800 --> 00:10:55.410 very excited about that. If you haven't signed up for that, you 215 00:10:55.410 --> 00:10:59.940 can check that out. Check that out online. And of course any 216 00:10:59.940 --> 00:11:03.630 updates regarding Broker Fair, you can see that on your page 217 00:11:03.630 --> 00:11:07.140 right now on your home screen. So, Sean, that's it for today. 218 00:11:07.350 --> 00:11:08.970 Sean Murray: We will see our way out. 219 00:11:09.780 --> 00:11:11.040 Johny Fernandez: I'm Johny Fernandez. 220 00:11:11.130 --> 00:11:11.820 Sean Murray: I'm Sean Murray. 221 00:11:11.820 --> 00:11:13.380 Johny Fernandez: And we'll see ya later.