1 00:00:01.830 --> 00:00:04.740 Sean Murray: We're live, it's Sean Murray at deBanked TV. 2 00:00:04.770 --> 00:00:06.630 We're back here again on Monday. 3 00:00:07.230 --> 00:00:09.150 Johny Fernandez: I'm Johny Fernandez. It's good to be with 4 00:00:09.150 --> 00:00:12.750 you guys. Sean. Happy Monday. It's gonna be a great week. I'm 5 00:00:12.750 --> 00:00:16.230 excited for it. And we have some really big news coming up. You 6 00:00:16.230 --> 00:00:16.950 ready for this? 7 00:00:16.980 --> 00:00:18.090 Sean Murray: Okay, what's the big news? 8 00:00:18.120 --> 00:00:21.360 Johny Fernandez: So Velocity Capital Group has some big news. 9 00:00:21.750 --> 00:00:28.410 They shared with us something that is new to how the industry 10 00:00:28.530 --> 00:00:32.610 pays their employees. So Sean, take it away. 11 00:00:32.670 --> 00:00:35.471 Sean Murray: Brokers, brokers, how they pay brokers. Yeah, so 12 00:00:35.530 --> 00:00:38.856 we literally just put it up on the site, Velocity Capital 13 00:00:38.915 --> 00:00:42.125 Group, they are a funding company based on Long Island, 14 00:00:42.183 --> 00:00:45.977 small business funding. And they announced as of today, that they 15 00:00:46.036 --> 00:00:49.363 are now able to pay broker commissions using crypto. Wow. 16 00:00:49.421 --> 00:00:52.514 So crypto and MCA and Small Business Funding have all 17 00:00:52.573 --> 00:00:56.308 combined, Velocity Capital Group has announced that they are now 18 00:00:56.367 --> 00:00:58.410 able to pay commissions via crypto. 19 00:00:58.710 --> 00:01:02.040 Johny Fernandez: But let me ask you this. So how long is it 20 00:01:02.040 --> 00:01:07.680 gonna be for the brokers to get their commission? So they end 21 00:01:07.680 --> 00:01:11.700 the deal? Everything goes well, they have the commission with 22 00:01:11.700 --> 00:01:14.880 crypto, do you know the timeline of how long they have to wait 23 00:01:14.880 --> 00:01:16.260 for this commission? 24 00:01:16.920 --> 00:01:18.510 Sean Murray: Yeah, all right. So here, here's the whole thing, 25 00:01:18.510 --> 00:01:20.700 right? When you hear crypto and small business funding, 26 00:01:20.700 --> 00:01:23.400 everyone's like, oh, you know, combining crypto, it's not a 27 00:01:23.400 --> 00:01:26.010 Bitcoin play. Right? This whole thing isn't about like, you 28 00:01:26.010 --> 00:01:28.080 know, they're now somehow involved in Bitcoin for them 29 00:01:28.080 --> 00:01:30.630 it's all about the speed. You know, you're asking how long 30 00:01:30.630 --> 00:01:33.330 does it take to get a commission, normally in this 31 00:01:33.330 --> 00:01:36.270 industry getting a commission can be can be the end of the 32 00:01:36.270 --> 00:01:40.890 week, it can be next day, some people, you know, some funders 33 00:01:40.890 --> 00:01:44.190 will wire the commission to you same day, but there's like a 34 00:01:44.190 --> 00:01:49.290 wire fee attached, and so forth. And so what Velocity Capital is 35 00:01:49.290 --> 00:01:52.260 ultimately trying to achieve is that they can pay a commission 36 00:01:52.290 --> 00:01:56.550 instantaneously. So, instead of 24 hours. Instead of 24 hours. 37 00:01:56.550 --> 00:02:00.090 24 seconds. Yeah, yeah instead of instead of 24 hours, it could 38 00:02:00.090 --> 00:02:03.180 literally be 24 seconds, so so when I was talking to them about 39 00:02:03.180 --> 00:02:07.440 it, you know they they will essentially send your commission 40 00:02:07.440 --> 00:02:13.230 to your crypto wallet. And the idea isn't for the broker to be 41 00:02:13.230 --> 00:02:16.140 betting on Bitcoin or Ethereum and all that stuff, it's 42 00:02:16.170 --> 00:02:20.610 literally just about, it's about payment speed, they will, 43 00:02:20.760 --> 00:02:24.690 according to them, they can pay you in something like USD coins. 44 00:02:24.690 --> 00:02:27.900 So stablecoins are kind of their, their their method of 45 00:02:27.900 --> 00:02:30.960 transmission that that they prefer, their, they don't want 46 00:02:30.960 --> 00:02:34.080 the the counterparty to take exchange rate risk, you know 47 00:02:34.080 --> 00:02:38.100 what the price of Bitcoin is, or Ethereum is, from what they told 48 00:02:38.100 --> 00:02:41.220 me that they will actually use a stablecoin so that the amount 49 00:02:41.220 --> 00:02:43.890 you get is equal to the amount that you're supposed to get, 50 00:02:43.890 --> 00:02:45.660 right. Because if you're gonna get $1,000, commission, you 51 00:02:45.660 --> 00:02:48.630 don't want that commission to be $800, by the time that you get 52 00:02:48.630 --> 00:02:51.420 it, right. Or it would be great if it went up and you know, all 53 00:02:51.420 --> 00:02:54.630 of a sudden that that crypto is worth $1,200. But the entire 54 00:02:54.630 --> 00:02:57.150 idea is not to get involved in all of that, at least not from 55 00:02:57.150 --> 00:02:59.190 what they told me, they were telling me about if the 56 00:02:59.190 --> 00:03:01.890 commission is 1000 bucks, they want the broker to get 1000 57 00:03:01.890 --> 00:03:05.700 bucks, they'll use a stablecoin to make that happen. The broker 58 00:03:05.700 --> 00:03:08.730 can then convert that, that crypto, that stablecoin into 59 00:03:08.730 --> 00:03:11.700 whatever, whatever, whatever currency they want, it's 60 00:03:11.700 --> 00:03:15.600 probably gonna be dollars, right. But for them not to take 61 00:03:15.600 --> 00:03:18.030 this risk on Bitcoin. So they can still use the money however 62 00:03:18.030 --> 00:03:21.270 they want, but they're gonna get the money instantaneously. So 63 00:03:21.270 --> 00:03:22.860 they don't have to wait till the next day. They don't have to 64 00:03:22.860 --> 00:03:24.510 wait till the end of the week. They don't need to wait a few 65 00:03:24.510 --> 00:03:27.090 hours for the wire, there's no wire fee you know all the all 66 00:03:27.090 --> 00:03:29.730 the stuff that would normally go into it, gets taken out of the 67 00:03:29.880 --> 00:03:32.640 equation if they're looking at crypto from the standpoint of 68 00:03:32.970 --> 00:03:36.570 payment, the payment happening happening instantaneously. 69 00:03:36.570 --> 00:03:40.230 That's the whole allure for them and allure for a broker. And 70 00:03:41.190 --> 00:03:43.410 there's more than that too they said they can actually also fund 71 00:03:43.410 --> 00:03:47.670 a merchant using crypto as well. Wow. Yeah. The worlds changing. 72 00:03:47.730 --> 00:03:50.430 Yeah. And the way so I you know, when I asked about that, like, 73 00:03:50.430 --> 00:03:52.650 are you gonna fund a merchant in crypto, does that mean that to 74 00:03:52.650 --> 00:03:55.980 pay you back in crypto? And the answer was no. Okay. So 75 00:03:55.980 --> 00:03:57.870 everything else will be the same. Again, this is not a 76 00:03:57.870 --> 00:04:01.680 Bitcoin play. Yeah. For Velocity Capital Group. This is all about 77 00:04:01.890 --> 00:04:07.920 using crypto as the rails to just make payments faster. So 78 00:04:07.920 --> 00:04:10.290 when you tell a merchant you know, I can fund you same day I 79 00:04:10.290 --> 00:04:13.680 can fund you, you know, in 24 hours, I can fund you next day. 80 00:04:13.710 --> 00:04:16.290 You know, all that all that stuff that people say. Yeah. In 81 00:04:16.290 --> 00:04:18.810 you know in the Fintech modern Fintech world about how fast you 82 00:04:18.810 --> 00:04:22.950 can be, you probably cannot be as fast as a crypto transaction, 83 00:04:23.040 --> 00:04:25.440 typically, because even if you're wiring the merchant money 84 00:04:25.440 --> 00:04:28.560 the same day, it's gotta go to the accounting department. That 85 00:04:28.560 --> 00:04:31.650 request is gotta go to the bank, that bank might put it in the 86 00:04:31.650 --> 00:04:34.890 queue and a wire could actually take a few hours to go out. And 87 00:04:34.890 --> 00:04:37.260 then you're paying a wire fee. And then the and then the 88 00:04:37.290 --> 00:04:39.930 recipient is paying a wire fee too so two people are paying a 89 00:04:39.930 --> 00:04:43.410 wire fee. And that instant payment payment of a wire is 90 00:04:43.410 --> 00:04:47.340 actually taking a few hours to come together. Or as for them 91 00:04:47.370 --> 00:04:50.250 using crypto using a stablecoin. You can actually fund that 92 00:04:50.250 --> 00:04:53.550 merchant instantaneously send the money to their wallet, the 93 00:04:53.550 --> 00:04:57.180 merchant can then convert it to dollars, if they want to. They 94 00:04:57.210 --> 00:05:00.480 presumably will and I would imagine that they probably want 95 00:05:00.480 --> 00:05:03.030 the merchant to do that as well, to use the money for their 96 00:05:03.030 --> 00:05:05.400 business. You know, it's not supposed to be some type of like 97 00:05:05.400 --> 00:05:08.940 crypto play. But then everything else will be normal, they will 98 00:05:08.970 --> 00:05:11.220 continue to debit the merchant just like they otherwise 99 00:05:11.250 --> 00:05:14.400 normally would. In a normal transaction. This is just about 100 00:05:14.400 --> 00:05:17.760 putting the money in the hands of the merchant faster than than 101 00:05:18.060 --> 00:05:19.830 anything else can, can do it. 102 00:05:20.070 --> 00:05:23.820 Johny Fernandez: Wow, that's very interesting. And it's 103 00:05:23.820 --> 00:05:29.160 interesting to see the last year we've seen how crypto has 104 00:05:29.160 --> 00:05:32.910 changed, how things are done, whether it's with banks, whether 105 00:05:32.910 --> 00:05:36.030 it's with the industry, or whether it's with contracts of, 106 00:05:36.390 --> 00:05:41.700 you know, employees in the NFL, etc. It changed how things are 107 00:05:41.700 --> 00:05:42.030 done. 108 00:05:42.150 --> 00:05:46.530 Sean Murray: Yeah. And as far as like, exactly, and it made me 109 00:05:46.530 --> 00:05:50.340 think that they probably won't be the last to do it. Because 110 00:05:50.370 --> 00:05:54.090 one of the examples they gave was USD coin, which that's coin 111 00:05:54.090 --> 00:05:57.600 base's, stablecoin. So if you have an account on Coinbase, and 112 00:05:57.600 --> 00:06:01.590 Coinbase, is a publicly traded company now. You could literally 113 00:06:01.590 --> 00:06:04.470 get money in your Coinbase account, that's basically as 114 00:06:04.470 --> 00:06:07.680 good as cash at this point that you could turn that turn that 115 00:06:07.680 --> 00:06:11.580 around into dollars from Coinbase. Very easily. Yeah. So 116 00:06:11.610 --> 00:06:14.520 I think that other companies might look at this as an example 117 00:06:14.610 --> 00:06:18.630 of how a broker, you know, things that brokers might want, 118 00:06:19.050 --> 00:06:23.370 and use this methodology of payments, to get commissions out 119 00:06:23.370 --> 00:06:25.830 there faster than anyone else is doing. That's one of the big 120 00:06:25.860 --> 00:06:31.020 alures of crypto in general is it is using it as a payment 121 00:06:31.110 --> 00:06:34.980 mechanism, versus just investing in Bitcoin or Ethereum, or 122 00:06:34.980 --> 00:06:37.470 whatever, and hoping that the number goes up, there's actual 123 00:06:37.470 --> 00:06:40.950 value there, to how fast payments can be conducted. 124 00:06:40.950 --> 00:06:42.780 Johny Fernandez: Yeah, done. That's definitely one of the 125 00:06:42.780 --> 00:06:45.090 interesting points, because it's definitely gonna change just in 126 00:06:45.090 --> 00:06:50.220 general how people get paid. And then their views on whether they 127 00:06:50.250 --> 00:06:53.070 either want to stick with crypto and you know, want to use it 128 00:06:53.070 --> 00:06:57.450 further, for their personal, you know, sanity, or like how they 129 00:06:57.450 --> 00:07:00.720 want to use it, or they just want to cash out and just, you 130 00:07:00.720 --> 00:07:05.280 know, get paid instantly go to the bank. So give them options 131 00:07:05.280 --> 00:07:06.720 too which I think is interesting. 132 00:07:06.840 --> 00:07:10.500 Sean Murray: You know, I think we're gonna find out just how 133 00:07:10.500 --> 00:07:14.100 seductive it is as an option, because let's say you're a small 134 00:07:14.100 --> 00:07:16.440 business owner, and you're talking to three different 135 00:07:16.440 --> 00:07:19.500 companies. And they're all telling you about how they can 136 00:07:19.500 --> 00:07:22.830 fund you right away. Yeah. One says we're gonna send the ACH 137 00:07:22.830 --> 00:07:25.110 and you're gonna get it, get it in your account tomorrow. The 138 00:07:25.110 --> 00:07:27.090 other says, We're gonna wire you the punch today, and you'll have 139 00:07:27.090 --> 00:07:29.700 it by the end of the day. And you ever said I'm gonna, I'm 140 00:07:29.700 --> 00:07:33.270 gonna send you the money via crypto, it's gonna be USD coins 141 00:07:33.270 --> 00:07:35.130 it's gonna go straight to your Coinbase account. And it's going 142 00:07:35.130 --> 00:07:37.440 to be instant, literally instantaneous. Not end of the 143 00:07:37.440 --> 00:07:42.360 day. Not tomorrow. Right this second. Yeah. Right. And let's 144 00:07:42.360 --> 00:07:46.620 say that that small business owner can only choose one. And 145 00:07:46.620 --> 00:07:51.510 all else being equal, might they choose the fast like literally 146 00:07:51.510 --> 00:07:53.550 the one that's instantaneous that's what it's gonna come down 147 00:07:53.550 --> 00:07:59.100 to, is there, is there a value to it being that fast? Yeah. And 148 00:07:59.310 --> 00:08:02.100 then one of the risks that you have to take when someone tells 149 00:08:02.100 --> 00:08:04.350 you they can fund you tomorrow is that they don't. 150 00:08:04.650 --> 00:08:09.330 Johny Fernandez: Yeah. And, for example, like I work in a 151 00:08:09.330 --> 00:08:12.900 commission based job, too. So sometimes those checks, you have 152 00:08:12.900 --> 00:08:19.440 to wait, you know, 2, 3, 4 weeks. And that's if their, if 153 00:08:19.440 --> 00:08:22.200 that's if their ducks are in a row. So like you said, if you 154 00:08:22.200 --> 00:08:24.030 don't get funded tomorrow, if you don't get the money 155 00:08:24.030 --> 00:08:26.880 tomorrow, if you don't get the money, like a week or two, like 156 00:08:27.210 --> 00:08:30.900 you start panicking, cause it's like, wait a minute, when am I 157 00:08:30.900 --> 00:08:33.840 gonna get paid? Yeah. And that's a big question I feel like a lot 158 00:08:33.840 --> 00:08:38.070 of people in commission based jobs or like in sales jobs, or, 159 00:08:38.190 --> 00:08:40.350 you know, anything under that umbrella. That's the big 160 00:08:40.350 --> 00:08:43.950 question that they always ask is like, when am I gonna get paid? 161 00:08:43.980 --> 00:08:48.210 Like, I did the deal. Yeah. Everyone hopes it's tomorrow, 162 00:08:48.210 --> 00:08:48.690 but. 163 00:08:48.930 --> 00:08:51.150 Sean Murray: Yeah, then you wake up and the money's not there 164 00:08:51.180 --> 00:08:51.300 and. 165 00:08:51.300 --> 00:08:52.470 Johny Fernandez: You check your bank account every day 166 00:08:52.470 --> 00:08:54.490 Sean Murray: You check. Exactly. They know. So that's exactly 167 00:08:54.490 --> 00:08:57.220 what happens, right. Merchant wakes up, they check their bank 168 00:08:57.220 --> 00:09:01.780 account to find out if it came through. And if it didn't, you 169 00:09:01.780 --> 00:09:04.090 know, then they're, they're left wondering, you know, what 170 00:09:04.090 --> 00:09:06.550 happened? And then it can it could lead to a conversation of, 171 00:09:06.700 --> 00:09:10.060 well, accounting process, process it too late. Yeah. So 172 00:09:10.060 --> 00:09:13.150 it'll actually be the next day. Right? Or it was it was a 173 00:09:13.150 --> 00:09:17.230 Friday. So now you're not gonna see it technically till Monday. 174 00:09:17.260 --> 00:09:19.480 You know what I mean, because it's, it's it was the weekend or 175 00:09:19.480 --> 00:09:22.690 something. And you can kind of be left wondering whether or not 176 00:09:22.690 --> 00:09:25.300 these people are telling you the truth. Yeah. Because you might 177 00:09:25.300 --> 00:09:27.220 not know them. You might have found them online. It could be a 178 00:09:27.220 --> 00:09:30.070 broker you're speaking with over the phone. And you're just kind 179 00:09:30.070 --> 00:09:33.640 of you're kind of left wondering whereas this crypto transaction, 180 00:09:33.970 --> 00:09:36.100 it could be slightly inconvenient to get it in 181 00:09:36.100 --> 00:09:39.670 something like USD coin. Yeah. But the moneys there. But the 182 00:09:39.670 --> 00:09:42.250 money is there, you have the money. Yeah. Right. You have the 183 00:09:42.250 --> 00:09:44.350 money and if there's, there was something you were going to use 184 00:09:44.350 --> 00:09:46.600 the money for. And that person's wondering whether or not you 185 00:09:46.600 --> 00:09:50.620 have the money. It might not be in the in the form that they 186 00:09:50.620 --> 00:09:52.900 want it in. They might be like, I don't want your USD coin or 187 00:09:52.900 --> 00:09:56.500 whatever. Well, you could point to like an actual account and 188 00:09:56.500 --> 00:10:00.040 say, look, the money is there. Yeah. I'm gonna send it to you 189 00:10:00.130 --> 00:10:03.010 ,let me just convert it back into dollars. And you'll, and 190 00:10:03.010 --> 00:10:05.170 you'll have it and everything will be good. But if you show 191 00:10:05.170 --> 00:10:08.890 them an account that says, you know, $0 in it, or whatever, you 192 00:10:08.890 --> 00:10:10.450 know, whatever it is you were trying to do, you might not be 193 00:10:10.450 --> 00:10:13.390 able to accomplish. So there is value to being able to have that 194 00:10:13.390 --> 00:10:16.780 money, instantaneous. And I do recall from a long time ago, 195 00:10:16.780 --> 00:10:19.270 when I was a broker telling a merchant, congratulations, 196 00:10:19.390 --> 00:10:23.710 you've been, you know, you've been funded, and telling them 197 00:10:23.710 --> 00:10:27.550 that at like, two o'clock, and then praying. Yeah. That 198 00:10:27.580 --> 00:10:31.810 accounting was going to send out that ACH. before the deadline. 199 00:10:31.840 --> 00:10:36.370 Yeah. And oftentimes, maybe not often, sometimes, I would learn 200 00:10:36.370 --> 00:10:40.090 in the morning, unfortunately, accounting wasn't able to get it 201 00:10:40.090 --> 00:10:43.420 out. But don't but don't worry, it's gonna be the next day. And 202 00:10:43.420 --> 00:10:45.790 then, but you know, you've already started to lose some 203 00:10:45.790 --> 00:10:48.130 credibility with that customer, because you told them it was 204 00:10:48.130 --> 00:10:51.220 gonna be the next day. Yeah. That was how you sold it, next 205 00:10:51.220 --> 00:10:54.190 day funding, right in your account, your funded blah, blah, 206 00:10:54.190 --> 00:10:57.490 blah and they wake up and it's not there. And they start to you 207 00:10:57.490 --> 00:11:00.460 know a shred of doubt start to build about whether or not any 208 00:11:00.460 --> 00:11:02.410 of this is actually going to come true. You know what I mean, 209 00:11:02.410 --> 00:11:05.740 so the idea that you could put money into someone's hands 210 00:11:05.740 --> 00:11:10.330 instantaneous, I have a feeling. I have a feeling that Velocity 211 00:11:10.330 --> 00:11:12.520 Capital Group, and I'm not, I'm not touting them for any 212 00:11:12.520 --> 00:11:16.420 specific reason, you know what I mean? Like, this is just, this 213 00:11:16.420 --> 00:11:19.120 is just some news they shared with me, that I just find 214 00:11:19.120 --> 00:11:21.940 incredibly fascinating, because I feel like they're not going to 215 00:11:21.940 --> 00:11:27.310 be the last, once it's out there as an idea. And I think the, the 216 00:11:27.310 --> 00:11:32.440 concept of receiving crypto is a lot, a lot more easy for people 217 00:11:32.440 --> 00:11:35.800 to to digest and understand and participate in than it used to 218 00:11:35.800 --> 00:11:39.910 be. Because Coinbase is a public company. I'm using Coinbase for 219 00:11:39.910 --> 00:11:44.560 a reason. Yeah. Because you can accept USD coin on there so 220 00:11:44.560 --> 00:11:48.340 easily, right. And then you can convert it very easily. And so 221 00:11:48.340 --> 00:11:51.250 it's not stuck in some crypto wallet. Yeah. It's not stuck in 222 00:11:51.250 --> 00:11:54.400 some, like blockchain abyss of, you know, what do I do with 223 00:11:54.400 --> 00:11:56.980 this? You know, and Bitcoin and all this other stuff, it's just 224 00:11:56.980 --> 00:12:02.080 USD coin, it's worth exactly $1. And as long as that option 225 00:12:02.080 --> 00:12:05.830 exist, I feel that other companies will probably follow 226 00:12:05.830 --> 00:12:08.950 suit. And as to whether or not it becomes, you know, the 227 00:12:08.950 --> 00:12:12.310 dominant strain of getting paid. You know, I don't know that that 228 00:12:12.310 --> 00:12:14.800 will happen. Yeah. But I just imagine that Velocity Capital 229 00:12:14.800 --> 00:12:17.290 Group is just not not going to be the last. So things are on to 230 00:12:17.290 --> 00:12:17.800 something here. 231 00:12:17.850 --> 00:12:20.130 Johny Fernandez: Yeah. So very interesting to see what ends up 232 00:12:20.130 --> 00:12:22.020 happening. And we'll find out. 233 00:12:22.110 --> 00:12:24.150 Sean Murray: Yeah, we will, we will find out this is this is 234 00:12:24.150 --> 00:12:26.190 something that I'm going to check in with them on. Yeah. And 235 00:12:26.190 --> 00:12:27.420 see how many people were doing it. 236 00:12:27.420 --> 00:12:31.500 Johny Fernandez: Yeah, so cool. All right. So because of popular 237 00:12:31.500 --> 00:12:38.100 demand, we will be doing another lightning round. 238 00:12:38.340 --> 00:12:45.570 Sean Murray: Another lightning round. Okay. What else could 239 00:12:45.570 --> 00:12:47.790 there possibly be left to talk about? 240 00:12:48.420 --> 00:12:50.310 Johny Fernandez: I feel like we should have like some, some 241 00:12:50.310 --> 00:12:53.130 like, background clapping like lightning round. 242 00:12:53.130 --> 00:12:55.530 Sean Murray: Yeah, we should definitely. We got to, we got to 243 00:12:55.530 --> 00:12:56.880 add that in, yeah. 244 00:12:57.480 --> 00:12:59.970 Johny Fernandez: There's a couple of things. A couple of 245 00:12:59.970 --> 00:13:03.210 questions that we have that I think people watching this would 246 00:13:03.210 --> 00:13:05.430 want to know. Okay. So we're gonna start with the first 247 00:13:05.430 --> 00:13:09.120 question. What are monthly deposits? 248 00:13:10.740 --> 00:13:15.930 Sean Murray: What are monthly deposits? All right. So I'm 249 00:13:15.930 --> 00:13:20.190 assuming this question is something that is asked on like 250 00:13:20.220 --> 00:13:22.410 DailyFunder, or like a Facebook group. So what are monthly 251 00:13:22.410 --> 00:13:26.460 deposits? It's literally the amount, it's literally the 252 00:13:26.550 --> 00:13:30.810 number of deposits that go into a merchant's bank account, every 253 00:13:30.810 --> 00:13:36.270 month. It's a thing that comes up because it's, it's one of the 254 00:13:36.390 --> 00:13:39.240 factors that underwriters look at when they're evaluating a 255 00:13:39.240 --> 00:13:42.300 deal. They're looking at the total dollar amount that's 256 00:13:42.300 --> 00:13:45.480 deposited into an account, and they're looking at the frequency 257 00:13:45.480 --> 00:13:49.260 of those deposits. So if you're going to fund a small business, 258 00:13:49.260 --> 00:13:52.560 and you say, you know, what do they do in revenue per month, 259 00:13:52.590 --> 00:13:55.140 and that business tells you they do 100 grand in revenue per 260 00:13:55.140 --> 00:13:58.620 month, you're like, awesome, cool. But then you check the 261 00:13:58.620 --> 00:14:02.280 bank account, and you see that they're only depositing 20k per 262 00:14:02.280 --> 00:14:05.460 month. You're like, where's that other 80k? Yeah. I can't work 263 00:14:05.460 --> 00:14:07.650 with that 80k, cause I don't know where it's going, I can 264 00:14:07.650 --> 00:14:10.440 work with your monthly deposits. And we're going to use that as 265 00:14:10.440 --> 00:14:13.500 the basis for revenue. And whatever else you're generating, 266 00:14:13.500 --> 00:14:16.110 I don't know how easily I can use it, because it's not going 267 00:14:16.110 --> 00:14:19.320 to somewhere that I can easily grab from, right. So they're 268 00:14:19.320 --> 00:14:21.780 gonna look at your monthly deposits. And that number is 269 00:14:21.780 --> 00:14:24.630 gonna be a lot more important than whatever other revenue 270 00:14:24.630 --> 00:14:27.240 figure you're assigning to yourself. And then they're going 271 00:14:27.240 --> 00:14:30.630 to look at the frequency of deposits. And that's because if 272 00:14:30.630 --> 00:14:34.800 you're depositing 20k per month, but it's in one deposit, what 273 00:14:34.800 --> 00:14:37.290 happens if that one deposit doesn't happen for that month? 274 00:14:38.310 --> 00:14:40.650 What does that mean you're gonna have zero? You know and zero is 275 00:14:40.650 --> 00:14:43.500 gonna be deposited, and they're going to want to know, where if 276 00:14:43.500 --> 00:14:46.950 it's that infrequent. What is that coming from? Do you have 277 00:14:46.950 --> 00:14:51.270 one customer that pays you and if and if so how stable is that 278 00:14:51.270 --> 00:14:54.180 relationship? Right? So they're gonna look at the frequency of 279 00:14:54.180 --> 00:14:58.230 deposits, the more, the better. Yeah. If it's just one or two, 280 00:14:58.890 --> 00:15:01.410 you know, that's an even bigger risk, they might charge you 281 00:15:01.410 --> 00:15:04.290 more, or they might not do the deal at all. They like deals 282 00:15:04.290 --> 00:15:09.420 where there's a deposit every single day. Okay. Right. And so 283 00:15:09.420 --> 00:15:10.980 they're gonna look at the frequency of deposits, and 284 00:15:10.980 --> 00:15:13.170 they're going to look at the total amount of deposits. And 285 00:15:13.170 --> 00:15:15.330 that is going to be more important than any type of 286 00:15:15.330 --> 00:15:18.660 revenue figure that the business just says that it earns, because 287 00:15:18.840 --> 00:15:22.380 what comes into the bank account is kind of the final say, at the 288 00:15:22.380 --> 00:15:22.950 end of the day. 289 00:15:23.250 --> 00:15:28.560 Yeah. Wow, good to know. The next question we have, what are 290 00:15:28.560 --> 00:15:30.300 credits and debits? 291 00:15:32.160 --> 00:15:37.920 What are credits and debits? So credits and debits, if we're 292 00:15:37.920 --> 00:15:40.290 looking you know if we're talking about them in the world 293 00:15:40.290 --> 00:15:43.230 of accounting, they have very specific meanings. But I feel 294 00:15:43.230 --> 00:15:48.900 like that question was probably asked by someone who is talking 295 00:15:48.900 --> 00:15:51.450 again about this industry. So what are debits and credits when 296 00:15:51.450 --> 00:15:54.180 it comes to the small business finance industry? We're 297 00:15:54.180 --> 00:15:57.570 typically talking about credits that are coming into a bank 298 00:15:57.570 --> 00:16:00.930 account than debits that are coming, debits is money going 299 00:16:00.930 --> 00:16:04.620 out, so credits are are the deposits. That could be you 300 00:16:04.620 --> 00:16:08.580 know, somebody depositing a check, putting in cash, it could 301 00:16:08.580 --> 00:16:11.730 be an incoming wire transfer credits is basically any money 302 00:16:11.730 --> 00:16:14.730 coming in to a bank account, and debits or any money that's 303 00:16:14.760 --> 00:16:19.380 leaving the bank account, you'll often hear the phrase debiting a 304 00:16:19.380 --> 00:16:22.860 merchant, and what debiting a merchant means that the funding 305 00:16:22.860 --> 00:16:27.390 company will actually initiate a debit from their side that 306 00:16:27.390 --> 00:16:30.210 automatically pulls the funds they're entitled to from the 307 00:16:30.210 --> 00:16:32.850 merchant's account. So nothing is required on behalf of the 308 00:16:32.850 --> 00:16:36.750 merchant themselves. The funder can simply debit the money out 309 00:16:36.750 --> 00:16:39.870 of the account and pull it all on their own. So credits is 310 00:16:39.870 --> 00:16:43.080 money in, debits is money coming out, when you talk about 311 00:16:43.080 --> 00:16:44.910 debiting a merchant, you're talking about the ability to 312 00:16:44.910 --> 00:16:47.340 pull the money from the merchant out automatically. 313 00:16:49.170 --> 00:16:51.960 Johny Fernandez: The next question is what are aged leads? 314 00:16:52.620 --> 00:16:56.490 Sean Murray: What are aged leads? So a lead is somebody who 315 00:16:56.490 --> 00:17:00.300 is hopefully interested in the product that you're looking for, 316 00:17:00.330 --> 00:17:04.500 that you're offering and fits the profile of a potential 317 00:17:04.500 --> 00:17:08.280 customer, an aged lead is somebody who expressed an 318 00:17:08.280 --> 00:17:12.930 interest in the past. It isn't like a hot vibe lead, right? 319 00:17:13.170 --> 00:17:14.220 Johny Fernandez: Ages ago. 320 00:17:15.119 --> 00:17:17.969 Sean Murray: Ages ago, someone who applied ages ago or 321 00:17:17.969 --> 00:17:20.849 expressed interest ages ago. Good one, Johny. Yeah, where do 322 00:17:20.849 --> 00:17:21.929 you where do you come up with these? 323 00:17:22.650 --> 00:17:24.150 Johny Fernandez: The Dad joke encyclopedia. 324 00:17:25.710 --> 00:17:29.190 Sean Murray: Yeah, so an age an aged lead is a lead that has, 325 00:17:30.420 --> 00:17:32.820 you know, been around for some time as to whether or not that 326 00:17:32.820 --> 00:17:35.700 person, that applicant has already gotten funded or not, 327 00:17:36.000 --> 00:17:40.230 you know, that's probably un unknown, right? So if you're out 328 00:17:40.230 --> 00:17:43.080 there wondering whether or not an aged lead is, you know, is 329 00:17:43.080 --> 00:17:47.580 worth it. That's gonna be for you to decide you can evaluate 330 00:17:47.580 --> 00:17:50.730 it on what kind of lead it is, like, where did the lead come 331 00:17:50.730 --> 00:17:54.570 from? Was it was it is the lead aged, and it came from the 332 00:17:54.570 --> 00:17:57.900 internet, like somebody applied online, and 30 days later, now 333 00:17:57.900 --> 00:18:00.780 you're getting it, like a lot can happen in those 30 days. 334 00:18:01.560 --> 00:18:04.200 Aged leads could could could mean literally, like two years 335 00:18:04.200 --> 00:18:07.170 old, like they applied for funding two years ago. Yeah. 336 00:18:07.470 --> 00:18:11.280 And, but they fit the profile. And they were interested. Yeah. 337 00:18:11.370 --> 00:18:13.800 But you know, where they are now, two years later, probably a 338 00:18:13.800 --> 00:18:16.680 whole a whole lot different, but it's better than the phonebook, 339 00:18:16.800 --> 00:18:18.810 are there phone are there phone books anymore? Okay, it's better 340 00:18:18.810 --> 00:18:21.090 than cold calling. Every time I bring up the phone book, I 341 00:18:21.090 --> 00:18:23.430 always get made fun of it's better than cold calling right? 342 00:18:23.490 --> 00:18:26.100 Or google.com. Or google.com. You don't want to just 343 00:18:26.100 --> 00:18:29.820 google.com random people. Look that up. Yeah you know look that 344 00:18:29.820 --> 00:18:32.340 up it you'll know what we're talking about, but an aged lead 345 00:18:32.340 --> 00:18:36.570 is a lead that was a live lead at some point, but is now old. 346 00:18:37.530 --> 00:18:41.760 Johny Fernandez: Great. Next question is what is a, what is 347 00:18:41.760 --> 00:18:43.350 an LOC? 348 00:18:43.980 --> 00:18:44.850 Sean Murray: LOC. 349 00:18:44.880 --> 00:18:45.930 Johny Fernandez: Or LOC? 350 00:18:46.320 --> 00:18:50.010 Sean Murray: Okay, so LOC, if you see that that acronym 351 00:18:50.100 --> 00:18:52.650 anywhere online, it stands for line of credit. 352 00:18:55.080 --> 00:18:58.710 Johny Fernandez: Awesome. Next question, what is a daily 353 00:18:58.710 --> 00:18:59.910 average balance? 354 00:19:01.260 --> 00:19:05.340 Sean Murray: What is a daily average balance? So this comes 355 00:19:05.340 --> 00:19:09.690 up again in underwriting kind of like monthly deposits. So a 356 00:19:09.690 --> 00:19:13.470 daily average balance is a factor that underwriters used to 357 00:19:13.470 --> 00:19:17.580 gauge the cash flow of a business. Because if, if the 358 00:19:17.580 --> 00:19:21.420 success of the deal hinges upon pulling out a percentage of 359 00:19:21.420 --> 00:19:24.390 future receivables, then they're going to need to be able to keep 360 00:19:24.570 --> 00:19:28.050 cash in the bank in order for this all to work out. And so 361 00:19:28.050 --> 00:19:31.020 they're not only going to evaluate monthly deposits, and 362 00:19:31.020 --> 00:19:33.240 the frequency of deposits, but they're gonna look to see how 363 00:19:33.240 --> 00:19:35.670 much money ends up staying in the bank. And they're gonna look 364 00:19:35.670 --> 00:19:40.710 at it on on a sort of an average daily basis. It's cause you 365 00:19:40.710 --> 00:19:43.440 can't just have money in the account at the end of the month, 366 00:19:43.440 --> 00:19:46.890 but nothing in there for the other 29 days, right. So they're 367 00:19:46.890 --> 00:19:50.220 gonna look at look at on average, how much you keep in 368 00:19:50.220 --> 00:19:52.440 the bank account, and that's going to play a factor into an 369 00:19:52.440 --> 00:19:57.330 approval. Because if the if the if the goal is to debit, say 370 00:19:57.360 --> 00:20:02.550 $1,000 per week from the account, and the average daily 371 00:20:02.550 --> 00:20:06.240 ending balance is about 50 bucks, well, there's a high 372 00:20:06.240 --> 00:20:09.600 likelihood that we're going to head into either NSFs or 373 00:20:09.600 --> 00:20:13.350 overdrafts, and that funder may not be able to get their money, 374 00:20:13.500 --> 00:20:16.020 right. And it might be terms that are just, you know, that 375 00:20:16.020 --> 00:20:20.340 don't work for the merchant. So the average daily ending balance 376 00:20:20.370 --> 00:20:22.740 is something that underwriters look at to figure out whether or 377 00:20:22.740 --> 00:20:26.160 not the terms of the deal are compatible with the cash flow of 378 00:20:26.160 --> 00:20:26.790 the business. 379 00:20:27.810 --> 00:20:32.550 Johny Fernandez: Good to know. Last question is, what is a 380 00:20:32.550 --> 00:20:33.720 default file? 381 00:20:34.530 --> 00:20:40.200 Sean Murray: What is a default file? A default file is a is a 382 00:20:40.200 --> 00:20:45.360 merchant who has defaulted with somebody else means they took, 383 00:20:45.540 --> 00:20:49.740 they took a business loan and didn't pay it back. Or they used 384 00:20:49.740 --> 00:20:52.920 a merchant cash advance and ended up in some type of 385 00:20:52.950 --> 00:20:57.600 contract breach situation. Maybe there was litigation, maybe 386 00:20:57.600 --> 00:21:01.530 there was some type of, you know, settlement or something. 387 00:21:02.820 --> 00:21:07.320 But a default file is a is a is an applicant that has defaulted 388 00:21:07.380 --> 00:21:13.890 somewhere else. And that is among the highest risk factors 389 00:21:14.340 --> 00:21:17.280 that are out there, probably more so than, you know, the 390 00:21:17.280 --> 00:21:19.560 general ones like time in business and so forth. Because 391 00:21:19.620 --> 00:21:22.860 if you've already defaulted on a competitor, you know what's 392 00:21:22.860 --> 00:21:27.990 going to happen with your deal, right? Sometimes there's a good 393 00:21:27.990 --> 00:21:32.370 story behind why a file, why why a business defaulted? Maybe it 394 00:21:32.370 --> 00:21:36.330 was a you know stroke, a stroke of bad luck. Maybe there was a 395 00:21:36.330 --> 00:21:39.300 miscommunication. And maybe it was a long time ago, maybe it is 396 00:21:39.330 --> 00:21:42.030 maybe this was a default that happened five years ago. And 397 00:21:42.360 --> 00:21:46.170 this type of risk doesn't exist anymore, but a default file. 398 00:21:46.740 --> 00:21:49.680 Usually people will call a default file, because it 399 00:21:49.680 --> 00:21:53.850 definitely just distinguishes it from other regular type of high 400 00:21:53.850 --> 00:21:56.070 risk deals, you would call it you would call it a default 401 00:21:56.070 --> 00:21:56.550 file. 402 00:21:57.120 --> 00:21:59.970 Johny Fernandez: Cool. That's it. That's it. That's it for 403 00:21:59.970 --> 00:22:02.580 lightning round. Okay. Sean, I love these lightning round 404 00:22:02.610 --> 00:22:05.490 because you're informative, educational, well, that's like 405 00:22:05.490 --> 00:22:09.000 redundant, but you you get to show your knowledge. 406 00:22:10.470 --> 00:22:12.450 Sean Murray: Okay, well, I'm glad it's over. I always worry, 407 00:22:12.450 --> 00:22:14.580 I've always worried like, what you're gonna throw at me, and 408 00:22:14.580 --> 00:22:16.890 I'm not gonna know the answer to it, but I'm gonna do a little 409 00:22:16.890 --> 00:22:17.580 celebration now. 410 00:22:25.650 --> 00:22:28.050 Johny Fernandez: We're gonna wrap up. But if you want to 411 00:22:28.860 --> 00:22:31.440 check out the other lightning rounds that we have, you can 412 00:22:31.440 --> 00:22:35.010 check that out on deBanked.com. Or for other stories, you can 413 00:22:35.010 --> 00:22:38.610 also check out debanked.com or our social media platforms, 414 00:22:38.820 --> 00:22:43.290 LinkedIn, Twitter, Facebook, and Instagram. And just a reminder, 415 00:22:43.290 --> 00:22:46.020 if you haven't signed up for Broker Fair, you can definitely 416 00:22:46.020 --> 00:22:49.980 also do that. That's going to be going on December 6. It's going 417 00:22:49.980 --> 00:22:52.200 to be the best event in New York City. 418 00:22:52.200 --> 00:22:53.820 Sean Murray: Sponsors sold out already. 419 00:22:54.030 --> 00:22:55.080 Johny Fernandez: Sponsors are sold out. 420 00:22:55.080 --> 00:22:56.040 Sean Murray: But you can still buy a ticket. 421 00:22:56.070 --> 00:22:58.110 Johny Fernandez: Yeah, that'd be great. We expect to see you 422 00:22:58.110 --> 00:23:00.840 there. You get to see us. You're going to hang out with us. Eat 423 00:23:00.840 --> 00:23:05.670 pizza, bagels, anything. What's the most New York thing people 424 00:23:05.670 --> 00:23:09.030 can do when they're here? Eat pizzas from. 425 00:23:09.330 --> 00:23:11.670 Sean Murray: Yeah, yeah, have a pizza bagel, I guess. 426 00:23:11.700 --> 00:23:15.150 Johny Fernandez: Yeah. Well, and it's not going to be summertime 427 00:23:15.150 --> 00:23:16.710 so they can't get a Mr. Frosty 428 00:23:19.110 --> 00:23:19.680 Sean Murray: Darn. 429 00:23:19.710 --> 00:23:24.480 Darn. All right, well, that's all the time we have today. So 430 00:23:24.480 --> 00:23:26.880 we'll see you guys next time. Have a good one.