The Profit TV Show Encounters ‘Merchant Loans’… Again
It’s become routine. The star of CNBC’s The Profit, Marcus Lemonis, once again encountered an alternative business financing company on the balance sheet of a prospective investment, this time described only as ‘merchant loans.’ Par-LA, a clothing store located on Santa Monica Boulevard in West Hollywood, does about $1 million a year in sales. The outstanding balance of these merchant loans at the time the show was filmed was $61,000.
A UCC search on the business’s legal name reveals one trace that they’ve indeed used a non-bank alternative, possibly even a merchant cash advance. ASSN Company in Springfield, IL, which filed a UCC against the business in June 2015, matches a name in our UCC code name database. It’s common these days for an alternative financial company to use a secured party masking service to prevent competitors from seeing who they are doing business with. And it works because even we don’t know for sure who funded them.
In the episode, Lemonis took a liking to the artistic abilities of company owner Patrick DiLascia and decided to invest $200,000 in return for 50% of the business. He adds a sweetener that says he’ll be willing to reduce his stake to 40% if DiLascia does the same and splits 20% of the remaining equity among his brother and sister who have already been working at the store for no pay.
Other businesses on the show revealed to have used merchant loans or merchant cash advances include:
FuelFood – Who Lemonis declined to work with
Da Lobsta – Who Lemonis declined to work with
Inkkas – Who Lemonis did a deal with
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.