Sean Murray: Okay, welcome back. It's Sean Murray here again at
deBanked TV at the SCAA show. I'm here today with Andrew
Altschuler from GRP Funding. Andrew, thanks for being here.
Andrew Altschuler: Oh, it's my pleasure. You know, it's it's a
great honor to be on the deBanked live. And thanks for
bringing your people down in
Sean Murray: Sure.
Andrew Altschuler: Yeah it's a great, great time a great show.
Sean Murray: So you're part of SCAA?
Andrew Altschuler: Yes.
Sean Murray: And you're part of the funding industry.
Andrew Altschuler: Correct.
Sean Murray: So what's your background in the funny
industry? You've been in it for a while, right?
Andrew Altschuler: Correct. So I started in the merchant
processing industry in 2002. And then late 2008, we were
introduced to a gentleman named Jim D'Alessandro at Advance Me,
and my colleague and I David Folden at the time, we said,
wow, so we can get the merchant account and the merchant cash
advance with all of this commission at the same time, and
we said let's do both. So that's kind of how the company evolved.
And that's how we got into the merchant cash advance business.
But I've always had a love for the merchant processing
business. And hence why I've stayed close to it and work as
on the advisory committee with the Southeast Acquirers. So I
love both industries, my bread and butter is you know the
merchant cash advance, and that's my, you know, my core
competency, but I've always loved the merchant processing
business. So and I love to help them out and come down and you
know, just just network and be part of this this space.
Sean Murray: Did you say 2002?
Andrew Altschuler: 2002, we started with a merchant
processing business. And then in 2000, I want to say like 2005,
2006, Advance Me was the gold standard in the space. And as
Jim D'Alessandro, as I mentioned, you know, introduced
us to it, and at the time, you well remember from your
background, the only way you could take a merchant cash
advance was you had to switch your merchant processing and
split the batch. And the company at the time that we worked with
was Cornerstone. And they were splitting the batch. So we got
introduced to Advance Me and we said, wow, we can get this cash
advance for a really nice commission, and we get the
merchant account as a byproduct. You know, the lights went off,
and we excuse me, the light bulb went off, rather, and we were
all in.
Wow, you've really seen the progression?
Yes.
Sean Murray: From like the very beginning, you started literally
in the payment side and watched the funding part, get added on
top of it.
Andrew Altschuler: Correct.
Sean Murray: And then evolve and now, do you feel like it ever
split away from each other or are they still like,
interconnected, in your opinion?
Andrew Altschuler: They have split away, as we know now,
probably like in the late 2008, 2010 timeline. Some really smart
people in the space said we don't need to just base it on
only their merchant processing volume, we can base it on their
overall gross volume. So it wasn't necessarily just having
to split the batch, we give the loan based on their gross sales,
right? And we take an ACH of a fixed amount out of their
account each night, and boom. And from that moment on, the
industry just went gangbusters. It was probably 10x. In the
numbers. It's probably even way more.
Sean Murray: Yeah.
Andrew Altschuler: Because now you had all these businesses
that didn't even take credit cards that you can lend to. And
that's when you know the light bulb went off with David and I
again and said, okay, now now we can go all in, we kind of just
put the merchant processing business on the side and said,
let's go all in with merchant cash advance.
Sean Murray: Sure.
Andrew Altschuler: Yeah.
Sean Murray: When did you come to GRP? When did you start
there?
Andrew Altschuler: So GRP, again, we were with we had
Capify, a merchant for many, many years. We're international,
in the UK and Australia. And then late 2016, 17, we sold that
US business to Capitas. And then a few years went by and I got
recruited by GRP Funding. They've been in the business
just as long as us out of Springfield, Massachusetts, and
I started with them in late 19. And I said, come on, guys, let's
go get it in the a minus b plus space. So I've been with them
since late 2019, which is kind of a unique time.
Sean Murray: Yeah.
Andrew Altschuler: Cause we started getting our bearings
together. And then boom, boom, the world fell apart in March of
2020. And we, you know, we were real cautious, and we took some
breaks in funding, but now that it seems to be, you know, kind
of dissipating, we're just going like gangbusters again.
Sean Murray: Okay, so, so GRP most people are familiar if
they've been into the business for a long time.
Andrew Altschuler: Yes, they are name brand.
Sean Murray: They are name brand. Yeah, I've known them
since they started pretty much they're like a stalwart of the
industry.
Andrew Altschuler: Yes. Right.
Sean Murray: And if I understand it correctly, you guys are ISO
only broker only.
Andrew Altschuler: Correct.
Sean Murray: Is that right, okay.
Andrew Altschuler: At this point, we don't have our own
direct in house sales group, which a lot of the ISOs like,
right cause you're not competing against yourself. Right. A deal
comes in as an ISO you send it in to us. Yeah from time to
time, you may be competing with another ISO, but you know you're
not competing with somebody sitting in our office in
Springfield, Mass, who may see that deal that an ISO is
competing on, it's just your deal as the ISO and we're gonna
put out an offer fast. And our operations department is quick
and smooth. And that's the model. It's pretty cool.
Sean Murray: Yeah. What have ISOs has been telling you? I
mean, you started you said late 2019.
Andrew Altschuler: Right.
Sean Murray: Right. So you come on board.
Andrew Altschuler: March March. What was it March 17? March 18.
Right the whole world.
Sean Murray: Whole world ended so were you in communication
with like, ISOs during that time?
Andrew Altschuler: Yeah, a lot ISOs. And you know this well,
you know, that a lot ISOs started doing different things,
right. A lot of them are getting into the PPP business, they were
starting to sell the well, I'm sorry, they were selling the PPE
business. Right, right.
Sean Murray: Yeah. They were selling the mask.
Andrew Altschuler: And I don't want to sell the . I don't want
to screw up my PP, PPE, personal protective equipment, they were
selling masks, and then a lot of them started getting into the
PPP business and selling the government, you know, the
bailout stuff. So a lot of those guys were doing that for a
while. And I spoke to somebody recently at the show here, and
they said, the PPP stuff, kept the lights on, right, it kept
the lights on, but they weren't gonna make a lot of money
because the commission's that they made on that stuff was low.
So there's a bunch of those guys were doing that for a while. And
they some guys were still funding and they kind of just,
you know, stayed alive. And now it's just going like gangbusters
because the app.
Sean Murray: Like what does like, what does that mean? Like
what's gangbusters now?
Andrew Altschuler: Okay, gangbusters is our applications
have doubled. You know, so far this year, our funding is
doubled, you know, and even.
Sean Murray: Funding doubled since the pandemic period or?
Andrew Altschuler: The funding doubled really, since, that's a
good, that's a good question on the timeline. So the funding
really doubled as this year started, you know, it's just
been getting higher and higher every month, as you know, like
Texas loosens their guidelines, right. And Mississippi looses
their guidelines. And Florida has always been a little looser.
So some of those states.
Sean Murray: If you can't, you can't tell it's pretty.
Andrew Altschuler: It's pretty loose down here we get to do
some of this stuff. Which is cool.
Sean Murray: Yeah.
Andrew Altschuler: Right. So those states started to come
back. And it's been losing this year, I think, really, in this
year, it's loosening. So when I say gangbusters, we're able to
we get that many more applications that many more
offers that that many made that much more funding.
Sean Murray: Yeah.
Andrew Altschuler: So it seems to become and some of it was the
essential businesses at first. And now it's getting to be you
know, everybody and the PPP money is running out, a lot of
these guys there's no more applications. My contacts at TD
Bank specifically said there's no more funding going out. So
now all these business owners, they're like, well, all the free
money is gone. And like the plating money, a lot of it now
like, okay, I need real money to out from my location to do my
parking lot. Whatever they're trying to do with the money they
gotta. They need the money to really sink back into their
business, not just to stay alive, or have fun with now they
gotta get serious.
Sean Murray: Yeah. So I mean, what do you think happens now
you say you've doubled or, you know, it's progressing upward?
Andrew Altschuler: Yeah.
Sean Murray: Are you envisioning that it's going to come back up
to possibly come back up? But do you think it could surpass where
it was like 2019? Like, is it gonna be like a people were
talking about recovery right now. And I think some people are
wondering, does that mean like, do we go back to the numbers we
had before? Or are there possibilities for it to go even
higher than it was before?
Andrew Altschuler: I think it goes back to the numbers from
before at a minimum, but I think it's gonna go even higher,
because the traditional banks are still tightening up, you
know, they're, they still have to protect themselves, cause the
fallout from their business, they still don't know, right, a
lot of it is still up in the air, right? The lending that a
lot of the traditional banks did, they're still nervous about
they don't know, because they're, they have so many
tentacles in different products, right? With mortgages and
commercial mortgages and residential mortgages. Right. So
I referenced TD before, they don't know what's gonna happen
to their mortgage department, they don't know what's gonna
happen to their commercial lending department, they have to
be careful. So they're actually hiring their standards for
typical regular commercial loans to businesses. So a lot of those
merchants are dropping, you know, a little bit down the
waterfall to guys like us. So I think that'll continue to
happen. Because in our space, we can jump back in because we know
what we're looking for TD or a bank, traditional bank may not
jump in so fast, because they're still in a wait and see mode.
They want to see how everything is else is going to shake out
because they don't want to be pregnant with all of these other
loans that may go bad on them. So I think that's the long way
around the answer to the question, but I think that guys
are gonna take our money because they have to re outfit they have
to reinvent themselves, these businesses to you know to get
back out there and compete.
Sean Murray: So you say you know what you're looking for? Well,
what what kind of paper cause everyone's tried to put it out
like letter grade, is it A paper, is it B paper, is it C
paper, what type of deals does GRP look for?
Andrew Altschuler: We I always like to categorize it as A minus
B plus stuff. So we like to see a guy in business for a year,
you know, as long as he's north of 500 and credit, you know, a
lot of people shake their heads said wow, that's that seems like
it's lower grade, but north of 500 in business for a year. Not
terribly poor bank statements with a lot of NSF, NSFs and, and
negatives and things like that. But that kind of stuff. That is
what we're typically what we're looking for. So I would
categorize it as anybody's watching and understand like A
minus B plus, now we're gonna go out probably 12 months, you
know, things like that, and we'll get some low buy rates in
the 120, or the 125, and we're getting aggressive also what
we're doing is we're also working with our ISOs if he says
I need this buy rate we'll adjust because we want to get
that relationship in and we want to really help them we have some
flexibility with our master lender. So that's I think that's
the space that we're in, you know, the 12 month A minus B
plus stuff.
Sean Murray: Are these daily payments, weekly payments, like?
Andrew Altschuler: We have both.
Sean Murray: Okay.
Andrew Altschuler: We have both we'll assess, you know, on the
underwriting process. And we'll put the offer out, let's say,
okay, you qualify for a daily or a weekly.
Sean Murray: Okay.
Andrew Altschuler: Right, because a lot of merchants.
Sean Murray: Is this is like an under this like an automated
thing, or you guys do manual underwriting? Is there like a,
is there like a computer in the back that's doing all the
decision?
Andrew Altschuler: Well, we do put it through the computer.
Sean Murray: Yeah.
Andrew Altschuler: And we'll scrape the bank statements, and
they'll put out a letter grade on it. So that'll kind of
dictate, you know, how long will go out, it'll dictate the buy
rate, it'll dictate a weekly or a daily payment. And then, you
know, the underwriters do eyeball and take a look. And
then the offer goes out, right? And then if somebody calls, and
needs an exception, We'll reevaluate it again and say,
okay, hey, we put out for 10 months, we can go to 12, or we
put out a 12 month and a one to two buy rate, okay, maybe we
need to bring it down to a one to one or a 120. So we can
adjust it. And that's the beauty of GRP funding is we're not so
massive, and it's not like this huge ship that you have to get
you know to make a change in any of our policies. It's not such a
massive move. Like we can huddle up, we get together the whole
team every Tuesday and Friday, and we chat about what's going
on, or we can move quick, you know, on our policies, as well
as on specific deals, right? It's not like, we have to go to
the CLO and then we got to go to the underwriting group. And we
have to, you know, talk to so many people to make a change,
it's on the fly.
Sean Murray: Sure.
Andrew Altschuler: And our Director of Operations looks at
a deal and says, okay, it's four here, I can do it, you know, he
can make exceptions. We want to try to keep it within our box.
But we all know, at some point you may have to hop out of the
box. But we're small enough, but experienced enough that we're
nimble.
Sean Murray: What about splits? You mentioned ACH, do you do
splits, still?
Andrew Altschuler: We still do splits. We still do splits.
Sean Murray: Does anyone use that term anymore?
Andrew Altschuler: Like old guys, like, it's not a split,
like.
Sean Murray: Yeah.
Andrew Altschuler: We still do them from time to time, because
there are merchants that want to use that but so infrequently,
that.
Sean Murray: Who's initiating that, is that something that the
that the broker is, I mean, how did that even come about?
Andrew Altschuler: It's usually there's an experienced broker
who's been around understands the split. And it's usually
based on the on the cash flow, right? If it's on the bank
statement, and if the cash and if they're like, on the line
with the credit or the score, or their they have like the online
with their NSFs or their negatives in the bank statement,
we could say, okay, let's use a split, because that'll make us
feel a little bit more comfortable with the collection.
So we'll offer somebody a split. And we do do them from time to
time. That's not really our bread and butter. Because even
operationally, it's a little harder to engage that, because
you gotta go to the processor, you gotta get them to sign off
on it, you gotta, you gotta wait a couple of days to see the
split. But to answer your question, we still do them from
time to time in the right spot. But we try not to where we don't
need to.
Sean Murray: Right, because I guess it could add to just
another layer, time layer component to it.
Andrew Altschuler: Right, we bring in another vendor, because
we're not a merchant processor.
Sean Murray: Right.
Andrew Altschuler: So we gotta bring somebody else into the
equation. And they have to, like, initiate it for us. So we
try because you know, the business, it's got to be done
fast. Otherwise, you can get run over by somebody else. So we'll
do them.
Sean Murray: Yeah. Are you hearing about any companies in
there that might have like a, like a, get funded button in
like their point of sale?
Andrew Altschuler: But as we're talking about, it's funny,
because I had dinner with a gentleman last night, he's a
pretty big ISO, and he wants to get into that space. He says, we
have all this data. And we want to push the button and get the
offer out. I said it's a great idea. Because companies like
Square are doing that all day long, right? Push the button and
the money comes. I said, you can push the button and get some
offers out as a general idea. But you know, we still have to
set up like a customer service or a sales group, because it's
money. So people do want to call in from time to time. But I
think that's the future, right. For groups like us, I think
it'll it'll get more commonplace. I think it'll get
out there. But you know groups are working on it. I think I
think it is the future. You know, I think some other
companies have like a shopping cart checkout and things like
that. So guys are doing it. But we're treading lightly on that.
At first, we want to kind of see what's some of these other guys
do. But to answer your question. I think it's I think it's a
valid way to do it.
Sean Murray: Yeah, for sure. I mean, I think it's a competitive
advantage.
Andrew Altschuler: Yeah.
Sean Murray: You know what I mean, like the fact that a
merchant can just press the button and you don't have to
cold call. You don't have to send them mail. They're just you
know, they're initiating that ample offer. I want to ask you
just one other question about salaries requires. What do you
think about you know, the turnout in the event so far?
Andrew Altschuler: I am blown away. I was like, last night, I
actually missed the opening reception because I was so wiped
out. I started eight in the morning, and you saw we we're
setting up setting up and running around running around
running.
Sean Murray: Yeah.
Andrew Altschuler: I was so wiped out. I had to go upstairs
and close my eyes for a few minutes. For a few minutes. I
didn't miss the whole thing. But I had to like take a break.
Sean Murray: Yeah.
Andrew Altschuler: Because the turnout I think the number is
like 700 or something like that, and I think, and we were very
much we're on the calls every week, we were like, are we gonna
be able to do it? Are we not gonna be able to do it and I'll
give credit to John McCormack. And some of the other guys, they
said, we're gonna do it, we're gonna go forward. And I said,
okay, you know, it's Florida, and people are just pent up and
they want to come.
Sean Murray: Yeah.
Andrew Altschuler: And we're gonna do it. So the turnout has
just been dynamite. And you know, these shows, it's similar
to deBanked. It's like an old family.
Sean Murray: Yeah.
Andrew Altschuler: See, you know, Greg walking by, hey, bud,
I see people walking by and I go friend.
Sean Murray: You planned that too.
Andrew Altschuler: So Greg, just walked by at 1034.
Sean Murray: Yeah.
Andrew Altschuler: Right. So it's like old family and you see
these people, you know, I'm forever especially being in the
business since 2002. So that's the cool aspect of it. And
people just pent up in their homes, wherever they are. You
know, I'll get on a plane from New Jersey and come to Fort
Myers, Florida.
Sean Murray: Yeah.
Andrew Altschuler: Not unlike yourself, right. Let's go to
Newark, and let's go to Florida. Okay, I'll do that.
Sean Murray: Yeah, that's, that's the spirit. I got into
it. And I assumed everyone was gonna be wearing that too.
Andrew Altschuler: Right.
Sean Murray: Yeah, I might have been a little too proactive.
Yeah, and we're getting into Florida.
Andrew Altschuler: Right. But they gave me a shirt. So I said,
Wow, this shirt you know looks pretty good.
Sean Murray: They gave you that one?
Andrew Altschuler: Cause everybody, if you noticed
everybody on the committee wears their shirt and the name tag
with my name spelled wrong, but like, that's okay.
Sean Murray: Yeah, don't ignore the name tag.
Andrew Altschuler: Just just look at Andrew.
Sean Murray: Okay, that's good.
Andrew Altschuler: Yeah. So back to your question. People are
just so excited to come down and see see each other and then
like, that's the beauty of the Southeast Acquirers, because you
know, the shows, right? You have like, dude, the ETA is the big
standard, and then you have Money. 2020. But it's, you know,
there's this huge, massive shows with like, like, 10s of 1000s of
people. But here, it's 700 people, you know each other. So
it's a lot more intimate.
Sean Murray: Yeah.
Andrew Altschuler: So that's what's cool about it.
Sean Murray: Do you think we'll have more funders come to these
shows in the future?
Andrew Altschuler: Yeah, I think they'll start coming back.
Because there are a handful that are here and myself. I come, you
know, with the SCA. But obviously, part of GRP I think
guys will start getting into it, and crossing over. Right? That's
what we've been talking about for a while, right, is we're
gonna have crossover, you guys wanted to come down and
represent merchant cash advance with the media? And they said,
okay, well, we have deBanked, I'll send some of my colleagues
from the Southeast Acquirers.
Sean Murray: Yeah.
Andrew Altschuler: And start representing merchant
processing, again, because I think there's just so many
really interconnected ways for those businesses. And we talked
about that right at the beginning, right, is that they
kind of like are cousins.
Sean Murray: Yeah.
Andrew Altschuler: And maybe they'll start getting back
together, because I just think, you know, all the cash advance
ISOs need to start looking at merchant processing again,
because it's such a great business. It really truly is.
Sean Murray: I agree. Well, Andrew, thank you very much for
being here. Appreciate your time.
Andrew Altschuler: My pleasure. Yeah.
Sean Murray: You know, we were talking earlier, I was talking
earlier with Johny about how the handshakes are. It used to be
more like hey how's it going, but now everyone's so desperate
for that human connection.
Andrew Altschuler: Right.
Sean Murray: And it's a lot more like.
Andrew Altschuler: So we're gonna get a big hug, right.
Sean Murray: We're gonna do a big.
Andrew Altschuler: A big hug for with the closing.
Sean Murray: Yeah.
Andrew Altschuler: One more thing I want to say before you
and I know each other for so many years, we worked across the
street, right? When you started over at MCC and I was in
Amerimerchant on Park Avenue South.
Sean Murray: Yeah.
Andrew Altschuler: At 32nd street. You know, you weren't
long after 2008, was that?
Sean Murray: As soon as the funding part started in the
industry, but you know, I started it was payments and MCA
at the same time. I did a lot of payments.
Andrew Altschuler: Was right with Stephen and he was they
were they were first with Synergy and right when.
Sean Murray: I was working out of their office, the Synergy
office in Queens.
Andrew Altschuler: Okay.
Sean Murray: That's when I started also.
Andrew Altschuler: Yeah, we were sending merchant processing
deals to Synergy. Cause synergy was splitting the batch. So we
know that each other a long time brother.
Sean Murray: Good times.
Andrew Altschuler: So we're ready for it.
Sean Murray: Okay, this is the official the official.
Andrew Altschuler: I'll give you a little kiss too.
Sean Murray: Okay, yeah.
Andrew Altschuler: Make sure you get that.
Sean Murray: Yeah, anything can happen on deBanked TV
apparently, yeah.