1
00:00:00.000 --> 00:00:02.280
Johny Fernandez: You know, for
people that are new and watching

2
00:00:02.280 --> 00:00:04.890
this for people that are new to
the business that started within

3
00:00:04.890 --> 00:00:07.050
the last year, you know, for
people that want to go back to

4
00:00:07.050 --> 00:00:10.050
the fundaments. So the
difference between a regular

5
00:00:10.050 --> 00:00:14.640
loan and MCA that makes an MCA
not a loan, what is the

6
00:00:14.640 --> 00:00:15.270
difference?

7
00:00:15.840 --> 00:00:17.220
Sean Murray: All right, so
there's, there's two things

8
00:00:17.220 --> 00:00:21.420
happening here, right? If I lend
you money, you have to pay it

9
00:00:21.420 --> 00:00:21.900
back.

10
00:00:21.930 --> 00:00:22.380
Johny Fernandez: Correct.

11
00:00:22.440 --> 00:00:24.870
Sean Murray: And presumably, for
the amount of time you have the

12
00:00:24.870 --> 00:00:28.200
money, an interest rate will be
accruing. Like, if I give you

13
00:00:28.200 --> 00:00:31.500
money today, and you pay it back
tomorrow, I might charge you

14
00:00:31.500 --> 00:00:34.080
minimal or nothing. Yeah. You
know what I mean, I might charge

15
00:00:34.080 --> 00:00:36.420
you a little bit because I'm
taking the risk of what I'm not

16
00:00:36.420 --> 00:00:39.120
getting paid back at all, so I'm
gonna charge you, they might

17
00:00:39.120 --> 00:00:41.400
charge you a little bit. But
then if I give you the money for

18
00:00:41.400 --> 00:00:44.370
like, 10 years, I'm going to
say, well, it was a big time

19
00:00:44.370 --> 00:00:47.520
value of money. Therefore, the
interest rate is gonna be this.

20
00:00:47.640 --> 00:00:50.670
And so I'm gonna get my money
plus 10 years worth of interest

21
00:00:50.730 --> 00:00:53.970
accrued. That's and it's
absolutely repayable. If you

22
00:00:53.970 --> 00:00:57.510
don't pay me back, I'm gonna
have recourse to go and get paid

23
00:00:57.510 --> 00:00:59.730
back you know what I mean, I
could report it to a credit

24
00:00:59.730 --> 00:01:03.960
bureau, I could potentially go
and pursue you using other

25
00:01:03.960 --> 00:01:06.630
means, you know take your assets
depending on what the nature of

26
00:01:06.630 --> 00:01:10.800
the agreement was. In a merchant
cash advance, there's no actual

27
00:01:10.800 --> 00:01:14.100
lending, or borrowing of money
taking place. These transactions

28
00:01:14.100 --> 00:01:17.070
can only happen between
businesses. This is a B2B

29
00:01:17.070 --> 00:01:21.840
transaction. This is a and this
is a type of factoring. A

30
00:01:21.870 --> 00:01:26.580
merchant cash advance provider
is buying the future revenues of

31
00:01:26.580 --> 00:01:30.570
a business, a fixed amount of
them, right, over no

32
00:01:30.570 --> 00:01:33.720
predetermined amount of time.
And if those revenues are not

33
00:01:33.720 --> 00:01:36.690
generated, well, the business
doesn't technically owe

34
00:01:36.690 --> 00:01:39.660
anything. It's not like I it's
not like they're lending the

35
00:01:39.660 --> 00:01:43.560
money, and then it's owed.
They're buying something. And

36
00:01:43.560 --> 00:01:46.830
then at that, those sales that
revenue doesn't materialize.

37
00:01:46.920 --> 00:01:49.290
Well, then they just they lose
out. They're taking a risk. They

38
00:01:49.290 --> 00:01:51.240
buy something if it doesn't
work, they're making a bet. You

39
00:01:51.240 --> 00:01:53.370
know what I mean? The bet
doesn't pan out, then that then

40
00:01:53.370 --> 00:01:55.290
that's it. It's not absolutely
repayable.