Sean Murray: Today we were having some audio issues.
Hopefully they're being resolved. Our production team
will let us know if it's not working. We don't have earpieces
that we wear so we have no idea what is coming out like in real
time. And so sometimes the production team will come in and
say, sorry, guys, that's a cut. We had some issues. So we just
restarted and we're back. It's exciting. I'm Sean Murray.
Johny Fernandez: I'm Johny Fernandez. Thank you guys for
tuning back in with us. So we're gonna jump into the conversation
that we were having regarding Canada's market so that we had
just started and then
Sean Murray: Start it over from the beginning Johny.
Johny Fernandez: Alright, so Canada's alternative finance
space has started 2022 with a bang. We know that Canadian
lending, they saw billions of dollars in growth, the industry
hopes to utilize FinTech technology and the government's
new take on open banking to bring the industry back into
full swing. So Canada's new banking plan, the new take, they
want to modernize the Canadian financial regulation regulatory
system, with open banking and fintech in mind. So what I was
saying earlier was that my takeaway from all that is that
in Canada, they're using the lending space in FinTech,
they're really trying to merge it all together, to pretty much
kill two birds with one stone. So they want to make they want
to see the growth, they want to see kind of everything, go back
to normal, but they're not just sticking with lending
specifically, they're also bringing in the FinTech aspect
of it and kind of saying, Hey, we're gonna do both, you know,
and kill two birds with one stone, you know, see this
industry grow, and then also make their worth and what they
offer to the public. You know, they can offer more. So that was
my takeaway. Sean, let's get your thoughts. What do you
think?
Sean Murray: So similar to you. So what's unique about Canada is
that during during the the early years, early years, it has been
years early years of the pandemic, right, early years of
the pandemic is that the Canadian regulatory or system or
the government wasn't exactly friendly with FinTech and being
part of the government response to what was happening on the
ground. In the US, the FinTech companies partnered up with the
government to help administer PPP. In Canada, that didn't
happen. Government's like, we don't have time for experiments,
we're going to handle this ourselves. And the FinTech
companies are like, Hey, how can how can you know you? How can
you take that approach? We have such big adoption with FinTech,
our customers know us, they would trust us to get the
financial aid from, you know, from us as it is we have the
tools we have, we have the interface, all that other stuff.
And they felt like they were shut out. But since then, the
government's kind of woken up to the fact that Fintech is already
a big part of the economy, and Canada, and now that now they
are trying to merge everything together to say, Okay, we
recognize the value of FinTech, how do we how do we adopt it?
Like a national level?
Johny Fernandez: Yeah, it is interesting, because something
that we that I was able to read up on, was that there, there are
certain numbers that are coming out. And there's been
significant growth by two Canadian lenders, that they're
acting both as a financial management tool and a lending
source. So again, they're merging, you know, the FinTech
and the lending all together to really, you know, it's back
bring the market back. I know, like, I know, when we
specifically spoke with a lot of Canadians in the, in the earlier
years, and, you know, just us talking about Canada, there was,
you know, 2020 20 and 2021. There was always a lot of
question mark, what, like, what was going on up there? How,
like, was it is everything okay? Because everything was, you
know, we were going through what we were going through, and now
seeing that they're coming back strong does bring, you know, a
sigh of relief, I think for everyone, because not only for
us, because we know that our Canadian Viewers also, you know,
they like us, they they want to join be a part of us. You know,
we've had events there. So people know us, but I think it's
awesome that there is this strong feeling that the market
will come the market is back there. So do you think let me
ask you this? Do you think that them merging the two? The
crossover itself of fintech I mean, it's we've covered it here
before, but do you think that it's going to be beneficial for
them long term?
Sean Murray: I think everyone benefits from the crossover
between FinTech and lending long term, no matter what doesn't
matter where you are. There's always going to be, there's
always going to be a demographic in the market that wants to do
things in a very manual manner, because they want to talk to
somebody and they're not totally comfortable with doing it
completely online and automated. And we always say it's younger
people and older people. And once all the you know, all the
old people are gone. Hey, well then we'll never need. We'll
never need the manual products anymore. That's just not true.
Plenty of young people For like yourself, who would prefer to
talk to somebody, there's always going to be a need for that. But
you have to, you have to fold FinTech into lending, no matter
what, because you just you get a more efficient market. Yeah. And
that's ultimately, that's ultimately beneficial to
everyone, especially in a national crisis, like a
pandemic, when it comes to implementing a response. You
want all the best tools that your disposal to accurately
identify who who needs to help. Yeah, provide the help, you
know, confirm that the ones that wanted to help are the ones that
got it, because there's a lot of fraud and stuff. And so if
anything, if anything, what we learned from the US market, that
perhaps Canada is, you know, kind of proud of themselves,
that we had so much fraud, by, by having so many people
administer government programs, right. And so even though so
many people got help that otherwise wouldn't have, there
were a lot of shortcomings in that. But I think additional
tech will help fill that gap. I think Canada recognizes that and
we'll continue to see them implement more FinTech in their
in their lending infrastructure.
Johny Fernandez: Let me ask you this. Do you think, you know,
obviously, the pandemic had a huge role in you know, these,
this merger kind of happening? Do you think if it wasn't for
that they would be up to speed in merging the two together? If
it wasn't for the, for the pandemic? You're not an expert?
No, I just like for your for your opinion purposes?
Sean Murray: Well, I you know, I wouldn't I'm not an expert on
the Canadian market. But I like to say, like to say that I do
talk to experts in that market who kind of you are you are I
consult I consult the experts. Yeah, in the Canadian market.
And FinTech recognition of FinTech has had already been
slower in Canada than it was in the US. Canada is a little bit
more conservative than the US in a lot of different respects.
Yeah. And there was already kind of just a very slow delay from
the government. In acknowledging the benefits of FinTech even as
their own residents adopted it. It's like the residents are all
about it. Yeah, I mean, over time, but the government's still
like, not hasn't hadn't caught up to what its own populace was
already into.
Johny Fernandez: Yeah, no, that's interesting. Well, I'm
honestly, I've been to Canada, a handful of times, specifically,
two times
Sean Murray: Nice.
Johny Fernandez: Not for debanked purposes, but just
yeah, like family that lives out there. Okay. One family member
was Toronto, Toronto, okay. But I've always asked you about
Canada. I'm like, when are we gonna go to Canada? Like, that's
like the, I think was like one of the one questions I've yeah,
I've asked you, like, Canada, Canada, Canada, and I'm, I'm
genuinely excited to see what's going to happen because I'm
excited to like, go to Canada and talk to like, everyone in I
hate the phone, you know, me, I'm in person, and just really
see the difference. Cause I remember in Broker Fair, I was
able to speak with some Canadians that came down for
Broker Fair, and they were just sharing with me that the amount
of differences that happen, you know, in the US and in Canada,
like it's, there's massive differences. So obviously, just
to see how things work out there, like what's going on out
there like just, I always get blown away cuz I like to compare
and contrast like, I'm a nerd, so Alright, well, yeah.
Next time you're up there, bring your checklist and figure out
what's the same and what's different. We can make a game
out of it.
Also, I speak French I speak very basic French. So French,
Canadian, you know, I can I can. I just know two sentences.
Sean Murray: Okay. That's, that's less than very basic.
Johny Fernandez: It's extremely basic. Yeah. But anyways, I'll
be. It'll be excited to be out there. And yeah, I'm just
excited to see what's going on in that market, honestly, so I
also have an interest in other parts of the world and see how
those markets work too. I just want to take over the world.
Yeah, clearly. Yeah. Afterwards, Johnny will be plotting his
vacation, I guess. Across the world.
Remember what I said last year, we're already at the weekend.
It's Wednesday. So I mean, at this point, you know, we're at
the weekend, I can plan my trips out and yeah, anyways, all
right. The next topic of conversation very interesting,
cause I read this all over Twitter this morning. And then I
looked online, and it was like the number one topic. And we've
talked about it here before and there was a lot of, we had a lot
of dialogue about this. Inflation rises 7% Over the last
year, the highest it's been since 1982. I'm not gonna say
how old I was in 1982. I don't know how old you were in 1982. I
wasn't born. I wasn't born either 1982. Sean, what does
that do? Seeing these numbers go up and up? What does that do for
our industry?
Sean Murray: Alright, so it's a lot more than just like you know
an economic statistic or something that affects
Mainstreet, I think a lot of people look at it and use it as
just a gauge for where the economy is. Yeah. Right. But it
actually has real world implications, especially in the
world of lending. In fact, it has more implications in the
world of lending possibly than any anything else. Yeah. Because
if you know, if your purchasing power is being reduced, so
significantly, by inflation, then you need to stay ahead of
the curve, you need to earn, you need to earn money to stay ahead
of inflation. First of all, if you meet inflation, you broke
even, you might think that you made money, but you didn't,
because your purchasing power is the same. So when you hear 7%
over a year, that's a really high number. That's, that's
extremely high. Because there's a lot of lenders out there who
go in with the mindset of, we're going to help the customer and
charge really low rates, right. And that's, that's a, that's a
great mindset.
Johny Fernandez: But if you're charging really low rates, when
inflation is that high, there, and this is just, you know,
basic economic math, yeah, from like, in my mind. So if you're
charging them something, you know, that is a low rate,
technically, it's not low, because the inflation is so
high.
Sean Murray: So it's alright, so here's how here's how it works.
Break it, break it down for those Okay, yeah. So, charge
charging a low low rate as a lender is now a lot more
detrimental than it used to be. Cause if you lend out $100, and
you get $107, back at the end of the year, your game is 7%.
Right? You know, not bad. Yeah. Right. If you put it in a
savings account, you would have made like 0%, essentially, so
hey, I made 7%, on my money, I made $7, on my 100. The problem
is, according to inflation, you didn't make anything, your
purchasing power remained the same. So you're at breakeven
point. So you didn't actually grow anything, you just kept up
with the level of cost, right? You need to be able to grow and
earn above and beyond inflation. So here I am using an example of
7% lending out of 7%. Interest, right? That assumes there's no
defaults, let's say your a lender that lends out at 7%
interest and you have all these defaults. You're not actually
making 7% You're making less than 7%. Yeah, you can put on
your books. We were profitable, you know, but your purchasing
power has gone down. Now, when you go out and you order
supplies for the office, you rent, you have to pay your rent,
maybe your rent has gone up. Possibly payroll, you know what
I mean, all these things your health insurance cost you like
we were profitable, I don't understand it. But next year, we
won't be profitable, because all of our expenses went up. How can
this be? It's because well, you didn't actually make any money.
Yes, the dollar the figure went up, but your purchasing power
went down. That's if you're lending just to 7%, right. And
you earn less than that, because you had defaults. So now you
have to charge more than 7%. And if you just make 7%, all we did
was break even, there are lenders out there who charge 7%
and less. The wild part about that is what they're earning is
not enough to keep up with the the increase in purchasing
power. Yeah. So even if they're booking profits, on their, you
know, right now, yeah, they're going to find that in like the
next year as their expenses go up. Wait a minute. We're not
making any money. Yeah. Right, all of our expenses went up. Now
we have to charge higher interest rates. This is like,
this is a huge problem, I think in the market, because borrowing
costs are so low. That you know, the fact that you know, the
federal funds rate is like zero 0%. Right? It doesn't make any
sense. And you can get a you can technically get a bank or bank
loan for 7% or less. And even if you're charging 15% And you're
like, Whoa, whoa, whoa, 15% interest that's high add to your
defaults. Maybe you're making 12%. Right? Well, okay, you only
have a 5% spread between what you earn and what inflation is.
So that's a pretty slim margin. Yeah. Especially for a lender
who's charging 15%. You thought that number was high? There are
there there are a lot of lenders in the market whose whole
business model revolves around charging low rates, yeah, who
are going to find themselves in a position where they're
suddenly losing money? Yeah. Because they're not charging
enough to keep up with the decrease in purchasing power.
Johny Fernandez: So let me ask you this. So if someone's
charging a low a lower rate, or they, you know, categorize
themselves, or promote themselves as like, hey, we
charge low rates. And with inflation hitting, obviously,
they can't keep charging those low rates, they're gonna,
they're gonna have to go higher, can they still promote
themselves as a low rate company? If at the end of the
day, it's not, they're not charging lower rates than what
they used to charge?
Sean Murray: You mean that they increase the rate? Correct. Like
and can they still consider a low rate? So I mean, arguably,
arguably, yes. Yeah, right. You still could, but it's it's so
weird because you're not really seeing lenders jacking up
interest rates right now. Yeah, that's not happening. Yeah, the
fact that people aren't jacking up interest rates at the same
time that inflation is soaring is sort of like an inequality
and imbalance in the market that I would expect in the next 12
months to start to have to be corrected. Yeah, there's no way
I would if I were to start a lending company today. And
they're like, hey, our mission is going to be to charge 5%
interest, I'd like well, we're instantly out of business
instantly. Because it's already a losing model. Yeah, we won't
earn enough to keep up with the increase in purchasing power.
Unless inflation magically just stops at that level. We don't
have to worry about future years. Yeah. But what we're
seeing is a constant increase up that 7% Number is up 100 basis
points from the month before. So that 12 to 7% is on a trailing
12 month basis. Last month, it was at 6.9% is ticked up to 7%.
Yeah, so we're on a trajectory upwards, right. Yeah. Unless it
stops and holds in place, you know, then you're in a better
spot. But if it keeps going up, and you're charging low interest
rates, I mean, I'd have to think you're instantly you're screwed.
Yeah, everyone who's in the lending or funding business has
to pay attention to inflation, because your purchasing power is
going to go down. So you have to charge more.
Johny Fernandez: Yeah. So if someone's going to approach you
and ask you, Hey, Sean, what's gonna happen? You know, is this
going to continue? When is this gonna go down? Obviously, we
don't have a crystal ball. So we don't know. But what would you
tell that individual?
Sean Murray: What I think is going to happen? Yeah. I think
that you have to invest your money in a way that's going to
earn a yield that's going to outperform inflation. I think
many of us who are conservative, myself included, are content to
put money in a savings account, even if it earns, like, 1% or
less,
Johny Fernandez: What if it's under a mattress?
Sean Murray: Or under a mattress or under a mattress? Like maybe
I don't know, maybe someone you know, who's doing that. I would
tell them that all you're doing is hurting, is it's just losing
you're losing money. Yeah. Your you know, your $100 is now worth
like, you know, $93 Yeah, right. After the course of a year, you
don't want to have that happen? Yeah, your money should, should
obviously be going up in value, you know, the stock market
historically, has returned, like, you know, between seven
and 10% per year, on average over a very long period of time,
right. So you're competing against people who have a lot of
money in the stock market is saying 7%? Well, if I earn
between seven 10% of the stock market? I'm going to be okay,
yeah. And the S&P 500. In 2021, I think went up 20, 20, some odd
percent, somewhere between 20 and 29%. Right. That's, that's a
nice number. Because not only did you stay above inflation,
but you also made yourself a nice profit, you kept your money
under your mattress, and you lost money. Well, guess what,
that spread between how you know how you're doing versus other
people, you've gotten poor and the people in the stock market
got richer, neither of you did anything with your money other
than pocket in different spots under the mattress seems safe.
But now your purchasing power with that money is less person,
putting in the stock market ahead of inflation, their
purchasing power is more. So I would just say think of ways.
And don't I don't mean just dump it all into like crypto or
something. But you have to you have to stay above inflation,
otherwise, you're just in an environment where your expenses
are going up, but your own your own ability to pay and is not.
Johny Fernandez: So let me ask you this. There's a lot of guys
that I met at Broker Fair, they're young guys, you know,
anywhere from 20 to 26 years old. They, you know, they
started out in this industry, they either they're either
working alone, or they're new, you know, this is the only job
that they have, because they know that there's money in this
and they're trying to kind of, you know, make ends meet and try
to stay afloat. What would be your advice for them for these
newer guys about inflation, in layman's term, and if someone's,
you know, broke, or if someone's just starting out, they don't
have, you know, money to pull from, you know, what would you
say to them?
Sean Murray: All, I mean, in regards to how Inflation affects
them, my only advice would probably probably be not to work
for a lender who charges extremely low interest rates,
because in the next 12 months, they're gonna come to the
realization that they're losing money, and are probably going to
have to do something to resolve that. Maybe they're gonna have
to let people go, maybe they're gonna have to change their
rates, I don't know, but a low rate lender, in an environment
where there's 7% inflation. I don't understand it. I don't
know why people still do it. If I was a lender right now. If it
was me. Yeah. If it was me. Like, Sean, what would you do if
it was you? And you were running a lending company, a funding
company? Yeah, I would be jacking my rates up. Like how
much higher more than 7%, 14, 15%? I don't know if it has to
be that high. Right. But I would I would be jacking them up. I
would be looking at 7% be like holies holy cow, right. I would
I would I would build in maybe, you know, one 2% per year in a
possible on like an average year. But you tell me it's 12%.
And on the increase, I say, I would be jacking up my rates.
Yeah, that would be my, but then they're like, Oh, well, how do
you compete when other people aren't doing that? Yeah, I would
think that they would have to eventually, yeah, you can't.
Johny Fernandez: So the game is not waiting for other people to
jack up their prices and kind of follow the game right now, the
plan of action should be for you to kind of take care of
yourself, jack up the rates. And it doesn't matter what everyone
else around you is doing?
Sean Murray: Well, you have to still stay competitive. No one
else is raising the rates and you are then you get no business
doesn't matter that you raised your rates, right. So I think,
you know, it's that weird balance, you just have to
wonder, how can Why are there lenders out there who can lend
below the rate of inflation, because their purchasing power,
at the end of the day is going down? Unless lending is
essentially an onboarding product for their other products
or like a loss leader where we lend to these customers, but
then we sell them all this other stuff. And so we still lend at
these really low interest rates, because we're selling them, you
know, a tool, a monthly fee, we're giving them a wealth
management thing or whatever, we're selling them insurance.
And so we don't, you know, the fact that our lending rates are
so low, and it's below inflation doesn't matter, because it's
just an onboarding tool. But if you're just a pure lender
lending below the rate of inflation, that makes no sense
to me. If I was in the market, competing against other lenders,
I would be I would increase my rates no matter what, first of
all, because I would have to because I would have to I would
have to make sure that I wasn't, I wasn't hurting myself, but I'd
have to still think about remaining competitive against
all the other companies who are not aware of the implications of
inflation. I think they read it and you're like, oh, it's bad
for the economy. Yeah, oh Mainstreet is suffering you know
what I mean, I'm going to, I'm going to save Main Street
because I'm a lender, or a funder. You know, they're
hurting because of inflation. Like, hey, you're a lender,
you're the one being affected by inflation. What are you doing
about it? Yeah, you know what I mean? Yeah, that's what you got
to be thinking about out there. If you're a lender of funder,
how is inflation affecting my business? It's probably going to
hurt you. Well, I know it's hurting you.
Johny Fernandez: Yeah. No, that's good to know. Great
conversation. I just like how you get so excited about
inflationn. So yeah, I had some real thoughts about it. Well,
cause I know for a fact because because I've seen this
firsthand. You definitely get excited about topics like
inflation. And I remember when we were talking you're like
this, I love this. It's like a kid in a candy store.
Sean Murray: We have Jack Dorsey who was formerly the CEO of
Twitter and still the CEO of Square who said a few months ago
that there's gonna be hyperinflation. Now he stands
alone as far as credible people. Really? Yeah. He stands alone
among credible people who have predicted hyperinflation,
hyperinflation, we're not talking about seven. This is not
hyperinflation. 7% is not hyperinflation. Hyperinflation
is like 40, 50%, you know, plus, where you know, $100 Today is
worth $50 two months from now, or something like that, you
know, it's crazy. But he here he was out there predicting it. And
we're not in the hyper inflationary environment. But we
are definitely in a real inflationary environment. You
said 1982, I wasn't even born. So I haven't had 7% in my whole
entire life.
Johny Fernandez: Well, and I think honestly, like, just put
the putting the industry aside on a day to day basis. You know,
going grocery shopping, going to get gas go like simple things.
And like, because I budget, typically my budget, like this
is how much you spend on groceries. I go to the grocery
store, and I like leave shocked out of my mind. Because the fact
that like, certain things have gone up, or like the sandwich
right down the street here in Brooklyn. I used to get it for
$7 7.50 When I add extra $10 $10
Sean Murray: Yeah. What'd he do? He jacked up his price he did.
It hurt my feelings. But this is what I paid for it. This is what
happens though. Yeah, prices gonna have to get jacked up.
Yeah. So if you're the person out there saying, Oh, no. Oh,
how can this affect? You know, it affects you?
Johny Fernandez: Yeah, it's but it's affecting everyone. And
everyone should be very well aware that like, what used to
budget last year, the year before that, it just isn't
enough now. Yeah. Even like, I love red meat, red meats up by a
lot $20 A pound in certain stories here in New York City,
which is insane.
Sean Murray: Yeah, I mean, if you if you just follow some of
the conversation among among FinTech companies, they'll tell
you that, essentially, it's been in the money out there. Yeah.
Trying to trying to chase deals. Yeah, so many different Wall
Street firms just want to put out as much money as possible.
It's because there's too much money in the market. That's why
we have inflation. Yeah. Because it's so much money in the
market. People don't know what to do with it at all. In order
and now you have people who want to borrow it. We're like, oh, I
don't know. It used to be one person want to give me money
now. 10 do they're all desperate to give me all their money
because they all have too much money. So what do I do as the
borrower now I want the lowest rate. And all these people were
like, well, I can't I can't lend at a low rate. I have inflation
Like, Oh, I guess I'll go with your competitor. Right. And so
you end up with low rate deals, where the only person who wins
is the borrower, you know, when it's a great time to be a
borrower, if you can get a low interest rate, borrow, if you're
borrow, like crazy if you're if you can get a low rate,
Johny Fernandez: Well, this translates into buying a house,
for example,
Sean Murray: Borrow. Yeah, get as many houses as possible,
interest rates are now are to 2.5% Get all the houses you can
get. Because think about it, the value of your house is going to
go up with inflation. Yeah, so your $500,000 house is going to
be a million dollar house. And if you borrow it at, you know,
3% and inflation goes up to 10%. Man, you're, you're you're doing
awesome. The value of the house just went up so significantly,
and here. You are still paying this, you know, rinky dink 3%
rate on your house. Yeah, buy your house doubled.
Johny Fernandez: I learned I refinanced. I went down four
points. Really? Yeah. It was wild. For the lender, that's
you're a borrower it's a great time.
Sean Murray: But because they haven't, there's so much money.
That's why we haven't placed there's infinity money around,
nobody knows what to do with it all. If you're an average person
saying, What do you mean so much money? You know, how hard it is
for me, I can't pay my bills on noon, you know, yeah, I just got
to tell you at the, at the higher levels, I get, you know,
the average people, you know, like, like us and stuff, right?
Speak for yourself. So it was, you know, at least for myself,
we're not swimming in, we're not swimming in dough. But when you
get higher up the chain, yeah, they have so much money. They
don't know what to do with it. Yeah, it's infinite. And it's
everywhere. And we just had all these billion and trillion
dollar packages and it is swimming and people don't know
what to do. And that's why we have inflation, we're gonna have
more inflation, it's great time to be a borrower. You know,
difficult time to be a lender, but you gotta you gotta react in
such a way so that your company is still profitable.
Johny Fernandez: Yeah, for sure. Great conversation. I love it. I
don't know about you. But at nighttime, I have a big bathtub
full of money.
Okay, that's, that's why that's why I like you know, this, this
conversation. This conversation. Yeah. I am inflation. Inflation.
I am the infinite money,
No, but honestly, I think it's definitely thank you for your
knowledge, because I know there's a lot of people out
there that honestly, are just kind of like, they see it. And
they're like, what's in it for me? Or like, how, how does this
affect me? And I think especially a lot of the younger
people they're like inflation, that's a term like economics
class, but no, it's like, and it will impact especially if you're
starting, I think a lot about the guys are starting out,
because I've met so many of them, you know, earlier on in
Broker Fair, and a lot of them just need the knowledge to
survive in this industry. And a lot of them are just trying to
figure out how to maneuver it.
Sean Murray: Yeah, well, hey, short term, small business
finance is a great business to be in, because although there's
a lot of criticism about the high rates, guess what, it's
inflationary protected, right, to an extent you have to do it
responsibly, you have to do it in a way that's profitable. But
there's an actual market where the rates reflect reality. I
think small business finance companies are criticized,
oftentimes, for their high cost. Maybe they're just doing things
the right way. I think a lot of those companies don't make as
much money, as regulators like to speculate that they do. Yeah,
they're pricing them based upon what the market has decided. If
they wanted to charge whatever they want, right? Customers
would just choose a different option, and somebody else would
provide it to them. Yeah. Why do they exist? Because it works,
because the market has decided that is the price. It's a good
time to be one of those companies not charging, you
know, 1% interest or whatever, because you have a better chance
of actually staying ahead of inflation versus all the people
who are charging low rates.
Johny Fernandez: Yeah, that's good. Well, thanks for your
input. Appreciate it. Anytime. And I know people out there
appreciate it, too. So we're gonna wrap up today with a
lightning round. Okay. All right. It's gonna be a very
quick one. We have one specific question for the lightning
round.
Just one question just one question. A one question
lightning. Yeah. Okay.
All right. So in this lightning round, Sean, what is an early
payoff discount?
That's the question that I got. That's the question that we got.
What is an early payoff discount? So an early payoff
discount is a discount that a borrower would get for paying
off their loan early. Okay. But I'm presuming there's more to
that question. And I actually think that we actually even
bring this up. Okay. Because I don't know if people use this
particular phrase, when they're talking about early payoffs, but
there's a difference between loans and MCA, okay. In a loan,
if you pay off your loan, early interest no longer accrues the
benefit to paying off a loan early is you stop the accruing
of interest. You're paid off and it's done. Right. So if you're
like, Oh, my goodness, if I didn't pay this thing down, now,
I'd incur all this interest. I just want to get rid of it I
have the cash. If you're in a different product where someone
bought your future receivables, and you're like, it's been three
months of this, I just want to get out of it. I just want to,
you know, pay whatever is required and be done with it.
The problem with that is that you you contracted to deliver a
fixed amount of receivables to the buyer. It's not accruing
interest. You don't just pay it down and then stop accruing
interest, no interest would ever accrue it, yeah, you agreed to a
fixed amount, a fixed amount to pay, no matter when you have to
pay it could take a short time, it could take a long time. But
if you're like, Hey, I just want to get rid of it, there's a good
chance that you're going to have to pay the full amount, okay,
that you that you can track it to pay, which means there's no
benefit to paying it off early. Okay. So that that brings us to
the early payoff discount. Maybe that's where this question came
from? I don't know what the genesis is for the question.
Yeah. But that brings us to an early pay off discount on that
particular product. There are companies that offer this
product who understand that, you know, the average person might
be thinking, hey, if I, if I just get out of it early, don't
I get some type of break? Right? Like, you know, I was did the
math, and it would probably take like a year for you to get all
of this, but I want to just get out of it in two months, there's
got to be some kind of a deal. Yeah, right. You know, what's,
what are you gonna do for me? Right? Yeah. And so that brings
in the early payoff discount. Some funding companies will
offer an early payoff discount. I don't think that's the
official term. But I think maybe, you know, the kind of the
common lexicon of like, what's an early payoff discount? Some
funding companies will offer a discount on the purchasedamount.
If you if you decide to end the contract at a pretty early on
date, then you know, maybe it's two months in, or three months
in, yeah. And you say I just want to get out of this, I don't
want to have this anymore, they might offer a discount. How will
you know, if you have one, this is something that's going to be
in your contract. If you're the broker, you want to see if
that's in there, you don't want to be in a position where your
merchant is trying to just negotiate a discount, and they
don't have one. Yeah. So you want to know ahead of time
what's in the contract? Because you could even use it to your
advantage and tell the customer like, you're getting this
amount, you're agreeing to deliver this amount of these
amount of receivables. However, if you look at this paragraph
here at the two months, you're like I just want to, end the
whole thing. Yeah, that number comes down to here, right? It's
a good way to sell some product. Okay. I think, you know, I used
to do that a long time ago, one or two companies I worked with
had that offer and I used to pitch that I said, you know, you
probably won't want to do it. But it's good to know that it's,
it's there. If you're like two months. Just get me out of this.
Yeah, you get a nice early payoff discount.
Yeah, there you go. Awesome. Man of wisdom. Since 1982 look at
you.
Sean Murray: Well, I wasn't born, I wasn't even born in 82.
If you can believe it, don't let the gray hair fool you don't let
the gray hair fool you.
Johny Fernandez: Alright, so a couple other things to touch
base on. If you haven't signed up for our Miami event, Miami.
It's gonna be on March 24 2022 Miami. Go ahead just say
Sean Murray: deBanked Connect Miami, March 24.
Johny Fernandez: Obviously, Miami, deBank, deBanked Connect
Miami. So it's gonna be at the JW Marriott Marquis. We're going
to be there. Everyone's going to be there. This is a very
exciting event because a lot of people that I spoke with at
Broker Fair and then also just throughout the fright all the
weeks after they want to get out of New York, they want to get
out of where they're at. And they want to go to Miami, enjoy
the sun enjoy the event. So it's very exciting. We were also
working on making sure that it's fun for everyone.
Sean Murray: Yeah, this is not an experiment. This is gonna be
the fourth event we've done in Miami. Yeah, so we've done a lot
of them. The last one we did was sold out. We sold more tickets
than we were when we were even allowed to and we were still
sold out. You know, people came in the door and couldn't get in
hung out at the hotel lobby. It was completely out of control.
Yeah, in a good way. Right. This is an event you want to go to I
know that there were a lot of hesitations about doing an event
in New York Broker Fair, you know, that one was vaccination
mandatory and all that stuff. None of that none of that is
going to be the case in Florida. You don't have to be vaccinated.
You know, we urge you to do all the things that are required for
you to be healthy and safe and all that stuff. This is not a
vaccine mandatory event. It's Florida. We know where we're at.
It's Miami every Miami is awesome. You gotta go there you
have to get your ticket don't wait too long. We're already two
and a half months away deBankedMiami.com
Johny Fernandez: So Sean if someone waits last minute the
day before or the day of and they show up and they have no
ticket what's gonna happen
Sean Murray: You get turned away you will you I guess you can
hang out the lobby but we had people hanging out at the hotel
lobby I don't say you know, like, you know, you're
completely out of luck and you're gonna have a terrible
time. Miami is awesome in general. Yeah, you just gonna
miss out on all the other great parts of the event itself. And
so I would say buy your ticket. Don't wait too late. Miami sold
out last actually, every Miami event has always sold out before
these events always exceed my expectation way more than Broker
Fair in terms of what I'm predicting. Yeah, the turnout is
going to be the last Miami, Miami event we did was January
2020. It was completely out of control in a good way.
Johny Fernandez: Yeah. No, it's awesome. So we have that going
on. And then that's pretty much it. That's, that's the big thing
we're working towards. Hang out with us at Miami. Yes. Okay. All
right. And then also, that obviously, for other stories and
other information regarding the industry, you can go on
debanked.com, you can go on Daily Funder. And that is pretty
much going to be the source to everything that is in the space.
And then also, don't forget our social media platforms,
LinkedIn, Twitter, Instagram, all that, but that will
obviously lead you back to debanked.com.
Sean Murray: And I'm supposed to tell you, okay, that you also
have to follow deBankedConnect on social media. Yes, we have
deBanked Yes, Broker Fair. Yes. But if you want to get updates
about deBanked Connect Miami, other events we do related to
deBanked Connect, follow the deBanked Connect social media
accounts. Add that to your list.
Johny Fernandez: Let me ask you, what are you most excited about
for deBanked Connect Miami?
Sean Murray: So it's honestly it's networking on a whole
nother level? obviously a big part of it for any show that we
do. It's there's nothing like it in Miami. And that's because the
networking goes literally usually past midnight. Yeah. So
like the the New York show it ends at like, yeah, right. And
some people will do a dinner. Other people just go home.
That's how it is. Although I was here, yeah, Miami is a whole
nother level people stay out till two in the morning,
sometimes even later. I do not take that. But we're talking
about networking in Miami style. It's awesome. The right people
are going to be there. And we get all the companies, the local
companies from Florida. So you're going to travel to New
York or some other place. Who are in the neighborhood Miami's
huge, the industry. They all come there and we get to connect
with the Miami community the Miami small business community
and hang out with them literally all night long.
Johny Fernandez: Yeah. So I'm excited for that. Because I've
heard stories. I'm really excited for that. I'm also
excited to get a Cuban sandwich in Miami. I love a Cuban
sandwich. But then I'm also excited to just meet people that
just that follow us interact cause I think Broker Fair was
awesome. And you got to see everyone, but Miami. It's just
I've been down in Florida a handful of times alone and in
Sean Murray: It's gonna be great deBankedMiami.com buy a ticket
2022. But it's it's different. From what, I'm excited for it.
Johny Fernandez: And also J W JW. Marriott Marquis, there's
different
Sean Murray: And the rooms are actually selling out. I know
it's two and a half months out. But our room block is already
it. It's filling up pretty quickly. Yeah.
Johny Fernandez: Exciting please do not miss that. So that's
pretty much all we have for today. All right,
Sean Murray: I think I think so. All right,
Johny Fernandez: I guess I guess. So. Yes. Follow us. Don't
forget to tune in time be here. We're going to give you guys the
latest news and also have good banter conversation
Sean Murray: And I'll be screaming about inflation. Yes.
Johny Fernandez: Alright you guys, I'm Johnny Fernandez, I'm
Sean Murray, see you guys next time.