1 00:00:00.200 --> 00:00:03.200 But this California law is requiring a lot more detail than just a 2 00:00:03.200 --> 00:00:05.000 simple just a simple disclosure form. 3 00:00:06.000 --> 00:00:06.300 well 4 00:00:07.400 --> 00:00:08.500 here's a 5 00:00:09.200 --> 00:00:12.200 here's a good thing to talk about first because we've talked 6 00:00:12.200 --> 00:00:16.000 about disclosure laws on here. I feel like a ton if 7 00:00:15.200 --> 00:00:18.500 there's a law being proposed if one passes if 8 00:00:18.500 --> 00:00:19.300 one goes into effect. 9 00:00:20.700 --> 00:00:24.900 And whenever the topic is brought up, I usually 10 00:00:23.900 --> 00:00:26.800 have I usually 11 00:00:26.800 --> 00:00:27.800 have people tell me that. 12 00:00:28.600 --> 00:00:31.300 That they're in favor of the disclosure law and 13 00:00:31.300 --> 00:00:34.100 I'm like, you know, oh, okay. Tell me about that and say 14 00:00:34.100 --> 00:00:38.300 well we're one of the good guys and we're in favor of disclosing. Why 15 00:00:37.300 --> 00:00:40.400 wouldn't we want to you know, provide accurate and 16 00:00:40.400 --> 00:00:42.800 transparent information to our customers I said, 17 00:00:43.900 --> 00:00:46.400 Well, yeah that makes sense. You know, that would make 18 00:00:46.400 --> 00:00:49.400 you a good person or you know, one of the good guys if you want to make sure that the 19 00:00:49.400 --> 00:00:52.300 the other party has all the information to make an informed 20 00:00:52.300 --> 00:00:55.600 decision, but when these laws are drafted they're not 21 00:00:55.600 --> 00:00:55.700 always. 22 00:00:56.700 --> 00:00:59.100 They're not always coming in with that being in the 23 00:00:59.100 --> 00:01:02.400 end goal. Yeah, it's not just about there being 24 00:01:02.400 --> 00:01:05.400 a form or an APR that makes 25 00:01:05.400 --> 00:01:08.500 the customer more informed because all these other things 26 00:01:08.500 --> 00:01:11.500 that come with that. Yeah that 27 00:01:11.500 --> 00:01:14.600 are going to make it more expensive and more difficult 28 00:01:14.600 --> 00:01:17.900 for you to operate your business. And and 29 00:01:17.900 --> 00:01:20.800 this is this is what this is what's happened? Yeah with 30 00:01:20.800 --> 00:01:23.400 with California for Virginia. Yeah there, 31 00:01:23.400 --> 00:01:26.400 you know, there was some legal leg work that company has 32 00:01:26.400 --> 00:01:29.600 had to jump through. I've heard from several funding comedy 33 00:01:29.600 --> 00:01:32.200 that said they are confident that they're able 34 00:01:32.200 --> 00:01:35.800 to continue funding like they were before they've got the form like 35 00:01:35.800 --> 00:01:38.300 we've got the form the form the form everyone keeps 36 00:01:38.300 --> 00:01:41.100 they can't talk about the form enough. We have the form we put 37 00:01:41.100 --> 00:01:44.300 the form we're good. We're doing the form we our form 38 00:01:44.300 --> 00:01:47.600 is good and then it's like okay on to California. What's my 39 00:01:47.600 --> 00:01:50.500 California form? And it's like hold on. This one's 40 00:01:50.500 --> 00:01:53.900 not just about a form. There's a lot more going on here in California, 41 00:01:53.900 --> 00:01:56.100 and I think it's interesting because when we talk 42 00:01:56.100 --> 00:01:56.300 about, 43 00:01:56.600 --> 00:01:59.200 And you we actually there's a there's a video 44 00:01:59.200 --> 00:02:02.300 that we do we actually went through the form with everyone like this is 45 00:02:02.300 --> 00:02:05.500 what this could mean, you know talk with your lawyer don't we're not 46 00:02:05.500 --> 00:02:08.200 giving legal advice but and it was a form we sat here 47 00:02:08.200 --> 00:02:11.300 we went through the form we went through the form but in California, it's actually a lot 48 00:02:11.300 --> 00:02:14.500 different, you know, it's gonna require specific disclosures on 49 00:02:14.500 --> 00:02:18.200 these contracts on the commercial Finance contracts, 50 00:02:17.200 --> 00:02:20.400 you know anywhere from 51 00:02:20.400 --> 00:02:23.500 you know, the actual APR, you know 52 00:02:23.500 --> 00:02:26.300 from normal things like that to when it 53 00:02:26.300 --> 00:02:29.600 comes to the operation process when it 54 00:02:29.600 --> 00:02:32.400 comes to you know, what exactly the my new 55 00:02:32.400 --> 00:02:35.300 details and something we spoke about earlier was when we 56 00:02:35.300 --> 00:02:39.000 were off camera was this specific this 57 00:02:38.100 --> 00:02:41.300 school this specific law is requiring so 58 00:02:41.300 --> 00:02:44.200 much more detailed and just kind of 59 00:02:44.200 --> 00:02:47.800 a generic overview of you know, hey, this 60 00:02:47.800 --> 00:02:50.700 is a product. Here's the epr sign and we're done. This is 61 00:02:50.700 --> 00:02:52.800 this actually has more, you know, 62 00:02:53.900 --> 00:02:56.700 Conversations that can happen that can trigger, you 63 00:02:56.700 --> 00:02:59.500 know into talk about, 64 00:02:59.500 --> 00:03:03.100 you know business about talk at 65 00:03:02.100 --> 00:03:05.100 having conversations that you know will need to 66 00:03:05.100 --> 00:03:09.000 be logged going to be timed. So Sean, let 67 00:03:08.100 --> 00:03:11.500 me ask you this. What do you think overall is 68 00:03:11.500 --> 00:03:14.600 the one the main thing that people should be aware of if they're 69 00:03:14.600 --> 00:03:17.000 thinking about doing business in California? All right. 70 00:03:17.400 --> 00:03:21.100 So I think this there's two things one one is with Virginia 71 00:03:20.100 --> 00:03:23.600 and don't quote me on this because this 72 00:03:23.600 --> 00:03:26.400 is my takeaway if I'm talking with someone who 73 00:03:26.400 --> 00:03:29.500 is more knowledgeable about it than I but with in 74 00:03:29.500 --> 00:03:32.500 Virginia the form the infamous form 75 00:03:32.500 --> 00:03:35.900 that we've talked about is that that form is required with 76 00:03:35.900 --> 00:03:38.300 the contract, right? So you're funding the 77 00:03:38.300 --> 00:03:41.700 merchant you're doing the deal. Here's the disclosure form. 78 00:03:42.400 --> 00:03:45.300 Easy in California. My understanding is 79 00:03:45.300 --> 00:03:46.400 that it's a little bit different. 80 00:03:47.200 --> 00:03:50.900 If you need to disclose potentially earlier on 81 00:03:50.900 --> 00:03:53.300 in the conversation, it may not 82 00:03:53.300 --> 00:03:56.500 just be here. It is with the contract. I believe 83 00:03:56.500 --> 00:03:59.800 it has more to do with when you're making proposals to 84 00:03:59.800 --> 00:04:02.200 the merchant when you're like, you know you 85 00:04:02.200 --> 00:04:05.700 qualify I think for you know, 10,000 or you 86 00:04:05.700 --> 00:04:08.300 know, fifteen thousand dollars easily approximate terms 87 00:04:08.300 --> 00:04:11.700 we're talking about that conversation now is a 88 00:04:11.700 --> 00:04:14.100 little bit more dangerous than it used to be because you have 89 00:04:14.100 --> 00:04:17.800 to worry about whether or not it's entered into the territory as to 90 00:04:17.800 --> 00:04:20.800 whether or not you need to now offer the state required 91 00:04:20.800 --> 00:04:23.800 disclosures. So the whole process you 92 00:04:23.800 --> 00:04:26.400 just mention the word like term operational process. 93 00:04:26.400 --> 00:04:26.900 Yeah. 94 00:04:27.800 --> 00:04:30.600 The operational process could be affected 95 00:04:30.600 --> 00:04:33.800 because everyone is used to pitching the merchant terms 96 00:04:33.800 --> 00:04:36.300 right at some point, right? It could 97 00:04:36.300 --> 00:04:39.400 be a pre-approval. It could be Ballpark and then you get 98 00:04:39.400 --> 00:04:42.600 to the point where like these are the final terms sign the contract. 99 00:04:42.600 --> 00:04:45.600 However, you may need to make disclosures prior 100 00:04:45.600 --> 00:04:48.500 to the final terms. It could be early in the conversation when 101 00:04:48.500 --> 00:04:51.100 you're like texting the merchant we might be able to 102 00:04:51.100 --> 00:04:55.000 get you 10,000 out of six month deal right that and 103 00:04:54.400 --> 00:04:57.200 don't quote me. You need to talk to a lawyer but 104 00:04:57.200 --> 00:05:00.700 that could potentially be a scenario in which 105 00:05:00.700 --> 00:05:03.500 you are now required to give some sort of estimated 106 00:05:03.500 --> 00:05:06.300 APR based upon a state required calculation. Yeah, 107 00:05:06.300 --> 00:05:10.100 and that you have to log this particular conversation 108 00:05:09.100 --> 00:05:12.400 and report it back to the funding 109 00:05:12.400 --> 00:05:15.900 company that it happened along with the disclosure that you provided and 110 00:05:15.900 --> 00:05:18.400 something that the Articles say is that like all this 111 00:05:18.400 --> 00:05:21.900 data that you have from the first conversations you 112 00:05:21.900 --> 00:05:24.400 have, you know that has all the details of you 113 00:05:24.400 --> 00:05:27.200 know, the time the dates that all needs to be stored. You can't 114 00:05:27.200 --> 00:05:27.300 just 115 00:05:27.700 --> 00:05:30.100 The way because part of the compliance is that 116 00:05:30.100 --> 00:05:33.900 you have proof of the data showing that you know, this is all you 117 00:05:33.900 --> 00:05:36.300 know for this specific transaction. This is 118 00:05:36.300 --> 00:05:40.400 all that has gone into it. So it's not just contract form 119 00:05:40.400 --> 00:05:43.600 you're done. There's a lot more that goes into the California 120 00:05:43.600 --> 00:05:46.400 law. When did you talk to the merchant? What did what 121 00:05:46.400 --> 00:05:49.900 exactly did you say Oh you talked about this. Did you 122 00:05:49.900 --> 00:05:52.100 send over the necessary disclosures? Did you use 123 00:05:52.100 --> 00:05:55.200 the estimated APR that is required by the state. Did you 124 00:05:55.200 --> 00:05:58.400 log in the conversation? Did you did you put down the put it 125 00:05:58.400 --> 00:06:01.100 down in a journal and time stamped that this happened? Did you report 126 00:06:01.100 --> 00:06:04.700 it back to the funder when it happened? Guess what? My understanding isn't 127 00:06:04.700 --> 00:06:07.300 don't call me on everything I say but my understanding that 128 00:06:07.300 --> 00:06:10.800 the fonder is responsible for whatever the 129 00:06:10.800 --> 00:06:13.300 broker is doing if you're like, well, you know, 130 00:06:13.300 --> 00:06:16.000 I might just kind of keep Blind Eye to some of it. You know, 131 00:06:16.300 --> 00:06:19.200 we'll we'll comply where we can and if the broker 132 00:06:19.200 --> 00:06:22.400 goes off and the deep end and starts making proposals that are outside 133 00:06:22.400 --> 00:06:25.400 of my purview. You know, that's not on me. My understanding 134 00:06:25.400 --> 00:06:27.500 is that it may be on you if you're the 135 00:06:27.600 --> 00:06:30.200 Company if the broker is negotiating deals with 136 00:06:30.200 --> 00:06:34.400 the merchant they may be required to give approvals or 137 00:06:34.400 --> 00:06:37.300 pre-approvals or terms that are approved by the funder and 138 00:06:37.300 --> 00:06:40.200 abide by all the necessary disclosures every single 139 00:06:40.200 --> 00:06:43.300 time. They make those offers to the merchant. These are things you 140 00:06:43.300 --> 00:06:46.300 need to think about. Do not quote Sean Murray. Do not 141 00:06:46.300 --> 00:06:48.100 say that Sean Murray told you to do this. 142 00:06:48.800 --> 00:06:52.300 This is just my understanding, please hire qualified 143 00:06:51.300 --> 00:06:54.200 Council, but the other thing 144 00:06:54.200 --> 00:06:57.600 is that you know, how did this compare to California? That's just 145 00:06:57.600 --> 00:07:00.000 one thing this whole trigger of disclosure. 146 00:07:00.900 --> 00:07:03.900 The other side of it is that it's it's 147 00:07:03.900 --> 00:07:06.100 a it's not just a matter of filling out 148 00:07:06.100 --> 00:07:09.900 a form you now need to calculate an APR. First of 149 00:07:09.900 --> 00:07:12.200 all, if you're doing a loan, that's easy. 150 00:07:12.200 --> 00:07:15.300 Yeah, but if you're doing say a purchase the 151 00:07:15.300 --> 00:07:18.500 future sale, if you're doing an MCA transaction, there's no such 152 00:07:18.500 --> 00:07:21.500 thing as an APR now because it's so 153 00:07:21.500 --> 00:07:24.400 short that it wouldn't be appropriate some people think they're 154 00:07:24.400 --> 00:07:27.100 like, oh you don't want to give an APR because your argument is 155 00:07:27.100 --> 00:07:30.400 that it's so short-term that it's not appropriate not about appropriate. It's 156 00:07:30.400 --> 00:07:33.200 just mathematically not possible to calculate because you 157 00:07:33.200 --> 00:07:36.100 have no element of time and APR requires a 158 00:07:36.100 --> 00:07:39.300 precise element of time in the calculation and 159 00:07:39.300 --> 00:07:42.700 there is none in an MCA. Guess what this date 160 00:07:42.700 --> 00:07:45.400 of California it came to terms with that 161 00:07:45.400 --> 00:07:48.200 because it is true. So they said guess 162 00:07:48.200 --> 00:07:51.400 what you are going to estimate one. You 163 00:07:51.400 --> 00:07:54.600 can use two methods to decide what it 164 00:07:54.600 --> 00:07:57.200 is Oracle method or the underwear. Yeah Historical Method or 165 00:07:57.200 --> 00:08:00.500 the underwriting method not gonna get into the two different methods, but it's my 166 00:08:00.500 --> 00:08:00.700 understanding. 167 00:08:00.800 --> 00:08:03.800 That New York is going to try to do the same thing, but they're like you choose 168 00:08:03.800 --> 00:08:06.200 the method that you want and it's you 169 00:08:06.200 --> 00:08:09.700 know, it's an estimate but we're gonna hold you to it if you're estimate is 170 00:08:09.700 --> 00:08:12.700 wrong, even though you're just estimating right? So you 171 00:08:12.700 --> 00:08:15.600 have to work with legal counsel to make sure that whatever 172 00:08:15.600 --> 00:08:18.400 estimate you use whatever methodology you use 173 00:08:18.400 --> 00:08:21.300 is up to Snuff with what they want. But then 174 00:08:21.300 --> 00:08:24.300 it goes one step further. I already had no idea about this 175 00:08:24.300 --> 00:08:27.900 at all until I had this conversation last week it then 176 00:08:27.900 --> 00:08:31.500 so all right. So I a fundamental 177 00:08:30.500 --> 00:08:33.700 piece of a MCA agreement. 178 00:08:34.600 --> 00:08:38.000 Is that there is a true-up or reconciliation provision, 179 00:08:37.900 --> 00:08:40.700 which means that if 180 00:08:40.700 --> 00:08:43.800 a Merchants sales go up or down 181 00:08:43.800 --> 00:08:47.400 the merchant has the ability to reconcile the 182 00:08:46.400 --> 00:08:49.200 payments based upon 183 00:08:49.200 --> 00:08:52.500 whether or not funds are over collected or undercollected. So if 184 00:08:52.500 --> 00:08:55.400 the sales tank like hey, you were technically debiting out too 185 00:08:55.400 --> 00:08:58.500 much. You need to reimburse me for the overage Bill the 186 00:08:58.500 --> 00:09:01.100 other way too. Hey your sales doubled by technically should be 187 00:09:01.100 --> 00:09:04.300 giving you more you should have been collecting more than you did at the 188 00:09:04.300 --> 00:09:07.200 reconciliation and that's the true up. 189 00:09:08.300 --> 00:09:11.200 California says okay. We understand. 190 00:09:12.100 --> 00:09:15.500 That too, but now there's another here's another 191 00:09:15.500 --> 00:09:15.800 thing. 192 00:09:16.800 --> 00:09:19.600 Do you predict any of these circumstances, you 193 00:09:19.600 --> 00:09:22.100 know these scenarios happening where you're going to need to 194 00:09:22.100 --> 00:09:25.500 do one of these reconciliations? I don't know if anyone predicts 195 00:09:25.500 --> 00:09:28.100 them. Yeah, you know, that's the whole point of doing the troop because you can't 196 00:09:28.100 --> 00:09:31.500 really predict it you make a prediction the prediction was wrong. So you 197 00:09:31.500 --> 00:09:34.100 got to do the true up or the reconciliation because it's hard to 198 00:09:34.100 --> 00:09:37.800 predict the state is saying however my understanding summary 199 00:09:37.800 --> 00:09:40.300 understanding not legal advice. I'm 200 00:09:40.300 --> 00:09:43.900 not a lawyer but my understanding that the state is saying you now 201 00:09:43.900 --> 00:09:47.100 have to come up with your own predictions for 202 00:09:46.100 --> 00:09:50.500 I guess one off 203 00:09:50.500 --> 00:09:53.500 events that could trigger reconciliation or chew up 204 00:09:53.500 --> 00:09:53.900 and 205 00:09:54.200 --> 00:09:57.200 And come up with the date that you think these things will happen and the 206 00:09:57.200 --> 00:09:57.500 amount. 207 00:09:58.700 --> 00:10:00.900 That will happen when you do these two ups. 208 00:10:01.400 --> 00:10:04.400 I've never heard of anything like this before in my entire life. 209 00:10:04.400 --> 00:10:07.500 I don't know if any funding company has ever even performed 210 00:10:07.500 --> 00:10:10.200 this retent potential calculation. And so, of course, 211 00:10:10.200 --> 00:10:13.800 you know, I had a conversation with it about a 212 00:10:13.800 --> 00:10:16.300 conversation about it with someone else and said, do you 213 00:10:16.300 --> 00:10:19.400 know any of us means like how would you how would you even know? How would 214 00:10:19.400 --> 00:10:22.300 you calculate? Yeah a day and time of an 215 00:10:22.300 --> 00:10:25.100 unpredictable event that said. Well, maybe it means let's say it's like a 216 00:10:25.100 --> 00:10:25.400 ski resort. 217 00:10:26.200 --> 00:10:29.600 And you're like, well the ski resorts sales numbers are going to be lower in 218 00:10:29.600 --> 00:10:30.100 the summertime. 219 00:10:30.600 --> 00:10:30.900 like 220 00:10:31.900 --> 00:10:35.000 but she built into the original. Yeah calculation. Let's 221 00:10:34.200 --> 00:10:36.200 say let's say that it's not 222 00:10:37.200 --> 00:10:40.100 Maybe you know that you know ski season ends on 223 00:10:40.100 --> 00:10:43.300 May 1st. You can say on you know, 224 00:10:43.300 --> 00:10:46.300 June 1st. We anticipate there being a 225 00:10:46.300 --> 00:10:49.200 Reconciliation and potentially the reconciliation amount 226 00:10:49.200 --> 00:10:49.800 will be this. 227 00:10:51.200 --> 00:10:54.200 Maybe that's what it means. You don't know so Mary not a lawyer 228 00:10:54.200 --> 00:10:57.800 not a lawyer, but you have to come up with scenarios of 229 00:10:57.800 --> 00:11:01.400 where you think you could reasonably anticipate a 230 00:11:00.400 --> 00:11:03.500 Reconciliation taking place the amount 231 00:11:03.500 --> 00:11:05.200 and the date and 232 00:11:06.200 --> 00:11:09.300 If you do this wrong, too, I guess you could be held to 233 00:11:09.300 --> 00:11:12.200 account by this. These are things I've never even heard of. Yeah, 234 00:11:12.200 --> 00:11:15.500 I mean and this is definitely a unique situation because every state 235 00:11:15.500 --> 00:11:19.700 is different but something that the individual 236 00:11:19.700 --> 00:11:23.100 the professional Miss Fisher that we were talking about and 237 00:11:22.100 --> 00:11:25.200 she helped us out with this article something that she 238 00:11:25.200 --> 00:11:29.100 mentioned was getting ready for December. If 239 00:11:28.100 --> 00:11:31.500 you wait till December you're too late, 240 00:11:31.500 --> 00:11:34.200 you know to kind of get anything ready. So how in regards 241 00:11:34.200 --> 00:11:37.800 to preparation. How does one prepare for this 242 00:11:37.800 --> 00:11:39.100 new compliance line, California? 243 00:11:40.200 --> 00:11:43.300 You know if it were if it were me I 244 00:11:43.300 --> 00:11:43.400 would. 245 00:11:44.200 --> 00:11:45.300 Be working with an attorney. 246 00:11:46.300 --> 00:11:47.300 To figure this all out. 247 00:11:48.100 --> 00:11:51.700 I can't imagine that any funding company will be 248 00:11:51.700 --> 00:11:55.300 able to comply. Well if they 249 00:11:55.300 --> 00:11:58.700 do not work with an attorney to guide them 250 00:11:58.700 --> 00:12:01.100 through all this. Yeah, you're a Concepts 251 00:12:01.100 --> 00:12:05.200 in this law like the one I just talked about where you have to kind of guess future 252 00:12:04.200 --> 00:12:07.300 troop scenarios. I've never once 253 00:12:07.300 --> 00:12:10.500 contemplated in my 16 years in the industry. You never 254 00:12:10.500 --> 00:12:13.600 heard of this, right? Yeah. Sure. We all think about there could 255 00:12:13.600 --> 00:12:16.400 be a Black Swan event and there could be a tornado that wipes out 256 00:12:16.400 --> 00:12:19.500 the business but is that a reasonably anticipated event? 257 00:12:19.500 --> 00:12:22.200 Like it's giving what's reasonably anticipated and 258 00:12:22.200 --> 00:12:25.200 I think Underwriters are already trying to make a prediction as to what's gonna 259 00:12:25.200 --> 00:12:28.400 happen and we're looking back at the history. Yeah and everything that 260 00:12:28.400 --> 00:12:31.400 probably gonna be similar in the future. Yeah, and then the 261 00:12:31.400 --> 00:12:34.300 state is saying but but what if something else 262 00:12:34.300 --> 00:12:37.800 happens when you think that will happen? Yeah, I 263 00:12:37.800 --> 00:12:38.300 think that will be 264 00:12:39.600 --> 00:12:42.500 Yeah, that sounds like that sounds like data science. 265 00:12:42.500 --> 00:12:45.200 It sounds like you know, it's just copy. It's 266 00:12:45.200 --> 00:12:48.200 a complicated situation, you know you there's certain things 267 00:12:48.200 --> 00:12:51.200 you don't predict for and if you 268 00:12:51.200 --> 00:12:52.700 get it wrong, you know. 269 00:12:53.900 --> 00:12:56.000 You get in trouble if you 270 00:12:56.100 --> 00:12:59.400 don't put it all you get in trouble. So it's it's really it's really 271 00:12:59.400 --> 00:13:03.200 really weird. And I only I don't mean to scare anyone necessarily but 272 00:13:02.200 --> 00:13:05.400 these are the components of 273 00:13:05.400 --> 00:13:08.700 the California law that go into effect on December 9th. 274 00:13:08.700 --> 00:13:11.500 So we are looking at something that's quite different from 275 00:13:11.500 --> 00:13:14.100 Virginia and which it does at the end of the day, 276 00:13:14.100 --> 00:13:18.000 Virginia does boil down to a form. Yeah, so you are forgiven if 277 00:13:17.100 --> 00:13:18.300 you thought 278 00:13:19.100 --> 00:13:22.300 It's probably gonna be something similar in California, you know, 279 00:13:22.300 --> 00:13:25.200 maybe as I wanted to things a little bit different but we're one of 280 00:13:25.200 --> 00:13:29.100 the good guys. Of course, we'll comply. Well, I 281 00:13:28.100 --> 00:13:31.200 think it might be a little bit more than some of 282 00:13:31.200 --> 00:13:34.100 you have asked for or thought it would be maybe some of you are 283 00:13:34.100 --> 00:13:36.900 excited. Anyway, I don't know but it does sound like it would be costly to 284 00:13:37.700 --> 00:13:40.300 you know to comply with this and then you don't know if 285 00:13:40.300 --> 00:13:42.800 this data is going to apply some type of gotcha. 286 00:13:43.500 --> 00:13:47.100 You know map to all of this where you you've 287 00:13:46.100 --> 00:13:49.100 done everything that you could and you felt like 288 00:13:49.100 --> 00:13:52.300 you were following the rules and you said gosh that cost 289 00:13:52.300 --> 00:13:56.100 us to million dollars. Yeah, but we are a compliance in California. And California's 290 00:13:55.100 --> 00:13:58.200 regulator is just lying and wait to find 291 00:13:58.200 --> 00:14:01.000 out the one thing you screwed up and they're gonna come in and say 292 00:14:01.300 --> 00:14:04.200 gotcha. Yeah, you know what I mean? So yeah, and I think it's it's 293 00:14:05.100 --> 00:14:06.500 safe to say that 294 00:14:07.500 --> 00:14:10.100 if you are working in this industry and you are 295 00:14:10.100 --> 00:14:13.700 working in different states to not assume that what one 296 00:14:13.700 --> 00:14:16.100 state has is going to be the same as another state or it's 297 00:14:16.100 --> 00:14:19.700 going to be a copycat version where there could be similarities. But also 298 00:14:19.700 --> 00:14:22.400 there are a lot of differences as we're seeing now 299 00:14:22.400 --> 00:14:25.200 between California and Virginia, Virginia, like you 300 00:14:25.200 --> 00:14:28.500 said blows down to one form where you just fill it out you put presented into 301 00:14:28.500 --> 00:14:31.400 the contract then you keep it moving California. That's a whole 302 00:14:31.400 --> 00:14:34.700 different. It's a whole different ball game because there's 303 00:14:34.700 --> 00:14:37.400 so much my new details that go into it that you have to 304 00:14:37.400 --> 00:14:40.400 know, you know, and like you said the best piece of advice 305 00:14:40.400 --> 00:14:43.600 is to reach out to an attorney and get counsel and 306 00:14:43.600 --> 00:14:46.600 make sure you know, there's a proper understanding of 307 00:14:46.600 --> 00:14:51.300 how to do business in California. Once 308 00:14:49.300 --> 00:14:52.500 December comes around, you know, 309 00:14:52.500 --> 00:14:55.200 there was an old saying that's a low barriers to answer to this 310 00:14:55.200 --> 00:14:58.300 business. And that's if that were still true today. It's very 311 00:14:58.300 --> 00:15:01.300 quickly quickly going away because the advantage is going to 312 00:15:01.300 --> 00:15:04.500 go to the funding companies and the lending 313 00:15:04.500 --> 00:15:07.200 companies that have access to expens. 314 00:15:07.800 --> 00:15:10.600 And qualified Council. Yeah, right and it's 315 00:15:10.600 --> 00:15:13.800 the expensive because you I don't know that you could rely on the lawyer 316 00:15:13.800 --> 00:15:16.400 down the street who helped you draft your you know, you're right 317 00:15:16.400 --> 00:15:20.100 so agreement to walk you through, you know complicated 318 00:15:19.100 --> 00:15:22.100 State compliance in California. I think 319 00:15:22.100 --> 00:15:25.600 a lot of smaller funding companies know a guy, 320 00:15:25.600 --> 00:15:28.600 you know or no no woman who who can 321 00:15:28.600 --> 00:15:31.500 help them with some legal stuff. Yeah, when it 322 00:15:31.500 --> 00:15:34.500 comes up everything up an LLC, you know, I think something we 323 00:15:34.500 --> 00:15:38.500 talked about was and I'm pretty sure it was here that you 324 00:15:37.500 --> 00:15:40.700 know, you may know a guy but you 325 00:15:40.700 --> 00:15:43.800 know a lawyer that practices criminal, you 326 00:15:43.800 --> 00:15:46.400 know, family court or family law 327 00:15:46.400 --> 00:15:49.300 entertainment law and then you know, it's not 328 00:15:49.300 --> 00:15:52.500 the same as someone that practices, you know within the 329 00:15:52.500 --> 00:15:55.300 MCA within the alternative Finance industry and 330 00:15:55.300 --> 00:15:58.800 that specializes in this area. So that's something else 331 00:15:58.800 --> 00:16:01.800 to take into consideration because you may 332 00:16:01.800 --> 00:16:04.200 know a guy that can help you set up an LLC and S Corp, 333 00:16:04.200 --> 00:16:07.200 whatever but then when you're like Hey, how do 334 00:16:07.200 --> 00:16:07.500 I do the 335 00:16:07.700 --> 00:16:10.500 Oracle method of APR on my California contract 336 00:16:11.900 --> 00:16:13.500 You know, even if they give you an answer. 337 00:16:14.300 --> 00:16:17.400 Can are you are you confident in the answer that you 338 00:16:17.400 --> 00:16:20.700 get so you probably will need qualified 339 00:16:20.700 --> 00:16:23.600 counsel to give you all the precise answers. Yeah 340 00:16:23.600 --> 00:16:26.400 that you need for this particular law. Do not 341 00:16:26.400 --> 00:16:29.600 quote or use any of the stuff. I said at 342 00:16:29.600 --> 00:16:32.200 100% face value because I'm not a lawyer 343 00:16:32.200 --> 00:16:35.200 and I'm going off of my understanding of what other people 344 00:16:35.200 --> 00:16:38.700 told me and what I read, right? So do 345 00:16:38.700 --> 00:16:41.400 your own due diligence and talk to the right people the 346 00:16:41.400 --> 00:16:44.400 right qualified people to guide you through the state 347 00:16:44.400 --> 00:16:44.500 of, California.