How to Get Out from Under Spiraling Debt - Part I

Harrison Rogers – 0:00

Everybody, last time, we got talking about the struggles that I went through a few years ago financially, but we didn't really get into the depth of what led up to those struggles. And if this hits home to any of you, I wanted to be able to tell a little bit more of that story. So that we can explain, hey, if you're in this position as well, we can help you get out of it. Just like me, help me get out of it, as well as if you are starting to go down this path, how to keep your eyes open, so that you don't fall into the same traps as a lot of us have. And so for example, a lot of my businesses have accounts receivables that are in arrears. Like, we do work, we don't get paid for that work for a month or two, and unfortunately, we still have expenses during those two months, lag time. And so if you're a growing business, it's hard to have the capital to continue to pay all those expenses until you get your receivables in time. And so, that's great that you're growing as a business, but when you're growing, there's more risk, there's more, you know, uncertainty that conventional banks don't always lend on. And so you, as a business owner, you get a little bit desperate to find where can I get loans to bridge this gap, you know, pay payroll to all these important things. And there are some predatory lenders out there who love these types of companies, because they make a killing off killing businesses. So they're called factor factoring loans. And Nick here will be able to explain, explain in detail what those are. But I just wanted to let you guys know, from a personal experience, how terrifying this was, and I thought I was alone. But this is actually a very common spiral of downward trajectory for business owners, and it's common. So if you're in this position, please reach out to us because it's at no cost to you. And this is what we now really love to do is help these individuals, but what is a factor loan?

Nick Van Vleet – 2:07

So a factoring loan is like a loan that secured by your receivables. So they'll kind of buy your receivables from you, but then they have very high interest rates, it's all due upfront, the interest is all applied upfront. So even if you pay it off earlier, still paying 100% of interest. You don't, it's not accrued over time. Their payments are usually daily or weekly, at a minimum. So you have high interest, onerous payment terms, which means you then go get a second factoring loan to try and pay the first one. And then you're borrowing from Paul to pay Peter, or Peter to pay Paul. And that's how it starts the spiral effect going downhill from there. And it's like individuals and you know, they get these whatever title loans or these payday loans, and they're getting another payday loan to pay the first one. So similar to businesses, they fall into this trap of getting debt to deal with debt. And then the debt just gets out of control.

Harrison Rogers – 3:16

No, good point.  I keep talking about businesses, because that's, that's my experience. But on a personal level to imagine payday loans, like you were saying, auto title loans, that are just ridiculous interest rates. It's the same thing, but on a business level, they're their factoring loans. And so I guess, to put a little color and put it into picture, the factoring loans that I had on the business level, paid daily. And like Nick was saying, the the interest rate, which could be 30 to 50%. I don't know how they legally do that. Maybe you can explain, Nick, but because there is a usury law rate where you can't charge a certain amount of interest with conventional loans and whatnot, but they find a way to get around it. So 30 to 50% for like a six month loan. But it's paid daily in the front load that interests at the very beginning. So your monthly payments are amortizing that interest rate immediately, but it's paid upfront. For example, one of my loans This was four years ago almost to the almost to the day, but in this month. They can consider a certain thing a breach. If they ever feel like it's getting close to a breach so they have access to your account. They have access to your daily withdraw to make sure that they're getting their their payment.  Two weeks into this loan, it was a six month loan.  Two weeks into this loan, they came in and took all of not only their their loan amount, but their entire I'll just say 50%, cause it was like just under that 50% interest rate. So one and a half times what they what I needed to carry me through a two month bridge, not only did I not have that anymore, they took the 50% interest. So I was worse off having it after two weeks, because they considered it a breach. And I can go into exactly what they considered a breach it was by borrowing some other money. But insane. And this is very common for business owners and individuals.

Nick Van Vleet – 5:30

And the reason they're able to do that is because I said it's a loan secured by your receivables. But it's not just a receivables. It's a loan that's secured by everything that your business owns. It's like all of the business assets, your accounts, like your bank accounts, and your receivables, and your equipment and your tools and everything.

Harrison Rogers – 5:50

So your firstborn child. Yeah, like who knows what they'll come in and take. Desperate, if I would have known Nick or Emily, who's awesome behind the camera right now, I would have been able to get out of this hole much sooner. And that's what we want to be here for for you guys. Like we want to be able to not only help you guys get out, but then moving forward help people help prevent people from even getting in this position. For example, the problem that I was coming up with a few years ago was receiving my accounts, receivables timely. And if you're not getting paid, of course, you can't pay your bills. And so there's there's kind of a two prong approach here that business owners or individuals who are just continuing in their spiral of accruing more and more interest by having to borrow more loans to pay previous loans. It's a dark place, it's a scary place. But there is light at the end of the tunnel. We're here to help. And so please reach out with anything, there's no, there's no fee to for us to evaluate your situation. So please reach out. There's no obligation, there's no commitment, we're just really wanting people to not be in that dark place.

Nick Van Vleet – 7:02

And then And typically, we're able to settle for 30 to 70% of the balance that you owe. So that's a huge discount, huge difference between paying $100,000 versus 30 to $70,000. I mean, you can make a difference between surviving the next day or having to do bankruptcy. I mean, I can do bankruptcies too. But now our focus is avoiding that. So yeah, call us we can help you. And it's fee for success. So if we don't get you a result that is beneficial to you. There's no fee to it. So free consultation and no obligation upfront.

Harrison Rogers – 7:40

And like you were saying too not only is the balance negotiated to be lower, if we if you need in order to survive and succeed, the terms for like the length of payment, we can help negotiate as well, right? So not a week, right 30 to 70% of what's owed. It can be paid over a year or two rather than two weeks. It was nuts.  So please reach out, excited to help as many as we can. And we'll talk to you soon.