Anyone familiar with loan business?

I'm willing to bet that if you book a meeting with an executive at SnapypseFi, you could convince them to create a custom arrangement that would work for your startup. A plan that would grow incrementally with your revenue or some type of arrangement that makes sense.

Whatever your profit margins are when you are a larger company, should be the same as when you're a small company right? So if you can justify paying over $20k per month later when you're bigger, that means you should be able to divide the cost into a per loan fee today. Is this inaccurate? Aren't all the costs incremental per loan?

Since they're also a startup, the CEO can do whatever he/she wants to do just like you can do whatever you want with your business. If you propose a reasonable deal, I think you have a good shot at making something happen. You sound like a motivated individual, isn't that what they want in a client? You might turn into a whale for them. Just make sure you understand their fee structure inside and out so you can propose a win win for both.

-What about simply dividing the monthly fee into a proportional per loan fee?

-Or what about a deal that defers the fees until you get funded? You would still owe them the money, so they're not losing anything. The loan business is very profitable so you shouldn't have a hard time covering basic costs like technology service fees...... But obviously you would need to have a volume that justifies the monthly fee you owe them...unless you view it like a sunk cost or initial investment in order to build out your platform. If their service is going to help you grow faster and better, that's worth something. But if their fees start there, they're clearly dealing with companies who make a lot of money which means you're also going to make a lot so it might be worth it to do whatever it takes even if you have to eat 100k. For a business that makes a lot of money, you have to be willing and prepared to spend and do whatever you have to do to.

-If all else fails, what about partnering with one of their existing customers? You compensate them to let you work under their umbrella license temporarily. If they're already paying a monthly fee, doesn't that mean it wouldn't cost them anything to let you process your loans through them temporarily? Or if there is an additional cost to them per loan, you simply cover all that. Tell them you'll cover all the legal fees and will pay their lawyer fees to ensure everything's safe for them using their own lawyers.
Which you should be able to easily build into the loan fees otherwise you wouldn't even be considering their solution. Instead of you trying to make something this happen, you want the CEO to make this happen for you. The CEO could easily find one of his customers to use for this task. As long as you're willing to pay any and all costs/fees, it doesn't affect anyone negatively. Convince the CEO to make this happen for you.

-They are the perfect match for your business, why let something like a saas fee to get in the way of a customer that night turn into whale
-Add an addendum to the contract that gives them additional protection. For example, if things don't work out, they can nullify the agreement at any time.
-Whatever their reservations are, tell them you'll do anything to remove any risk from the equation.

I just realized there are a lot of financing solutions now...you should talk with the ceo's of one that won't be a direct competitor. Or maybe find someone who knows this business on clarifyfm.com

I work in that space. SynapseFI is not a good partner.

Hi Damon,

Sounds interesting, but there is a lot to think through here. Who is taking the risk of the loan? Are you doing credit score checks for the business' customers?
To get VC money you will have to show you have a viable risk scoring model - that your default rate is industry standard or below.

Might be worthwhile to check out Splitit's IPO prospectus - https://www.splitit.com/wp-content/uploads/2018/12/1218786643_1_AUMattersReplacement-Prospectus-Splitit-Payments-Ltd.pdf

Other competitors here are https://chargeafter.com/ and https://www.divido.com/ (they are both going after the big players - not small businesses, and playing at the network part - similar to what Visa is doing, but for financing). https://www.afterpay.com/categories/all-stores is also a competitor.