Millionaire NY Developer's Warning on Cash Advance

And I believe that one of the biggest problems that we have in the community today, which bothers me like nothing else, is cash advance. I mean, for you know, today it's like a drug. And kids want to make money fast, and I understand that. This is a lot of money out there. But you're losing the those you were teaching a generation how to be criminals, how to be conniving. When you're tricking someone to get money, Jew not Jew, not no way. You know, it's very simple. You know, Torah tells you don't charge interest. It says don't charge interest to a Jew. And you can have a hit there, Iska. You can have things. But why does it tell you don't charge interest? Because it wants your interest aligned. Usually, if you're more successful than the other person, the guy who's going to loan him the money, if their interest is aligned, they'll be partners in his business, take 50%, 60%. Your interest will You'll both succeed. He'll succeed. If your interest is only the your interest, and that's all you're interested in, you know, after 120, you're lucky enough to meet God, you didn't let that guy out that you loaned the money to? He's not letting you out of the grave. And this is not me, this is the Gemara I'm talking. Jeff Sutton told me that story years ago. He showed it to me from Rabbi Miller's, you know, I was like, "Interest doesn't work." You know, you you you want your interest aligned. Take 90% of his business, you'll make sure he's successful. And have you seen the movie in life, anytime people loan money for interest, the end of the day, they always get beat. They always lose the money. It always happens. That's I saw the movie. People that were the were kings in our community, the next generation came out, lost. >> So long as he has 3 months' worth of lifetime in the business, they'll lend the money. They don't care about his business, they don't care about his payroll. They care about They analyze how much blood can I suck out of him until he dies anyway? So, it has nothing to do with helping him. It's a predatory business for a reason. It's called predatory lending for a reason. It's a predator. Predator looks for prey. So, they don't care about helping him payroll. So, the guy that can't make his payroll, that's his problem. Them lending him money is not helping him. It's magnifying the problem. >> It's not a solution is what you're saying. >> It's not It's It's It's actually a more difficult death. Because if he doesn't borrow from them, he still has other options. He could still borrow from friends and family. He could still fire some people. He still has other solutions where that he could buy himself more time to give himself a better opportunity to turn things around. But this fast forwards his his demise. >> Yeah. >> This doesn't This doesn't delay his demise. This expedites it. It just looks like help. >> Yeah, but do they know what they're signing? Do you feel that that's misleading completely? Is it or they're so desperate that they don't care? They just are attached to the business emotionally or, you know, they feel like their whole life is falling apart. >> I've been I've been building businesses since I was 10 years old. I've been almost 40 years. And I can tell you that as much as a person can love their business, there's there's always going to be a red line. There's always going to be a red line. >> how much he wants to kill himself. >> And you know, yes, put everything into it, but there's always a red line. >> Right. >> At the same token, a person that can start a business is also a person that can understand how, you know, what's what's really his risk reward on things. So, when they're signing these documents, there's no way that they ever really understand what they're signing because no one would would sign this if they knew what's going to be the end. >> Right. So, walk us through, let's say someone wants a half a dollars. >> Right. >> What is he signing over there? How does the interest uh work? And how does he look 6 months down the road? >> He was struggling from So he's already he's already Yeah. >> Yeah, he's already being misled from day one because nine out of 10 times the person that he's talking to is not giving him his real name. So, Shalom is now uh you know uh Steve. Okay? So, already we're starting with, you know, different He's not talking to the right people. And then sometimes Shalom pretends to be two or three people. He pretends to be Steve, but then he pretends to be Steve's supervisor Joe. You know, why? Because the whole thing is a lie from the beginning. I have training video I have training uh recordings that people gave me uh that uh they got working in this business. Literally, they teach the people to lie from the first second. Secondly, on the paperwork, many times you'll find something where they say something like 9% recovery rate. Now, this 9% recovery rate is to mislead the customer to think that number one, there are a uh they're a company that's trying to collect receivables, like they present themselves, which is not. And number two, to present as if it's 9% rate. It's not 9% rate. You know what that 9% is worth? Zero. It's the same thing as putting a picture of Pikachu on the paperwork. That 9% has no value whatsoever. That number that recovery rate is not even advertising. It's literally worthless. It's just purely to mislead. And it's very common on those paperworks. Secondly, when they do present the rate at some point or another, they show it as a daily rate, which the average person does not understand, even if he's a businessman, does not understand because no bank tells you we're going to charge you 0.2% per day. No, they tell you we'll charge you 14% a year, we'll charge you 28% a year if it's a credit card. that's what, you know, they give you annual percentage rate. That's the normal thing that you have to do by law. But the merchant cash advance business misleads by saying, "No, we're going to charge you 1.6%." So, even the guy looks 1.6, okay, so 1.6%, that's pretty good rate. Wow, it's even better than my bank. Or in the best case scenario, the guy says, "You know what? Oh, it's a 1.6, so if I times that by 12, so yeah, it's more or less like a credit card." He doesn't realize that 1.6 rate is almost 50% a month. So, he does he has no concept of what he's paying. When does he realize it? After he signs the paperwork, after he signs his business away pretty much. It's a death sentence to the business. Then, he wakes up and he realizes, "Wait, they just drafted money They took money out of my account for the rate. I just borrowed the money yesterday. Two days later, they're already taking money out." And guess what? The next day they're taking money out. There are many cases they're taking money out of the account every day, which is poison to any normal business. Cuz your main thing in any business that creates value for business is cash flow. When you're sucking out all the cash flow out of the business, you're killing the business. >> You're out. >> So, now they're taking money every day and he can't stop it. He complain on all he wants. Listen, "Mister, this is what you signed." "Oh, you didn't know? Okay, sorry, next time read the paperwork." So, now they're starting to take money out of his account every month. He realizes he put himself into a jam, but he's still optimistic because the guy promises him, "So, listen, don't worry, this is just our first deal to get, you know, to get our feet wet, to get to know you." You know, he's still pretending to be his friend now. "We just lent you $50,000. You have to give us $75,000 in a couple of months. That's just to get to know you, but don't worry. After you do this right, we're going to give you a We're going to refinance the loan to give you a small business loan, you know, like the you know, small business loans like the ones that the helps with and and the ones that you only pay 8% on, this is all fairy tale. This will never happen. In 3 months from now, when he doesn't have enough or he even does have enough, they say, "Listen, we can't do this more, but if I give you another 300,000 of merchant cash and you pay back $450,000 in a couple of months, then we'll get you that $3 million that you told me you wanted, the three then we'll give you that." So, the whole thing is smoke and mirrors. And all they're doing is trying to refinance him to give him a bigger loan by selling him a bigger dream that one day he's going to get that multi-million dollar investment that will never happen because they're just simply sucking more and more that they can out of his business and a sham help him if his business is not growing at at least 50% a year because at that point the demise is even faster. So, the average business cannot survive a merchant cash advance. This is the reason why more times than not they go bankrupt, more times than not they end up in lawsuits, more times than not this ends up destroying jobs, destroying the the the the guy's life. Some people have committed suicide as a result of this. Many people have lost their jobs and and one of the big things that's going to make this whole thing blow up is when the government wakes up out of the the government of America and other countries this is happening in, but mainly America's it's hurting, realizes that the economy is being destroyed silently as a result of this business because the number one thing that moves an economy, any economy, is not the Coca-Colas and the Pepsis and the Apples of the world, it's the small business. So, when you are systematically destroying small businesses in every opportunity that you can, you're destroying the economy. And this is exactly what they're doing. This is what they did in in the previous generations. And this is what's happening. And it's unfortunate that there's not enough rabbinical leaders uh you know, leaders of any kind in the Jewish community speaking against this business. And I think I'm giving everyone the cuff soot that they're not aware >> Right. >> of how evil this is, but it's becoming harder and harder for me to believe that because of what I see. >> Actually, not alone. It's called merchant cash advances. It's called MCA. >> This is one of the biggest reasons of why I hated Jews. >> Whoa, whoa, whoa. It's not alone. It's not alone. >> It's alone. Something that can lead to the next Holocaust. Now, you're going to call me extreme. You're going to call me crazy. But, if you pay attention, you'll see exactly why. >> And those are the ones that are crushing [music] you, crushing your business, taking money out of your account.