The Truth About Merchant Cash Advances, Business Loans, and Real Estate Funding

Darrell Hornbacher (00:00)
He paid us and walked away. Two days later, and I’ll tear up on this. two days later, my one of the partners at minus walks in, he’s like, Darrell, you gotta hear this. And he turns it on and it’s I telling him, You saved my family, because my wife was gonna leave me. You saved my business, which gave me which I would have had nothing. You saved my marriage and you saved my life.

If you told me no, you were the ninth person that I called. And if you would have told me no, I had a Glock on my desk and I was gonna swallow it.

Michelle Tack (02:09)
Welcome to Real Estate Pros Podcast. I am Michelle Tack. I am your host for today. We’ve got a great operator here, Darrell Hornbacher. Darrell, welcome to the team. We appreciate you being here. Before I turn it over to you, one of the things I thought was really interesting about your background in ⁓ financial lending, ⁓ you know, hard lending, is the history that you’ve had and seen over a period of time. But the

level of deals that you’ve done recently in terms of size, but you’re trying to also be in in, you know, have integrity with that. Can you talk to those that may not come from, you know, the hard lending space or the lending space at all, you know, at all, what your business is and what markets you serve.

Darrell Hornbacher (02:55)
Sure. So ⁓ we operate or I was the founder of what is today the oldest unsecured business loan brokerage in the nation. ⁓ 22 years in counting, and that alone in this ⁓ sea of sharks is a pretty big accomplishment as far as I’m concerned. What I’m more proud of, Michelle, is that we’ve kept our nose clean the whole time.

And you know, and if you’re in the industry or have any experience in the industry, you know exactly what I’m saying without saying it. And we’ve we’ve just we decided early on that if we were going to do this, we were gonna do it to change lives and the money would take care of itself. And in order to do it that way, you have to have a certain philosophy or a certain modicum of operation that you do things everything legitimate.

Transparent and above board.

Michelle Tack (03:49)
I appreciate that. ⁓ you know, what I was also impressed by ⁓ you’ve done some fairly large transactions recently. You’ve done a ten million dollar transaction. We’re talking about, you know, large amounts of of funding. ⁓ can you talk about about that, how you were able to secure that and how you make the operation sort of efficient around that process for people? ‘Cause that’s a you know, that’s significant types of loans for for

Darrell Hornbacher (05:02)
Sure. So we’re known as the original creator of the 0% business credit card stacking platform. If you don’t know what it is, look it up. Approximately 20% of existing SMBs use it to obtain capital. And almost 50% of entrepreneurs today and or startups use it to obtain capital. Because of who we are, we get calls.

incessantly every single day, including Sunday at 4 a.m. like this past week. But ⁓ you know, my wife wasn’t real happy about that. But we get the calls and we really in the past, up until about a year and a half ago, would stick with what we knew our unsecured lending, our credit card stacking, our loans, our personal loans, all that kind of stuff. But people kept calling me on a daily basis and says, hey Darrell,

We need to buy this property, but we don’t trust anybody we’ve talked to, but we do trust you. And that comes from, you know, reputation. That’s that’s reputation only. And so I would be passing these out to friends and and whoever in the industry. We’re, you know, we’re a big brotherhood or whatever, sisterhood. ⁓ but I would pass them out. And one day my wife says, Why aren’t why aren’t we making any money on this stuff?

I’m like, wow, you’re right. So we created a division and it it is fed. We do zero advertising. It is fed by people simply calling me on a daily basis. And in since the since a first of April, we’ve did a little over a hundred million in ⁓ business lending ⁓ for commercial real estate, fixing flips, stuff like that. We did a

$38 ⁓ piece of $38 million piece of dirt in Malibu, ⁓ middle of April. So that was a big deal. And this is a piece of dirt. Of course, it’s an expense.

Michelle Tack (07:04)
That’s expensive, right? It’s just a piece of dirt.

Darrell Hornbacher (07:06)
Yeah,

exactly. But so we did that and we’ve did a couple of owner occupied CRE type stuff. in the 10 to 15, 16 million. And you know, but I get more pleasure out of somebody calling me like a guy called me a week ago in Florida and he said, I need a hundred or nine hundred thousand dollars to buy this house and ⁓

I got I’ve got five hundred thousand. It’s a 1.4 million. I got five hundred thousand to put down, but I can’t get anybody to give me the nine hundred thousand. Well, when the story came out, he wasn’t as peaches and and cream as he led him me to believe. But the bottom line is we were able to figure it out. He was able, you know, he was ecstatic when we were done.

And I get more of that because he’s going to take this 1.5 million for $1.4 million property, the existing house on it. It’s three acres. They’re rehabbing it and turning it into a duplex. And then he’s going to put 15 multifamily doors up ⁓ with another loan that he’s in the middle of getting from us right now. But he’s building ⁓ three different.

⁓ multifamily units. And this this is a guy that retired from some some tech company down in the Miami area. And he’s like, okay, I’ve got $500,000 and that’s what I got. What can you help me do? So those are the things that excite us at the money all like you and I talked earlier, the money always takes care of itself. Do what you’re supposed to do. Do what’s right.

Michelle Tack (08:46)
That’s awesome.

Darrell Hornbacher (08:54)
And the money takes care of itself.

Michelle Tack (08:56)
I I like that the right intention. Let me ask you, you’ve been at this for a while and nothing is perfect. I don’t care if you’re Warren Buffett, what have you, can you share a learning lesson that you acquired from perhaps a deal that went sideways and a little south, ⁓ that you were either able to ⁓ you know, pivot quickly and and save, or if you weren’t able to save it, it had a a large impact on you in a positive way.

that enhanced your savviness going forward.

Darrell Hornbacher (10:03)
Two minutes or less, and I’ll give you the abridged version. Awesome. A couple of years ago, a gentleman called us. It was a Wednesday afternoon, and he needed $75,000 to cover his payroll on Friday. And he didn’t have it and he had no way to get it. And it’s late in the day, and my partner actually took the phone call. And to make a long story short, they figured out how to get him.

One of those dreaded MCAs, but an MCA with a conscience. We also figured out why he was in the position. This all happened in a 30-minute phone call. We figured out why he was in the position, which was credit. And we happened to have clean, I don’t know, 37,000 credit reports in our 22 years. And so

We figured it out. We said, okay, we’re gonna get you this money, but you gotta give us X amount back right now to clean your credit. And then in 30 days, when your credit is clean, we’re going to go and get you bigger money. We did that. We got him the money in 45 days. He was able to pay us $80,000 off. And then we got him another hundred thousand dollars to boot. That’s it. Well, I’m not, I’m not done.

Michelle Tack (11:04)
Mm-hmm.

Go ahead.

Darrell Hornbacher (11:20)
He paid us and walked away. Two days later, and I’ll tear up on this. two days later, my one of the partners at minus walks in, he’s like, Darrell, you gotta hear this. And he turns it on and it’s I telling him, You saved my family, because my wife was gonna leave me. You saved my business, which gave me which I would have had nothing. You saved my marriage and you saved my life.

If you told me no, you were the ninth person that I called. And if you would have told me no, I had a Glock on my desk and I was gonna swallow it.

Michelle Tack (11:58)
my gosh. That’s incredible.

Darrell Hornbacher (11:59)
To this to this day, this guy sends us I we get we get one deal a month from him. He lives out in Baltimore, Maryland, and his business is going crazy. But ⁓ he he sends us a deal every month. He never wants to get paid, he doesn’t want commissions, he just says, I owe you. So that’s my best story.

Michelle Tack (12:24)
That’s that’s amazing. I I you know, I d I’m speechless. ⁓ what is next on the horizon for you in terms of opportunities that you really want to capitalize on? ⁓ we talked a little bit about that before, but can you talk to that of your real focus? If I sat with you on June the ninth, next year of twenty twenty seven, and I met you where you live, and you had a cup of coffee and I said, So, how’d you do with your goals? Can you tell me what those are specifically?

Darrell Hornbacher (12:53)
Yeah. So the biggest thing as you and I have talked earlier, Michelle, is this MCA merchant cash advanced stuff. It’s just not a good business. And it’s putting more small, it’s helping some small business owners, let’s be clear. But they’re the people that are selling it are just not nice people and they’re controlled by greed. They all have greed blinders on. All of them do. And even some of my friends that are in the business have greed blinders on.

I’m like, dude, why? How many Rolexes can you buy? You know, and so on and so on and so forth. And ⁓ so it’s all about the fees and the rates that they charge are approaching a hundred percent APR. Think about borrowing a dollar and it’s the last dollar you have, and you’re scraping up to pay it back, and the people want two dollars next week.

It’s ridiculous. And they take the money out of your ⁓ out of your bank account. They don’t ask you. You’ve already signed off your rights to that. They just go take it. So our goal, and if you go look on my LinkedIn and look at all the articles, and I post articles almost daily, if if you go look, you’ll see that we’re trying to create in our little corner of the world what I call is an MCA with a conscience.

There’s no reason that somebody needs to make 49% on your money for six six months. They’ll happily pay 18% over six months. So that’s still 36% APR is a pretty good return on your money. And they’ll everybody should be happy. So we’re really publicized.

Michelle Tack (14:20)
Mm-hmm, mm-hmm.

Darrell Hornbacher (14:37)
publicizing, we’re going all out at it. We’re going after the the chief culprits and we’re just saying, hey, there’s that guy over there. Who do you want to believe? Him or me? Right. Look at his credentials. Look at my credentials. You tell me who should win. That’s it.

Michelle Tack (14:54)
One last ⁓ question. We touched on it a little bit earlier, ⁓ but I wanted to ask you this ⁓ about your network. I know that you do you’re going out right now, you’re gonna be speaking at an event. I know that you mentioned that your wife prefers to do the handshakes, but can you ⁓ tell me a little bit of the things that you are doing in terms of networking?

Darrell Hornbacher (15:56)
⁓ we have a social media presence that’s growing by the day. my wife is I mean, I tell you how much p how much people need what we sell. Of course, my wife’s way better looking than me, so she looks you know.

Michelle Tack (16:11)
I saw her before, so I could agree.

Darrell Hornbacher (16:13)
She’s gonna open doors that I can’t. Let’s just be clear, you know. And I’m a pretty cool dude. But bottom line is is that we we are spending a lot of time in social media when she started it. She did ⁓ what is she had twenty six thousand TikTok followers in five weeks, which is under what in five weeks, and then she decided that she wanted to retire and be a mom.

Which I’m surprised my little one hasn’t run in here. It’s school’s off. She’s almost seven, but she wanted to be a mom for a couple of years. Now she’s back. And you’re gonna see some really fun, you know, ⁓ things going on from Midas that are you’ve gotta look at this with some semblance of comedic relief, in my opinion. It’s way too serious, and we have found that if we take

Like with my guy with the Glock, we just took that right out. You know, you you we’re taking it out. Right. And so we’re we’re just gonna spend a lot of time social media as much as I don’t like it. You saw my wife had to change the screen for me. I don’t like any of that stuff. I do like LinkedIn and I’m on LinkedIn all the time. and but it’s it’s just

It’s a lot of noise and and what scares me is a lot of Americans, and I’m not being mean, I’m just being realistic, is a lot of Americans don’t understand how to read through the noise. And that bothers me a little bit. I’m a bit perplexed about that.

Michelle Tack (17:50)
Yeah, I I appreciate that. You’ve been a wonderful guest. ⁓ I would love and the content has been superb in terms of the types of loans, what’s happening in the market. I’m sure there’s some people that may want to get in touch with you. ⁓ they may have a need, what have you. Can you provide your contact information as well as spell it out for the folks that are listening today?

Darrell Hornbacher (18:11)
Sure. So my name is Darrell Hornbacher, and that’s D-A-R-R-E-L-L H O R N B A C H E R. Yes, I am 100% Kraut. ⁓ my phone number is 303-513-8664. That’s 303-513-8664. Yes, it is a Denver number, but is where I started the company. I now reside in the sunshine state of Phoenix, Arizona.

And my email address is Darrell double R, double L at Midas, like King Midas, M-I-D-A-S, and then a hyphen, and then financial F-I-N-A-N-C-I-A-L dot com. Soon to be Midas Finco, but we haven’t got that far yet. but Darrell with two Rs and two L’s at Midas-financial.com. I talk to everyone, I listen to everyone.

Everyone has a story. I love to tell stories, but more than tell them, I like to listen to them. And I’ll listen to your story and I’ll tell you might not like what I have to say, but you can take it to the bank.

Michelle Tack (19:21)
You’ve been wonderful for our subscribers. I hope you enjoyed ⁓ the wonderful content today from Darrell. And for those that have not subscribed as yet, we would ask if you found ⁓ you know, ⁓ this valuable as well, go ahead. We continue to provide great content. And Darrell, thank you very much and great success, ⁓ continued success in the future.

Darrell Hornbacher (19:41)
Thank you, I appreciate you.