In the Trenches: 4 Elements to Running a Successful Business Funding Office

When I was 22, I started as a bankcard rep in Brooklyn, New York.

I was approached by a friend who told me that businesses need financing that’s not available at banks and you can get them funded via alternative lenders using a percentage of their credit card receipts. This intrigued me and after studying the business funding industry I entered the market as a cash advance broker.

The merchant funding business has evolved over the years, where instead of withholding a percentage from credit card processing, most of the funders now use ACH as a vehicle for repayment. This expanded the market to businesses that were previously not fundable, such businesses that don’t accept credit cards.

I’ve been in the alternative business lending industry for 10 years. I’ve built multiple retail operations as well as wholesale ISO channels. I’ve seen the business from the lender perspective as well as from the broker side. The guide below is what I’ve developed over the years to help people with “cash business” ventures.

Throughout my career of training new representatives in the cash business I always ask them one question first.  “Who is our client ?” Immediately a few hands go up and the most aggressive students tell me – “the business owner that we are trying to fund.”

My answer to that is “IT DEPENDS.”

If we were the lenders and wanted to put our money to work you are correct since the merchant would be paying us directly.

In the case of our brokerage relationship, which actually represents the majority of the cash advance space, the client is the CASH ADVANCE LENDER.

A majority of the brokers conceptually don’t understand this.

The brokers’ focus is always to fund and get paid from any direction and lender period. Not understanding that key factor might hurt your client, the lender, and if your client is defaulting as a result of your aggressive salesforce you will be in trouble yourself because the client WILL NOT be able to pay you.

Finding the right lender relationships and close relationship with lenders is key.   

Before you do anything define your products and create a full product line. Reach out to the market and meet with all of the lenders (your clients) and see what their niches are and what product lines they are good at.

There are established lenders out there that have been in the space for a long time. Try to meet with major lenders and establish vendor relationships and ask them questions about what they like to do or can do that other lenders can’t.

The more vertical products you have the better before you spend a dollar in marketing or bring your product line to your salesforce. Make sure that every angle is covered and you will be able to find funding solutions. 

The best marketing channels for your unique business are the channels you know best.

If you are coming from a phone sales environment and understand telemarketing put a little team of 1-2 telemarketers together and have them call all day and give you live transfers. If your background is in the Internet space, use it to do tests much cheaper than the other folks and use your vertical knowledge of that channel.

There are lots of free resources such as Google Analytics that you could install on your website to closely monitor traffic coming from Internet sources.

I also highly recommend originating your own leads instead of buying them from the lead providers. This way you will be investing in building more value to your business since you are controlling your destiny.

I have seen scenarios where operators bought leads and with lead quality swings they catch themselves in a very bad situation and have to continue buying them until they get a new marketing strategy and execution. 

Training is extremely time consuming and something we all must do. The more you train your salesforce, the more results, loyalty, and appreciation you will get in return.

Ideally you would want to walk in the office and expect applications coming in left and right because you provided marketing, phones, and have a nice office but things don’t work this way. History shows that daily training with your salesforce will help you get more than 50% better conversions than simply relying on orientation training and expecting your salespeople to produce high funding conversions.

Every morning that I ran our brokerage operations, the first 30 minutes of my day was allocated to spending time with salespeople, teaching them new sales techniques, product knowledge, and rebuttals.

The times of pressure sales are gone. You need to create a consultative environment where your sales people are consultants and help business owners make the right decision about your funding programs. 

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