[Zach]

if you hit the bonuses bfs is 18 points , everest is 17 points and a lot more like them that dont advertise on the site . thats why it cracks me up with these new lenders funding suckers to send them deals paying only 5-8 percent .

For most products I agree, although some people have a unique product which makes sense for them to pay less.

-LoanMe offers a 10-year term with no prepay penalty and a monthly
-Yellowstone will approve higher-risk merchants than pretty much anyone else
-Fundingcircle/Fundation/Dealstruck have longer terms with lower rates and monthly payments

Now, as far as the traditional ACH product goes for A, B, and C paper deals, by all means (in my opinion) you can easily average 8+ points. We've had reps that average 14-15 points.

In fact, I've found two varying philosophies on maximizing brokered commissions:

1. Sell the maximum commission on every deal and focus on max GM
2. Sell the most competitive rate the client can get (note: not necessarily low points) and focus on relationship/renewal

I've had reps that utilize both methods, and I've seen both methods produce wealth at different brokerages. On average, I find that "maxing out" deals tends to produce more income in the long run, but that is also my personal experience. I am sure other people, like John Tucker, have an awesome renewal pipeline that we would all envy (for minimal work!).

I think it's important to teach new reps to max out deals so they get comfortable selling 15-20 point commissions. Once they are comfortable you can discuss strategy further with them, but many reps can't get past the sticking point of discomfort selling a deal with $10-30K of GM on the line.

[Zach]

For most products I agree, although some people have a unique product which makes sense for them to pay less.

-LoanMe offers a 10-year term with no prepay penalty and a monthly
-Yellowstone will approve higher-risk merchants than pretty much anyone else
-Fundingcircle/Fundation/Dealstruck have longer terms with lower rates and monthly payments

Now, as far as the traditional ACH product goes for A, B, and C paper deals, by all means (in my opinion) you can easily average 8+ points. We've had reps that average 14-15 points.

In fact, I've found two varying philosophies on maximizing brokered commissions:

1. Sell the maximum commission on every deal and focus on max GM
2. Sell the most competitive rate the client can get (note: not necessarily low points) and focus on relationship/renewal

I've had reps that utilize both methods, and I've seen both methods produce wealth at different brokerages. On average, I find that "maxing out" deals tends to produce more income in the long run, but that is also my personal experience. I am sure other people, like John Tucker, have an awesome renewal pipeline that we would all envy (for minimal work!).

I personally think that by simply being cognizant of the client's options is the most valuable tool a salesperson can have. This, of course, requires knowledge of what other offers the client has access to, but if you know his next best buy-rate is a 1.25 and you have a 1.18, you can probably put 12 points in the deal and feel safe about it.

I think it's important to teach new reps to max out deals so they get comfortable selling 15-20 point commissions. Once they are comfortable you can discuss strategy further with them, but many reps can't get past the sticking point of discomfort selling a deal with $10-30K of GM on the line.

[MCNetwork]

I found that the salespeople working for larger organizations follow philosophy #1 and the smaller independent guys follow philosophy #2. This is because the independent agents have to rely more on renewal income than employed salespeople who are given a steady diet of new deals.

[TheShitzuofMCA]

Right, I've found most will balance the two out. Depending on how smart the merchant is and what they are looking for, sometimes in order to close the deal you have to go with whats best for merchant (if they wont budge) not the brokers pocket. Although what the merchant doesn't know wont hurt him is another philosophy. lol

[TheShitzuofMCA]

thanks for the article, this is the dream of almost everyone who opens an MCA. One day selling for big bucks getting out of the business. I guess good for Abe...

[jotucker1983]

What I have always done is price deals based on the risk category they fall in, that's why my commission ranges 2% - 5%.

It's not about selling the lowest rate, that's not my focus, I sell an entire working capital solution which includes the fact that (most of the time) we can help build their business credit, the fact that our product works "similar" to a line of credit with the way the reload procedure works, and the growth aspects of using our capital in terms of the investment components.

In terms of lender placement, I'm going to do pre-qualification on the client and A+ Paper goes to an A+ Paper Lender, A Paper goes to an A Paper Lender, B/C Paper goes to the B/C Paper Lender, and C/D Paper goes to the C/D Paper Lender. E Paper I don't entertain.

Sure, I could take the A Paper and send him to the B/C lender, so instead of making 2% - 5%, I could pull about 8% - 10% due to the mark-up. But is that putting my client first or is that putting John Tucker first? To be honest with you guys, I love seeing competitors do this because it becomes that much easier for me to steal the client away lol.

I don't believe a guy that qualifies for a A+ deal should be placed at a C/D Lender (or priced at C/D Lender pricing) just so you can make 10% - 15% commission. But that's just how I operate.

[J.Celifarco]

What I have always done is price deals based on the risk category they fall in, that's why my commission ranges 2% - 5%.

It's not about selling the lowest rate, that's not my focus, I sell an entire working capital solution which includes the fact that (most of the time) we can help build their business credit, the fact that our product works "similar" to a line of credit with the way the reload procedure works, and the growth aspects of using our capital in terms of the investment components.

In terms of lender placement, I'm going to do pre-qualification on the client and A+ Paper goes to an A+ Paper Lender, A Paper goes to an A Paper Lender, B/C Paper goes to the B/C Paper Lender, and C/D Paper goes to the C/D Paper Lender. E Paper I don't entertain.

Sure, I could take the A Paper and send him to the B/C lender, so instead of making 2% - 5%, I could pull about 8% - 10% due to the mark-up. But is that putting my client first or is that putting John Tucker first? To be honest with you guys, I love seeing competitors do this because it becomes that much easier for me to steal the client away lol.

I don't believe a guy that qualifies for a A+ deal should be placed at a C/D Lender (or priced at C/D Lender pricing) just so you can make 10% - 15% commission. But that's just how I operate.

well that depends on what you consider an "A" lender there are lenders I consider a A lender where you can still make 8-12 points or more

[mcaguru]

I have a lot of respect for Bloomberg Publications it just seems like the article was more fit for a tabloid or the rolling stones! Typically they cover the cleverness of a business strategy seems a little off target for Bloomberg.

[FUNd]

What I have always done is price deals based on the risk category they fall in, that's why my commission ranges 2% - 5%.

It's not about selling the lowest rate, that's not my focus, I sell an entire working capital solution which includes the fact that (most of the time) we can help build their business credit, the fact that our product works "similar" to a line of credit with the way the reload procedure works, and the growth aspects of using our capital in terms of the investment components.

In terms of lender placement, I'm going to do pre-qualification on the client and A+ Paper goes to an A+ Paper Lender, A Paper goes to an A Paper Lender, B/C Paper goes to the B/C Paper Lender, and C/D Paper goes to the C/D Paper Lender. E Paper I don't entertain.

Sure, I could take the A Paper and send him to the B/C lender, so instead of making 2% - 5%, I could pull about 8% - 10% due to the mark-up. But is that putting my client first or is that putting John Tucker first? To be honest with you guys, I love seeing competitors do this because it becomes that much easier for me to steal the client away lol.

I don't believe a guy that qualifies for a A+ deal should be placed at a C/D Lender (or priced at C/D Lender pricing) just so you can make 10% - 15% commission. But that's just how I operate.

John, I understand why you can charge 5 points and make a living, you don't split your take with the house. You are the house. When you're another kid in a call center with a 2K draw making 10%, you need to charge 20 points to scratch out a commission check. Sounds like you're actually a consultant and not an order taker or another predatory bottom-feeder looking to mop up every last dime of someone's monthly deposits.

No need to justify yourself. MCA is about 25% of my business, and some of the bank statements I see that have outstanding advances, horrendous. Sad, really. Deposits of $75K and ending balances of $6.75. Some lenders in the space have no problem jeopardizing someone's company, their employees, and their families to make "20 points".

Personally, I'd rather eat out of a trash can, than lie, cheat, steal, and put people out of business. But then again, I think I may be the black sheep of the MCA biz, too.

[AlexSMF]

I have to agree with Alex.. These are not stupid guys, they had to know how any article about them and how they are now living would make the industry look. Apparently they are out and no longer care how the industry is perceived or what effect this can have on those of us are are still doing this. You would think they would have a little more care for an industry that apparently treated them very very well

What is funny is how this reporter accuses them of making their fortunes by taking advantage of others. Funny how people throw rocks in glass houses. Is this reporter not making a name for himself by exploiting other by making out 2 individuals plus arguably the industry seem like a bunch of loan sharks? What he did is absolutely no different than what he is accusing them of doing. In any case, I still stand by the fact that inviting a reporter to your home and divulging your rags to riches story while expecting him to write some wonderful piece about you is naive at the very best. Lets hope they don't blow through their money too quickly.

[Mmarano]

The Article is Bull**** in my opinion. Meir hired me and gave me a shot. Today i own a direct lender and an iso with 30 people - I'm living the dream. Its the same thing when people complain about DG over at YSC, guy gave me a shot along with Isaac and I made more money than i could've dreamed of at that time. Sp my hats off to all the success stories in this little business of ours. "this thing of ours'

What they don't tell you in the article is how many people Meir actually put on. He allowed lots of people to eat and gave people chances to live well regardless of your backround or experience. I get why people are mad, but if you were there at the time, you had respect for him. He could be ruthless and no doubt, the practices that some of the brokers/managers developed were questionable, but that wasn't the entirety of what went on at 2nd Source. I think they're trying to portray some kind of bootleg Wolf of Wall Street story. It's partly true, but the ruthlessness and shadiness wasn't all there was too it. Some people got rich and some people were left with nothing. It's all how you played the cards you were dealt. This isn't limited to the cash advance industry, this is business period.

Whatever they have cooking up is their business. At the end of the day, it's not going to stop me from going after mines and it shouldn't stop anyone from going after theirs either. Merchants still need this product and I'll be damned if I left an article shake me and what I'm doing out here everyday.

[Chambo]

The Article is Bull**** in my opinion. Meir hired me and gave me a shot. Today i own a direct lender and an iso with 30 people - I'm living the dream. Its the same thing when people complain about DG over at YSC, guy gave me a shot along with Isaac and I made more money than i could've dreamed of at that time. Sp my hats off to all the success stories in this little business of ours. "this thing of ours'

Yeah, and who hooked you up and to get your accounting in order? do you even offer me a Starbucks card? I see how you do.....

[Mmarano]

My accounting, It certainly wasn't you.. We've used Gap accounting from like month 3.. That real "accounting" method. The only accounting method that matters.

Yeah, and who hooked you up and to get your accounting in order? do you even offer me a Starbucks card? I see how you do.....