March/April 2014 – Issue 2

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Your Brand, Their Best Alternative

By Dale Laszig

Our nation is on the move again, thanks in no small part to the alternative financing industry that’s been helping US business owners obtain working capital.  Increased demand for financing and an influx of competing brands have made differentiation a priority for many funding professionals.  Back in the 1990’s, you would have been considered unique just by being part of the trade.  Today, as we navigate a transitioning economy and the 2010 Dodd-Frank Reform Act, a more compelling value proposition is needed to stand out in a crowded field.

WSJ article Smaller Businesses Seeking Loans Still Come Up Empty cited an independent study by Pepperdine University that revealed a 17% approval rate on loans to small and midsize businesses.  Commenting on the study, Blindbid President Michael O’Hare said, “More than three-quarters of bankers said they felt increased pressure from regulators, and 61% of those bankers reported that they have rejected loans they otherwise would have made to please the federal overseers.  Private lenders are filling that gap.”

Carving out a niche can be challenging in an industry with its own identity issues.  While public perception is changing, many people still don’t get non-bank business financing.  We’re fortunate to have advocates and volunteers working to raise awareness and move our industry forward.  Ours is a specialized field; even the way we compete is a bit more nuanced due to the interdependence of financial networks.   We may compete with someone and later the same day work together on a deal.

With these factors in mind, how would you choose to specialize in this space?  How does your value proposition differ from those of your competitors whose goals, visions, and missions are similar to yours?   We turned to some of the best in the business for advice on differentiating in our dynamic, evolving market.

Tag, you’re IT!

Why does your company exist?  What would you most want people to know about your company?  Distilling the essence of who you are and what you do into a few words is not easy.  Reflecting on these questions may provide some context for a meaningful tagline that captures mind share and positions your brand.  Here are some examples:

Blindbid: “When vendors bid, you win.”

Lendio: “Funding the American dream.”

OnDeck Capital:  “Business loans without the hurdles.”

Total Merchant Resources: “The future is ours to make.”

A compelling tagline draws the customer in and makes them want to know more.   “Every brand begins with a story and ends with a promise,” noted David Vinjamuri, author of Accidental Branding, How ordinary people build extraordinary brands.  “Whether you are an entrepreneur or a big-company marketer, it’s important to remember to tell your story and honor that promise.”

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