Quote Originally Posted by Zach View Post
There are a lot of changes looming on the horizon...


Technology is connecting merchants directly with lenders in a fast, simple fashion. Companies like fundera, buynance, and surely others are tapping into this technology to aim for volume-based market grabs (no disrespect to them, it's genius).

Originator's portfolios are being damaged by high commission payouts (CAN Capital paying 17 points up-front PLUS the funded amount on 18-month terms with a 1.24 buy rate). How long will high commissions last?

Lenders are gaining market share and word-of-mouth advertising to end users. Their marketing efforts and branding are increasing almost exponentially.

Direct mail returns are diminishing rapidly. Pieces that used to yield 1.25-2% response rates are now dwindling to 0.5-1%.

Competition is picking up. Maxing out deals and expecting to fund them is no longer the norm, unless you have a referral or a unique lead source.

Big money is buying in. Lending club goes public, CIT is buying in, Pawnee leasing starts windset capital...


The question is: is this the BEST time to be a broker... or the worst?

I think for brokers just starting now it would be tough to build a brand. If you have a broker who has been around a while and has money on the street also then chances are that broker's relationships and AR may allow him to ride along side with the big boys. I think the key is to have some skin in the game because you're right, big comms won't be here forever and if the average CPA keeps rising due to higher competition the only way to sustain is to have that AR and/or like you mentioned have some referral sources and proprietary lead sources.