[InhouseFunder]

I've heard a bunch of funders complain that their returns stink because the broker sucks out so much of the upside in a deal. Besides for whatever economics funders end up with, do brokers make a profit? After the costs of leads, overhead, call centers, competition, backdooring etc. it doesn't seem like such a profitable business.

[Showmethemoney]

I've heard a bunch of funders complain that their returns stink because the broker sucks out so much of the upside in a deal. Besides for whatever economics funders end up with, do brokers make a profit? After the costs of leads, overhead, call centers, competition, backdooring etc. it doesn't seem like such a profitable business.

yes num nuts

[fin4all]

1-3 man shops can make a great profit.

[Hedley Lamarr]

I have referral partners that offer multiple types of credit products. They are companies with anywhere from 1 to 10 employees. They offer advisory/loan brokerage for SBA, Cash Advances, Factoring, ABL, Equipment, and Commercial Real Estate. Most have deep relationships that refer them clients and in turn they have deep relationships with multiple sources of capital.
They do very well as the business is relationship driven. They do not spend a lot of capital on marketing. It is a pleasure dealing with them as they have transactions pretty buttoned-up by the time they hit my desk.

When I was an investment banker the majority of my business was relationship driven.

KH

[Michael I]

I've heard a bunch of funders complain that their returns stink because the broker sucks out so much of the upside in a deal. Besides for whatever economics funders end up with, do brokers make a profit? After the costs of leads, overhead, call centers, competition, backdooring etc. it doesn't seem like such a profitable business.

after paying reps you dont usually see a profit on the front end . But with renewals syndication that is where you become a profitable business.
You do also have those shops that do not spend money on leads where their reps barely make money and they see profit on the front end also.

[harvey]

lol are you kidding

[Nunya]

lol are you kidding

It's easy if you work both sides, right harvey?

rather work with the settlement comapnies then get an r08 and get 0

https://dailyfunder.com/showthread.p...526#post116526

[moneygreen]

Is this a joke?? Broker side is definitely more profitable and easier to get started, you can make 15% on a deal without any risk while the funder makes 30% and takes all the risk. Not saying funders dont turn a profit but rather it's easier and less risky as an ISO if you know what your doing.

[OC Funder]

Depends on scale. If you're a decent salesperson you can operate out of your living room, keep overhead low and guarantee a profit... you just won't earn very much. When you build a team your marketing budget can get out of hand quickly if you want to generate any kind of real numbers, but it gives you a chance to build a book of business that should pay off later (if your purse can survive the ramp up). Many larger shops (15+) lose money on the front end and rely on the back end to keep them black. It's like any other business... the strong survive.

[showtime44]

I've heard a bunch of funders complain that their returns stink because the broker sucks out so much of the upside in a deal. Besides for whatever economics funders end up with, do brokers make a profit? After the costs of leads, overhead, call centers, competition, backdooring etc. it doesn't seem like such a profitable business.

nope, we are only in the industry bc we like helping people. I quit my job as manager of Mcdonalds because I was looking to do something for the people. While I did take a hit on how much I make (I was up to $17.25/hr there) I feel very good about myself and wouldnt trade that feeling for all the money Mcdonalds could offer.

[mcaguru]

I can only use the ever growing long list of outgoing commissions to ISO Vendors across the country. The list is littered with 1-3 man shops in states with low overhead taking 5 digits at a time in commissions. (that's just mantis -- i can only imagine they have others paying them).

[mrmrg]

Nope. We just do it for fun.

[Atlas Financial]

what no one on here will tell you is that they probably can't afford to run adwords for 10-20k a month. it's easier for them to just shop themselves out as a funder and make "15%", but then they owe the original guy most of that, and get to keep very little. where do you think the PSF fee came from? why would a rep need to charge 5-8% if they're supposed to be making 8-12% on commission when a deal funds?

[ryan $]

I've been in this Industry since I was 19 for a reason.

There is money in it. Brokers make Money, Lenders Make Money, just in different ways.

PSF Fees are a big part of my income as a Broker. All Day. I love Rapid Especially Not charging any Fee's, they all come to me. There has been times where i do make more off of the Fee than I do off of Commission on the deal.

In my experience, Adwords for Brokers doesn't make sense, unsless you dial it in and really A&B Test and get to pinpoint accuracy. But Lenders, Adwords makes sense all day.

[ryan $]

Facebook Ads, LinkedIN, Ads work.

It Depends on your business model.

SEO Works Great, If you have the $$$.

[profunder]

if rapid finds out you charging psfs they can kick you off
i dont love working with rapid in general always decline at the 1 yard line and very slow in my experience

[ryan $]

if rapid finds out you charging psfs they can kick you off
i dont love working with rapid in general always decline at the 1 yard line and very slow in my experience

Uhmmmm.... I dont think so.... They even Let YOU Charge a PSF (Fee Padded into their contract - when their contracts have no fees) if you want to Via their Contract and Keep it.... Im pretty sure... as ive seen this.... but never done it myself.

Ive been charging PSFs on Rapid Contracts for 14 Years. I think you just have to let them know.

[ryan $]

if rapid finds out you charging psfs they can kick you off
i dont love working with rapid in general always decline at the 1 yard line and very slow in my experience

And this is just wrong.

Rapid it is true, fully underwrites when all docs contracts and stips are back, but.... if they decline it is always for a reason, which once you have a grasp on underwriting you can weed out and know rapid isnt the home for said deal.

[ryan $]

Rapid is Rapid though, If all your ducks are in a row and you put a bow on it - they fund quick. ARe they an Everest or Lendini or Vader?? (Fastest in my experience) No - But for Tier 1 Deals... THEY ARE RAPID

[RickyR3712]

what no one on here will tell you is that they probably can't afford to run adwords for 10-20k a month. it's easier for them to just shop themselves out as a funder and make "15%", but then they owe the original guy most of that, and get to keep very little. where do you think the PSF fee came from? why would a rep need to charge 5-8% if they're supposed to be making 8-12% on commission when a deal funds?

Thank god karen is gone so i can write this lol.The issue that most have is that they have 1099 and since the leads cost so much it does not work.I spend 50-100k a month in ad words and all my employees are on salaries.I did the math and based on what we fund if i will pay 20% commission,the reps will be making over 200k each.I hire people with degrees that have professional training and experience and start them at 48k salary, based on hitting different marks they get raises.Now when i average out the year and look at the salaries i am paying reps between 3-5%. i do not know how someone can do adwords and pay a rep 20-50%

[ryan $]

Thank god karen is gone so i can write this lol.The issue that most have is that they have 1099 and since the leads cost so much it does not work.I spend 50-100k a month in ad words and all my employees are on salaries.I did the math and based on what we fund if i will pay 20% commission,the reps will be making over 200k each.I hire people with degrees that have professional training and experience and start them at 48k salary, based on hitting different marks they get raises.Now when i average out the year and look at the salaries i am paying reps between 3-5%. i do not know how someone can do adwords and pay a rep 20-50%

3-5% of what? Profit on deals? With a 48k Salary yea I guess.

Ive been In this Industry for a while, Its standard.

$300 - $350 - $500 AS A DRAW for Jrs and Closers - Plus 30% Of Profit Each Deal Brings in and 50% Of Fee Sheets (Split Amongst Reps On Deals)

Commission for Telemarketer 10% Plus an Hourly
Jrs get the Draw
Closers Get The Draw

Its Up to Closer how much he breaks off Jr Closer
Closer gets 30% Telemerketer gets 10% - House gets 60% On Commission
Fee Sheets - Telemarketer 10%, 50% Split Between Jrs and Closers on Deal.

Thats How its always been.

Your getting Killed with Salaries I think.

Draw and Higher Commission fosters HUNGRY PEOPLE. BEASTS.

[ryan $]

In My experience, I want the 1099 Hardened Sales Guy, Not the guy whos comfy with a salary.

If you see the benefit in higher commission verse a salary - I WANT YOU

A Draw is so you can eat on the rare off weeks you have, which should be few and far between.


We honestly have that issue here where i work. People will not give up the hourly/salary, i think its because they dont believe in themselves, and are on that lax 9 to 5 mentality. Honestly, if i did the math on what is being funded via them, id choose hourly/salary too.

But higher commission, no hourly/salary is always the best way to go - if your a beast. And thats really the only person who should be doing this as a career.

[Hedley Lamarr]

Knock it off Karen!

[mcaguru]

Kev whose karen ?

[Hedley Lamarr]

Ha! Apparently a very successful person in Tampa. I've never done any business with her.