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  1. #1
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    It's Time To Rein In Shady Small Business Loan Brokers

    Anybody see this article? Thoughts and comments...

    http://www.forbes.com/sites/groupthi...hady-small-bus

  2. #2
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    Dead link. At least when I click on it from mobile.
    Mark S.
    Simply
    (646) 661-2300
    Mark@simplymca.com
    www.simplymca.com

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    Dead Link. I guess that's a good thing...

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    Quote Originally Posted by bizcash View Post
    Anybody see this article? Thoughts and comments...
    GUEST POST WRITTEN BY:

    Brayden McCarthy
    Head of Strategy at Fundera, an online marketplace that connects small businesses with financing.


    Written by some tool that wants to bash the rest of the industry while playing up that his company, Fundera (never heard of them), is on the up and up with only 'reputable' lenders with 'non-predatory' marketing techniques.

    My opinion is that this guy can take his Forbes article, roll it up real tight, and...well, you know the rest...

  6. #6
    hahahahaha...i am literally laughing out loud!!!

  7. #7
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    Time Out! Okay- Now, I agree with some brokers being shady (as does everyone) BUT Let's define a REAL Brokers responsibility. A Brokers main responsibility and the only way they make money is to assist the lender that they are working for in finding deals that fit their criteria. Brokers market for the big guys and in return bring business and receive commission. Money is expensive all together. The money that companies lend cost them money too... so the price and mark up isn't only the fault of a broker.

    Yes, some online lenders do not take brokers... but has there been an article comparing those small business advance/loan company #s vs. those companies who are still reputable that take brokers? I would really love to see all aspects of how being a broker or taking brokers is a bad thing.

  8. #8
    The article seemed to leave out that the cost of origination has absolutely gone off the charts in the past few years and in most cases the broker does not make any money on a deal till a deal renews.

    This article refers to large lenders going direct and cutting off most of their brokers.

    The large lender they are referring to is Ondeck and the main reason the cost of marketing has gone off the charts is because Ondeck has outbid everyone else out there by 20-30% per click.

  9. #9
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    Quote Originally Posted by isaacdstern View Post
    The article seemed to leave out that the cost of origination has absolutely gone off the charts in the past few years and in most cases the broker does not make any money on a deal till a deal renews.

    This article refers to large lenders going direct and cutting off most of their brokers.

    The large lender they are referring to is Ondeck and the main reason the cost of marketing has gone off the charts is because Ondeck has outbid everyone else out there by 20-30% per click.
    This is interesting Isaac. What do you mean that OD has outbid everyone? Are you talking about Google AD Words?

  10. #10
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    Google Adwords is not a cost effective option for most funders and ISOs. You're better off spending on a call center.

  11. #11
    Quote Originally Posted by FUNd View Post
    GUEST POST WRITTEN BY:

    Brayden McCarthy
    Head of Strategy at Fundera, an online marketplace that connects small businesses with financing.


    Written by some tool that wants to bash the rest of the industry while playing up that his company, Fundera (never heard of them), is on the up and up with only 'reputable' lenders with 'non-predatory' marketing techniques.

    My opinion is that this guy can take his Forbes article, roll it up real tight, and...well, you know the rest...
    Funny thing about those guys is they are peddling the "high rates" that they are speaking about. Irony at its finest

  12. #12
    Veteran Reputation points: 134971 Chambo's Avatar
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    Quote Originally Posted by AmandaSource1 View Post
    Time Out! Okay- Now, I agree with some brokers being shady (as does everyone) BUT Let's define a REAL Brokers responsibility. A Brokers main responsibility and the only way they make money is to assist the lender that they are working for in finding deals that fit their criteria. Brokers market for the big guys and in return bring business and receive commission. Money is expensive all together. The money that companies lend cost them money too... so the price and mark up isn't only the fault of a broker.

    Yes, some online lenders do not take brokers... but has there been an article comparing those small business advance/loan company #s vs. those companies who are still reputable that take brokers? I would really love to see all aspects of how being a broker or taking brokers is a bad thing.
    The article is talking about the additional fees that are tacked on...

  13. #13
    Veteran Reputation points: 134971 Chambo's Avatar
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    Quote Originally Posted by isaacdstern View Post
    The article seemed to leave out that the cost of origination has absolutely gone off the charts in the past few years and in most cases the broker does not make any money on a deal till a deal renews.

    This article refers to large lenders going direct and cutting off most of their brokers.

    The large lender they are referring to is Ondeck and the main reason the cost of marketing has gone off the charts is because Ondeck has outbid everyone else out there by 20-30% per click.
    Isaac, problem is...nobody gives a rat's ass about the "cost of origination" they didn't when they cried about SBA loans drying up with commercial banks, and they sure as hell don't care about all these alternative lenders

  14. #14
    Veteran Reputation points: 134971 Chambo's Avatar
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    Nearly every other consumer product sold in America has passed basic safety regulations well in advance of reaching store shelves, so why don’t business owners deserve the same protection when looking for a loan? Until action is taken to bring transparency to the small business loan process, business owners—and, indeed, many good lenders—will remain at the mercy of unscrupulous brokers. Better oversight could keep small business owners safe from some of the most egregious traps, and make sure that as the alternative lending industry matures, predatory brokers don’t lead us down the wrong path.

    Yikes! where have we heard THIS rant before?

  15. #15
    A forum user Reputation points: 2147483647 Sean Cash's Avatar
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    I find it silly to charge for services less than your cost, run a big loss, and then call everyone else predatory. I know the guys at Fundera have good intentions but I disagree with the strategy. There are a few companies adopting this counterproductive model:

    Lose money while lashing out at everyone else that is sustainable or profitable.

    Even worse, they plead with regulators to attack their competitors, half hoping that one day the government will wipe away their competitors to pave the way for them. That's not how that scenario would play out.

    If your business model's success depends on poking the government with a stick to kill your competition, then perhaps you should go back to the drawing board. My comments aren't pointed at Fundera directly but since there seems to be a theme lately of startups using news media blog sites to disparage competitors that have working models and are succeeding, I feel it's necessary to say that they are just hurting themselves in the long run.

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    But it also focuses on Brokers as a whole. I don't completely agree with fees unless they have to do with UW Fees or Legal Fees that are fully explained.

  17. #17
    Senior Member Reputation points: 983 Joseph Esparza's Avatar
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    Bravo Sean, that was a well structured argument with a perfectly timed backstage exist.
    Joe Esparza
    FUNDKITE
    "FinTech High-Risk Funding Table"
    joseph.e@fundkite.com | 929.999.2700x1008

  18. #18
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    Fundera hates me. Threw a fit that "I got more play" in a piece Bloomberg wrote where we were both mentioned. When I saw they PUBLICLY stated they turned 200 leads into 9 deals - I got to salivating.

    I chuckled because they should be thanking me for being so gracious in helping their PR cause. No me. No them. No piece.

    Nonetheless. We've cracked the lead code. Merchants rejoice! Lower rates soon!

    Our Friends of Buynance initiative produces app, statements, DL, lease, voided check - for $100 - automated... That's just the surface.

    If there is any doubt that I'm the best business funding marketing mind breathing - All doubt will be erased soon.

    Bring it on Harvard Boy.
    Last edited by JayBallentine; 09-18-2014 at 06:40 PM.

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    Quote Originally Posted by JayBallentine View Post

    If there is any doubt that I'm the best business funding marketing mind breathing - All doubt will be erased soon.

    Bring it on Harvard Boy.

    I'm originating deals at a cost of $267 per $23,000 funded Jay. To be the best, you have to beat that.

  20. #20
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    The information being puked out by a lot of the people on this site is far worse than what that clown wrote.

    "We've cracked the lead code"

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA. What a load. If you cracked the code then grow up and close the deals. If you truly care about merchant rates as you claim, save them from having to spend that whopping $100 to be your UBER lead.

  21. #21
    quick story here...about 2 years ago we were doing our normal PPC bids at $15 per click and suddenly out of the left field the bid jumped to $20...we did our research and saw that Ondeck was driving the cost up. now the normal practice if you want to outbid someone is to jump the bid by $1 not $5... fast forward to today...the cost per click is up near $35-$40 and because of company like Ondeck it keeps rising.So back to the point of the article...the cost of marketing and origination are literally off the charts and most brokers only see profits once a deal has renewed.

    Quote Originally Posted by FUNd View Post
    This is interesting Isaac. What do you mean that OD has outbid everyone? Are you talking about Google AD Words?

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    Quote Originally Posted by isaacdstern View Post
    quick story here...about 2 years ago we were doing our normal PPC bids at $15 per click and suddenly out of the left field the bid jumped to $20...we did our research and saw that Ondeck was driving the cost up. now the normal practice if you want to outbid someone is to jump the bid by $1 not $5... fast forward to today...the cost per click is up near $35-$40 and because of company like Ondeck it keeps rising.So back to the point of the article...the cost of marketing and origination are literally off the charts and most brokers only see profits once a deal has renewed.


    Isaac, how does the cost of marketing via PPC compare with the costs of your other forms of marketing, is PPC more or less expensive?

  23. #23
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    Quote Originally Posted by Eric S View Post
    The information being puked out by a lot of the people on this site is far worse than what that clown wrote.

    "We've cracked the lead code"

    HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA. What a load. If you cracked the code then grow up and close the deals. If you truly care about merchant rates as you claim, save them from having to spend that whopping $100 to be your UBER lead.
    You could have found a more productive use of brain cells. I figured saying; "we have identified a growth hack" - a scaleable and repeatable system for generating leads wouldnt be something you would understand.

    I dumbed it down. "Cracked lead code."


    Google: Growth hacks. Sean Ellis.

    As a marketer (not closer) my job as CEO is to slot in product strategy in accordance with my strengths.

    Here is the thing. Give me a phone book and 8 hours. Sit next to me, let's make a public wager. Cause a DF traffic spike. Donate to charity. I will not lose. Ever. Sir.
    Last edited by JayBallentine; 09-19-2014 at 05:57 PM.

  24. #24
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    viking plays games, delays on payoff and gamessssss

  25. #25
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    "Here is the thing. Give me a phone book and 8 hours. Sit next to me, let's make a public wager. Cause a DF traffic spike. Donate to charity. I will not lose. Ever. Sir."

    That's a pretty bold statement.

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