[The Cash Broker]

It is to me a somewhat complex issue. Right now we have six reps including me and my partner. For instance obviously I should get profits (override) from reps that I recommend or bring on but how is the best way to share the burden for the loss on that rep with my partner.

Any application that does not get funded cost the company money and is a loss. Now multiply that by one or two apps out of every three that don’t get funded. Think about the fact that it’s not profit just because there’s an app; even the app that’s approved.

An idea by my partner was to lean towards paying on a reps business only after “X dollars of funded business has been achieved” from the rep. However the rep wants’ higher commission when he achieves “X dollars of funded business” (and rightfully so). Quite a vicious circle don’t you think?

[CreditGuy]

Yes. Definitely discuss how much you're going to skim off your employees on a public forum. I see big things in your future.

[The Cash Broker]

well the idea is also to expound on how much a rep deserves to get paid. obv we all didn't start out as 1-man ISOs in MCA

For example, some ISOs in NYC pay 30-40% commissions and renewals with a 250 draw/no salary, I've also seen 10% comm and 400 to 600/wk. Some people invest resources and training into their telemarketers at the ground level, other offices would rather let them sink or swim from day 1 with no training while the managers and senior people are the only winners.

At one point I went from an office invested in Five9, CRM, fresh B2B leads for brand new reps, to an office that had nothing but a phonebook, old UCCs and a hand dial but they had daily meetings and trainings by smart brokers who had years of strictly MCA experience.

When you factor in training/expenses/admin/underwriters if doing inhouse funding/ what are some good guidelines as a rule of thumb? How much margin is really left over considering the massive turnover and time it takes to get productive reps is the biggest cost in starting an ISO?

[MCNetwork]

You should pay your reps whatever the market rate is. You've already given two examples so you have to pick the model that is closest to yours and pay them accordingly. Keep in mind that you'll get what you pay for. If you're skimpy with your compensation, you'll get minimal effort and high turnover. Higher compensation will give you greater effort and you have the right to crack the whip on performance. You won't have the right to run your office like a high level boiler room if you're paying your reps peanuts.

[WhoisKingsley]

I hope this helps anyone that has a start-up broker office.

The obvious points in having a sales floor is #1- Pay your reps right. If you don't, they will cheat you or leave you. That is why the turn around is so high. A lot of MCA broker companies promise the world but then don't deliver because they don't do their research (which I will break down). Draws are always good- factor in the amount that the rep will be paying for travel expenses and their phone bill. At least make the promise of that draw being stable unless the commission exceeds the amount for that week. It's hard being commission only and keeping up with bills and taking care of families (and themselves) which most are. Which leads me to point #2....

Are you bringing in the leads? Marketing leads or inbound calls should be paid a %. If that sort of lead comes from you, and is paid by you, the rep gets paid anywhere from 25-35% of that commission. If it is a UCC, the rep needs to put in more work by following up with calls, emails, and explaining the process better. Sometimes it takes up to a week to two weeks to get docs in... that's a long time to wait and having a split commission is a very good incentive. If the rep brings in their own leads by face-to-face marketing, craigslist, etc. do a 60-70% split. Sounds like a lot? Well, what are you putting into it? A lot of these "reps" can do well on their own, but rather have a team to grow with. What you provide to your reps is what you will get out of your business... which leads me to #3- The Breakdown.

Here's the breakdown- You are working for the Lender. You are a marketer and providing the initial steps and sales tactics to promote that lenders advance or loan programs. The lender provides you with spex and reselling documents for you to train your guys and let them have at it. If you are partnered with a good lender, you will notice they have niches, tiers, and buy rates. Base your commission on that. If you have a great relationship with a lender who has a workable buy rate and funds restaurants for example, (and you can get a good commission off of) give the rep an incentive like an extra % or $ amount BUT give them the tools to sell it effectively. Research and give them spexs for EVERY INDUSTRY they encounter. Your'e not going to sell chickens to a auto performance shop, right? Knowledge=Trust which makes your turnaround for loans higher which makes you and your company, more reputable and profitable.

As you for you, Mr. Manager that needs to be paid... Quantity will be a life saver. You will not only give your reps the freedom to feel that they are their "own company", but what you will offer in simple FREE research and programs that are laid out and easy to sell with make you the amount you desire. Once you become reputable and can invest more, you can have a designated admin in your office that processes inbound calls. Pay that admin a bonus incentive for processing the inbound loans and you make a bigger profit on what you already built.

It takes time but it is worth it.

[bdshaw]

Nicely done

[mcaguru]

email me bizdev@cresthillcapital.com and i will discuss a plan that will help you big time hopefully.