[bdshaw]

Why would any broker/ISO refer business to these folks?

https://www.fundastic.com/posts/254-...9#.VOX_lvnF-Sq

[Sean Cash]

Yeah who knows. Fundera published something like that recently too on Forbes.

Fundastic says:
"We highly recommend that after your research, you go to the lenders directly."

This is terrible advice and practically the reason why there is so much disruption in the lending space already. The futility of applying from one lender to the next to the next, hoping to find one that works in a timely manner is why the industry of platforms and brokers exploded.

They also say:
"You might wonder if there are good business loan brokers around who will act on behalf of business owners' interest and put their own interest a lower priority. It's possible but it's really hard to verify. I would be skeptical of loan brokers who claim that without any clear proof. "

This is a weird message. It's like saying, Everyone is evil and those who don't seem evil are probably evil

------

Some critics convince themselves that the lowest rate is all any business wants. They can't imagine that things like speed, customer service, or relationships matter. They belittle business owners by telling them they don't understand the math, that they're incapable of negotiating something that works for them, and that they're too naive to understand that the person they're dealing with is also trying to make money and stay in business just like them. You idiot, brokers are evil! Don't you understand the math fool?!

Insulting your potential customer, trashing your competition, and telling them they're better off spending hours, days, weeks, or months of research and then applying directly to lenders that might not even be suited to their needs is apparently being employed as a marketing strategy these days.

Good luck

[GoodCustomerService]

Well said, Sir.

[WhoisKingsley]

While I appreciate their transparency, It is funny that they are brokers themselves. This clever directory of lenders with just enough information for merchants to apply on their own is brilliant. I am all for giving people what they want but I would like to know how "Fundtastic" makes their money.

[Funder Mark]

Sean,

Didn't you once write a post about a merchant choosing an offer that was more expensive then yours, simply because the rep had built up a better relationship with the merchant? It really just proves your point even more. And more then that, how is a merchant who is busy working supposed to know the best funders to apply to? Is every merchant supposed to handle his own plumbing, electricity, accounting, AND his financing? Its about finding the right person for each job!

[WhoisKingsley]

I think the best answer to anyone "Bashing" brokers is they are never going away. Just like insurance brokers- there is always going to be a customer that wants all of their Options laid out for them. There are HUNDREDS if not thousands of lenders in this industry and a quarter of them are "Good" ones. We need brokers that can sift this out for the merchant and provide that service!

Unfortunately... the ones who broker just don't get it.

[Sean Cash]

Sean,

Didn't you once write a post about a merchant choosing an offer that was more expensive then yours, simply because the rep had built up a better relationship with the merchant? It really just proves your point even more. And more then that, how is a merchant who is busy working supposed to know the best funders to apply to? Is every merchant supposed to handle his own plumbing, electricity, accounting, AND his financing? Its about finding the right person for each job!

Yup, I wrote that recently actually. My background is in accounting so I remember when I first got into sales I thought it was all about numbers only. The terms have their place of course but every customer is different. I know some reps that text message with their clients on a daily basis even after the deal is funded. You're not going to get that level of service from an automated platform where you can't even talk to anyone on the phone.

When I moved from Long Island to the city years ago, I hired a broker to find me an apartment because I needed a place RIGHT AWAY. Because of this I signed a lease and had a key in my hand within 36 hours. Maybe the broker didn't show me their best inventory, maybe the broker charged me more than the market price. It really didn't matter because I got what I wanted. Isn't that what business is about? If I didn't like what they showed me or their fee was more than I could afford, I can just say "no."

Years later when I was moving again, I didn't use a broker and it took me 6 weeks to land a place. There were a ton of headaches along the way. It was like working a full time job.

Would I use a broker again in the future if I needed a place quickly? Absolutely.

[stat]

Sean,

Didn't you once write a post about a merchant choosing an offer that was more expensive then yours, simply because the rep had built up a better relationship with the merchant? It really just proves your point even more. And more then that, how is a merchant who is busy working supposed to know the best funders to apply to? Is every merchant supposed to handle his own plumbing, electricity, accounting, AND his financing? Its about finding the right person for each job!

My thoughts exactly; leave it to the professionals. Merchants can spend time researching this for weeks, have their credit pulled by every lender out there and still end up with a C paper lender when they could have qualified for an A paper deal; all while they could have spent that time doing what they do best and growing their business.

I agree with the notion that a good broker is challenging to find, but so is a good accountant, plumber and any other service professional...

[jmccready]

Well said Amanda. These "industry watchdog" pieces always seem to bubble up to the top and don't seem to have much effect. A good broker will build strong relationships with wise business owners that do their own homework when looking for capital, but lack the time to shop and need $$$ fast. Good customer service is essential to these relationships as we all know. Many of our brokers have deep long-standing relationships with their borrowers. But you're right, some brokers don't get it.

[jotucker1983]

I agree with everyone here, I think it's just another marketing ploy to promote merchants into "going direct" instead of working with a trustworthy broker.

When you are dealing with a complex situation of many direct lenders with various forms of underwriting criteria and rates, a "competent" broker that's both experienced and resourceful would be your best bet in finding the best overall deal while minimizing the time spent in the process.

The best overall deal might not be the lowest factor, the best deal looks at the entire process of having the approval amount required, payback cycle required, holdback/fixed payment that one can handle, customer service procedures in place, as well as how the lender handles your renewal/reload (bypassing the double dip).

There's no way a merchant can configure this externally from reviewing a lender's website, this is information that insiders maintain which is why a broker makes more sense. In addition, with updates to the industry, there shouldn't be brokers out here changing additional fees to the loan products anyway, so the old argument of avoiding the middle man to "save money" shouldn't apply in this situation.

Now with that being said, finding an actual trustworthy broker that's both experienced and resourceful is the hard part lol.

[MCAVeteran]

So it's obvious some companies want to flush out the brokers- the irony here is those same companies depended on brokers to build their companies brand and build assets for later exit strategies and sales or IPOS. Now they want to come in and say brokers are evil, we don't need them. The truth is, brokers have since inception, provided hundreds of millions of dollars to companies to fund over the years and built long term revenue in renewal business. It's simply foolish to cut your customers out and think you will replicate it going direct. I bet the pendulum will swing back once they realize the cost of acquisition is simply too high not to work with brokers in some fashion. As with anything, use a vetting process for your sales channels and build your moats around solid sales partners who understand the business and have good sales practices.

[Eddie.deangelis]

I could not agree more ! The brokers aren't going anywhere and the lenders trying to go direct will all swing back around once they see the acquisition cost and volume of deal flow drop that the ISOs provide ! The merchants on a whole will not benefit by attempting to go direct. For example an "A" paper merchant may end up applying at a Pearl or any other of the MANY short term high risk 3-4 month 1.45 lenders. How is that a benefit ? Do the merchant have 3 months to learn our industry and find the lender that best suits them ? The auto sales guy that will apply at 15 lenders before he will get an approval ? Or the staffing company ? Or even reverse It the high risk customer may apply at on deck, can, swift only to be declined over and over again. Going direct is like a crap shoot for a merchant 9.5 times out of 10 a broker will beat the deal and get the merchant a better deal than the merchant going direct and end result is the broker will save the merchant money !! Cuddos to the good ethical experienced brokers !!

[jotucker1983]

Just to add, I've been in the industry over 8 years now since 2007 (selling MCAs/ACH Loans specifically since very late 2009) and the trend I'm seeing is that a lot of direct lenders are trying to cut down on the number of independent brokers they serve. This might be a way to clean up the industry of bad brokers, eliminate the brokers that have high default clients, etc.

There are also a number of large direct lenders that are putting minimum new deal counts on brokers and I also believe this is a provision being used to weed out some of the smaller broker offices.

So while us good brokers do strive to provide value to this industry, I think that as we continue to go forward the industry is going to be changing. Unless you are already "in" then it might be a little hard to break "in" with a direct broker-lender relationship at a lot of the larger lenders, causing many of the new brokers to work for a Broker.

[AMERICApital1]

Just read a nasty article by them talking about how its a needle in a haystack to find a loan broker that has the business owners interest in mind. THEY ARE AN ISO! I can't believe they are getting away with this....slandering brokers to get more business...but in this industry, that's far from an all time low unfortunately.

[admin]

merged with the existing thread.