[mbradford101]

(Note: I posted this message on another forum, and then found this forum, which looks like it has a lot more activity. So I'm posting the message here as well, hoping to get as much advice as possible :) I'm mentioning this so I don't have to defend myself for posting on two forums.)

Hi,

I've been involved in online businesses for a number of years, and have dabbled in the merchant processing business, but have never booked an account. I always wanted to get into the business, but because it always seemed like a cut-throat bait-and-switch type business, I never felt comfortable trying to convince a business to switch processors -- based on 'lower rates' that I'd heard repeatedly would probably be increased within months of landing the account...

But I've been reading the Greensheet for about 10 years and ISO and Agent for a few years as well, and have been drawn to the MCA business because it seems pretty straightforward and appears, at least, to be very profitable.

Years ago, I sold printing to businesses, cold-calling, following-up, and repeat-visiting about a thousand businesses until my print and copy sales were over $50,000 per month.

So I'm wondering if I could do the same thing in the MCA industry? Are there any ISOs or salespeople on the forum who built a decent income cold-calling and canvasing businesses? If so, could you share how it worked for you?

I'm also wondering what the ratios are -- how many cold-calls it takes to get a warm lead, and then how many warm leads you need to close a deal, and what the average deal size is.

Also, I'm wondering who the best MCA lenders are? In the Greensheet, I've seen quite a few (pretty convincing) ads for Capital for Merchants, which is what finally put me over the top, to take this business seriously and give it a shot. But since there are quite a few MCA lenders out there, I'm wondering if there are one or two that are considered the best by those who sell MCAs on the street.

Any advice you can share for a newbie in the industry would be appreciated.

Thanks!
Mark

-

[Finance1]

It's a numbers game for sure. One of the tough parts nowadays is competition and shopping. Expecting a full 10 points comp on every deal leads to a very low funding rate. Merchants are smarter and they will shop if they think the deal is sour no matter how good of a rapport you have.

If you're good face to face and/or on the phone you can definitely get enough leads to make some money. I would never work as an agent for a direct funder unless they are going to provide leads. By working inside for a direct funder you are seriously limited with product/price/program. Each deal has a "best" home. Different funders like different things. It's best to get set up with 5-6 funders and cover all the bases. High risk, loan programs, premium pricing, and industry types are not one size fits all.

You may want to consider finding a decent ISO that can train you. You'll have to split commissions but that's totally worth it in exchange for being trained on all the details of the industry. On the surface it looks easier or less complicated than it really is. Being efficient at identifying viable deals (chasing ghosts is a total time waster with no reward) and knowing where to place it so you don't get destroyed by competition (if you don't somebody else will likely come in do it) are probably the 2 most important things to learn as a new agent.

[funding pro]

Nothing to see here, move along...

http://www.youtube.com/watch?v=5NNOrp_83RU

On a serious note, Finance1 nailed it with this statement

You may want to consider finding a decent ISO that can train you. You'll have to split commissions but that's totally worth it in exchange for being trained on all the details of the industry. On the surface it looks easier or less complicated than it really is. Being efficient at identifying viable deals (chasing ghosts is a total time waster with no reward) and knowing where to place it so you don't get destroyed by competition (if you don't somebody else will likely come in do it) are probably the 2 most important things to learn as a new agent.

Do your research. Consider yourself the employer and your partners the employee. They have every right to interview you, but make sure you interview them just the same.

[mbradford101]

Hi Finance1, Thanks for the advice - I appreciate it. I may first try doing it on my own using the training the different MCA lenders offer. But I understand it probably is harder than it looks...

Still wondering if anyone out there has sold MCAs using door-to-door cold-calling, who can share what the typical ratios might be?

On another thread talking about cold-calling BY PHONE, I saw that MCNetwork said:

"Using a cold call approach, a good lead warmer might get 1 full application from 150-200 dials. Out of 100 full applications, you might actually fund 10-15 deals (even though you might get 30-40 approvals). If you have to pay the lead warmers an hourly wage it can be a very expensive process."

and CO1 said:

"Its not about getting in apps anymore. Its serial shoppers and the big guys trying to kill the small guys. My company in one month gets 50-60 full package but we end up funding only 25-35 at the end."

So I'm wondering if I left a flyer and business card at 100 businesses per day, what that might get me?

...Maybe a few conversations and one application, or what?

I was thinking of starting out doing this one day a week, and seeing what I could get from it. But I'd really like to have some idea of what to expect before I start.

Also, are there any important things to include on the marketing materials that businesses are looking for -- that might greatly increase the response rate?

-

[Chambo]

Oh, by the way, funding pro, I'm new here... but I wondered from your post above if you truly are a dick, or maybe just having a bad day. So I looked at your profile and saw your other recent posts, and it appears you truly are a dick. So please butt out if you don't want to offer advice. This is a forum where these kinds of questions are meant to be posted. So even as a newbie, I don't believe asking legitimate questions like this is something you should come along and say, "Hey everybody, Don't waste your time here, Ignore this stupid post," which is essentially what you said. Other newbies will likely find this thread in the future, and could benefit from it (as I will), if good answers and advice are shared from people who are experienced at selling MCAs. No offense is intended, but I don't appreciate being treated like a village idiot asking a stupid question when I know the question is legit.

-----

I don't think he was being a dick at all, but more honest and blatant than someone else might have been.

Cold Calling or Door-to-Door will get you deals, but you will put in 10-20 times the work for the same results.

I agree with the above posts. Now is not the time to come in brand new and go at it alone. You will be eaten for lunch. Your best bet is to go work for an established ISO for a while and go through the actual process on 10-20 deals first to get your beak wet.

[mbradford101]

I JUST SENT THIS PM TO funding pro, after seeing his latest post and then deleting the portion you copied from my last post:

funding pro, I had added this to the bottom of my post, and then refreshed and saw your helpful response, which made me want to forget the ABOVE. So I removed the text below, but figured you might have seen it, and might already be responding in kind. So I wanted to let you know I removed it, so we don't need to get into a pissing contest...

"Oh, by the way, funding pro, I'm new here... but I wondered from your post above if you truly are a dick, or maybe just having a bad day. So I looked at your profile and saw your other recent posts, and it appears you truly are a dick. So please butt out if you don't want to offer advice. This is a forum where these kinds of questions are meant to be posted. So even as a newbie, I don't believe asking legitimate questions like this is something you should come along and say, "Hey everybody, Don't waste your time here, Ignore this stupid post," which is essentially what you said. Other newbies will likely find this thread in the future, and could benefit from it (as I will), if good answers and advice are shared from people who are experienced at selling MCAs. No offense is intended, but I don't appreciate being treated like a village idiot asking a stupid question when I know the question is legit."

[MCNetwork]

So I'm wondering if I left a flyer and business card at 100 businesses per day, what that might get me?
-

Sore feet and no apps!

[funding pro]

If you are going door-to-door, you are going to have a very hard time converting a large number of deals. This business is a numbers game, and you simply cannot make as many "cold calls" going D2D as you can over the phone. The one big upside I tell people considering D2D sales for this product is that you have a huge advantage that anyone that calls in doesnt have. You can look at a business, identify a need for the capital and sell the owner on that specific job.

For example, walk into a run down restaurant and tell them you can get them $20k to remodel. Or maybe you will notice they have terrible exposure, ask them if you were able to get them $30k to put in a new sign, how much more business they would capture and then spend the rest on marketing, etc. Put yourself in their position, imagine what you would do if you were them and all of a sudden had an extra $20-50k in your bank account and sell them on THAT.

[funding pro]

Uhhhhh, not sure what you interpreted as being a dick. In fact, I'm pretty sure both posts I made here are more than generous for a forum where we are all essentially "in competition." What I was implying is that there are a ton of sales reps in this space so I was jokingly trying to tell YOU there is nothing to see here and to just keep on walking, I even said "on a serious note" right after that. But, in all honesty, I welcome the growth of this industry and the competitors I encounter (most days).

On a separate note, I am thrilled I could offer sage advice from my years of experience to someone who seems like they didnt deserve it in the first place. Even if I was trying to be a dick, you are going to have to be more thick skinned to make it in this industry.

[Ryan Shiroky]

Uhhhhh, not sure what you interpreted as being a dick. In fact, I'm pretty sure both posts I made here are more than generous for a forum where we are all essentially "in competition." What I was implying is that there are a ton of sales reps in this space so I was jokingly trying to tell YOU there is nothing to see here and to just keep on walking, I even said "on a serious note" right after that. But, in all honesty, I welcome the growth of this industry and the competitors I encounter (most days).

On a separate note, I am thrilled I could offer sage advice from my years of experience to someone who seems like they didnt deserve it in the first place. Even if I was trying to be a dick, you are going to have to be more thick skinned to make it in this industry.

Here here!!! 100% if you dont have stone skin, you will either let the express 2 train run you over or cry yourself to sleep at night...

As for boarding with funders, I think its better to have (in the beginning) 2 or 3 for each type of deal (good, bad and ugly) and see who will give you the most favorable pricing/dollar amounts just to weed out those funders that will offer 1.55 factors while the other guys are doing a 1.42 all day for the same ugly file. Funding Pro, I am sure you know of whom I speak... :/

[HollyH]

Hello ya'll...

I'm new to the MCA field. I'm not really in it yet, but am seriously considering it. I get that I can be considered competition and such...

I've read this whole thread, and I'm finding myself baffled by one thing in particular: The head of an ISO (who's been in the business since '07 and has done VERY very well in it on his own), while wanting to recruit me to work for/with him, told me that 90% of the merchants that I will talk to will have never heard of MCAs.

He also told me a story about going to a chamber of commerce meeting RECENTLY (in a pretty big city) and presenting his business to the whole crowd and then having 90% of the people there meet him outside and ask for his services.

Do you think he was outright lying about the climate of the business right now? From your above posts I would think that he's pulling my leg. But until I get into it, I wouldn't know for myself.

Would you say that it's totally impossible that he's still having those kind of experiences?

Thanks so much!

[funding pro]

That's now 3 pieces of advice for your first day on the forum. Those were free, the next one and I'm sending a bill.

[mbradford101]

I guess I misinterpreted MOVE ALONG, NOTHING TO SEE HERE.

I've seen similar comments on other forums, and what I've always interpreted them as meaning is, "This is a village idiot asking a stupid question. Don't waste your time even considering the question." OR "This is a troll annoying the forum. Don't feed the troll."

Since I didn't think either of those were applicable, I wanted to point that out.

I very much want to make a go of this business, so I really was hoping for good advice about cold calling. But it sounds like the consensus is that door-to-door cold calling is generally a waste of time. If that's the case, I'll have to look for other ways to market...

I appreciate any advice. I just don't appreciate being slapped in the face...

[MCNetwork]

I have to vouch for funding pro's responses. They are all truthful. There are no shortcuts to this business. You have to learn the industry inside and out and use a consultative approach to win customers. If you don't have the requisite knowledge, then you have a major uphill battle to get clients and you'll end up getting discouraged soon and quit. You can't use a shotgun approach. It is essential to have in-depth discussions with clients to understand their needs and make a personal connection. I'd rather have 3 meaningful conversations per day than drop off a 1000 meaningless flyers and business cards a day.

[MCNetwork]

Also, if you really don't want to join an ISO first, then take advantage of training offered by some of the top funders. If you become a rep for Rapid Advance, AdvanceMe or BFS, you will have access to some really solid training material. This will help you get up to speed much faster than stumbling around in the dark. The thing is...they don't really sign up complete newbies so becoming an ISO will still be a challenge.

[Sean Cash]

mbradford, know that while there is plenty of room for growth in this business, it is in many ways already very saturated. Consistently good lead sources are scarce and usually sell the same lead to multiple parties at once. These leads are then recycled and sold as aged leads later on, keeping constant pressure on your existing portfolio. Many qualified merchants aren't just funded by one lender, but by two, three, four, and even five at a time. Part of the problem is that there really aren't UNLIMITED fish in the sea so when a small business signals they need capital, everyone jumps on top of each other (stacking) to fund it.

Everyone is sending out mail, cold calling, voice broadcasting, mass texting, mass e-mailing, PPCing, and everything else. You might get some smug answers on here, but part of the reason is that to teach a newbie means grooming the competition. Margins are shrinking, marketing is becoming more expensive, and the payment processing residual model is dwindling because of the rise of ACH.

You can go door to door, but they probably get 10 calls per day already and a piece of mail every other week with an offer, and solicitations from their OWN payment processor included with every monthly statement. This doesn't mean you can't do well, it's just a really tough time for a newbie to get started. This is a 15 year old industry that is on the verge of crossing over from a relatively small niche market to a mainstream corporate sector of finance.

You can work very hard for 10 deals and all 10 can get declined in 15 minutes. You need volume and lots of it. In some cases, these deals are a multilayered close. You're not selling them 20k, getting them to sign a contract and then walking away. You need to close the merchant on how expensive this is relative to a bank loan, for split deals close them on changing their merchant account and a new rate plan, close them on new POS technology if their current technology isn't PCI compliant, close them on your service fee (if you're going to charge one), close them from not going with the 4 other companies they're talking to at the same time, close the underwriter on doing the deal, possibly close the payment processor on boarding the account if they have a history of chargebacks, close them on the fact that they may have to actually make 2 payments BEFORE they even get the money deposited in their bank account, close them on not taking a stack deal no batter how badly they want money later on, and close them on never going with a competitor instead of you in the future when 100 of them will make contact with your client in the first few months.

Some deals that are on ACH are easier, but the other competitive pressures are still there. That's the reality of this field right now. It's a bit of war zone.

[mbradford101]

mbradford, know that while there is plenty of room for growth in this business, it is in many ways already very saturated. Consistently good lead sources are scarce and usually sell the same lead to multiple parties at once. These leads are then recycled and sold as aged leads later on, keeping constant pressure on your existing portfolio. Many qualified merchants aren't just funded by one lender, but by two, three, four, and even five at a time. Part of the problem is that there really aren't UNLIMITED fish in the sea so when a small business signals they need capital, everyone jumps on top of each other (stacking) to fund it.

Everyone is sending out mail, cold calling, voice broadcasting, mass texting, mass e-mailing, PPCing, and everything else. You might get some smug answers on here, but part of the reason is that to teach a newbie means grooming the competition. Margins are shrinking, marketing is becoming more expensive, and the payment processing residual model is dwindling because of the rise of ACH.

You can go door to door, but they probably get 10 calls per day already and a piece of mail every other week with an offer, and solicitations from their OWN payment processor included with every monthly statement. This doesn't mean you can't do well, it's just a really tough time for a newbie to get started. This is a 15 year old industry that is on the verge of crossing over from a relatively small niche market to a mainstream corporate sector of finance.

You can work very hard for 10 deals and all 10 can get declined in 15 minutes. You need volume and lots of it. In some cases, these deals are a multilayered close. You're not selling them 20k, getting them to sign a contract and then walking away. You need to close the merchant on how expensive this is relative to a bank loan, for split deals close them on changing their merchant account and a new rate plan, close them on new POS technology if their current technology isn't PCI compliant, close them on your service fee (if you're going to charge one), close them from not going with the 4 other companies they're talking to at the same time, close the underwriter on doing the deal, possibly close the payment processor on boarding the account if they have a history of chargebacks, close them on the fact that they may have to actually make 2 payments BEFORE they even get the money deposited in their bank account, close them on not taking a stack deal no batter how badly they want money later on, and close them on never going with a competitor instead of you in the future when 100 of them will make contact with your client in the first few months.

Some deals that are on ACH are easier, but the other competitive pressures are still there. That's the reality of this field right now. It's a bit of war zone.

Jesus Christ almighty. Just kill me now

[Chambo]

Jesus Christ almighty. Just kill me now

Well, you are getting the blatant truth here, not some sugar coated sales pitch

[Scott Williams]

Taking the Lord's name in vain definitely won't help you be successful.......

[mbradford101]

I believe it. Guess I'll have to try it on the side, and see how it goes...

[CO1]

My brother is back to stocks, im still here!

[mbradford101]

My brother is back to stocks, im still here!

C01, what's your secret?

Can you share how you got started, how you market, and how you get 50-60 full packages, and end up funding 25-35 at the end?

If it's on other threads, I'll read them - just wondering if you can elaborate on what you do to make this happen

I've spoken with 5-6 lenders today so far (after submitting the ISO forms on their websites). So I'm getting setup with several and plan to go through the training materials on their sites. I asked one if he has many reps making 50-100K, and he said he had reps doing 500K per month making 7% ($35K per month gross). I assume at least 10K of that would go toward expenses and marketing. But that's still a lot more than I need to make. If I can even get to 5K per month net, I can pay the bills.

[Chambo]

C01, what's your secret?

Can you share how you got started, how you market, and how you get 50-60 full packages, and end up funding 25-35 at the end?

If you are submitting 50-60 deals and funding 35 of them, you are WAY ahead of the pack. Depending on the fund you use (they all have slightly different criteria), you can expect 10-25% approval rate...then 50% of those will fund

[funding pro]

Depending on the fund you use (they all have slightly different criteria), you can expect 10-25% approval rate...then 50% of those will fund

I have to say these numbers are going to vary more by your lead source(s) than they are of the funding companies you use. We have several lead sources that yield 80% approvals but only 30% closure rates while others are in the 50% approval range with 50-70% closure rates.

Based on my experience, 10-25% approval rates based on SUBMISSIONS is really low, i.e. UCC lists which we stopped using years ago. Now if you are getting approvals on 10-25% of your LEADS things are working for you.

[CO1]

I was forced into this Industry by my brother and now I have a career! You have to give it a shot!