[C.A.M]

Ill start off by saying hi. My name is CAM. I currently work with 2 partners and we are extremely new to MCA Industry. Keep in mind i am newbie to this forum so i can deal without the negative comments that i hope you keep to yourself. Besides I don't want a diesel argument with any Internet thugs that might make me look bad, so please save us both the trouble. MUCH APPRECIATED

okay, with that being said i don't want your secrets that you obviously wont share, or opinions on what im doing with my time. i need the facts about the industry that multiple sources can agree and confirm.

In the Last 4 days, I have attempted to absorb and retain as much information and knowledge of this industry as possible, and still feel like i have not scratched the surface. i have partial photographic memory and what i think is decent common sense so my learning curve i can say is above average. any help is appreciated but not required

I was trying to avoid asking tons of questions, so ill start like this:

My current knowledge of what i think i know:
1. pitch down [not 100% but good] (i realized early that pre-selling a deal before submitting paperwork and pitching offers is BIG. make sure they understand how everything works and i always keep it 100% funky when i speak) I was never one to beat a dead horse or chase ghosts/ bait and switch tactics are not my style
2. i sorta understand the basic process that leads up to funding a deal and the options of payment for merchants with few exceptions (weekly ach?)and w/e else im in the dark on.
{capture merchants interest and full understanding of what an MCA is and how its paid back. obtain app./6mo bank 4mo credit statements, submit to lenders for approval and when offers received know how to pitch them in a way the merchant can see this beneficial, contracts in-out, fund) IN A NUTSHELL??
3. medium understanding of what variables might affects approval/offer term &rates (ie: neg days, tax liens, judgments, ect.) better credit= better term/rate right??
4. slight understanding of positions 1-5 and how they affect current offers. someone touch this topic for me: ( buying out an already existing position?, renewals ect.) thanks
5. i understand we WANT business to grow off the advance and not be used as emergency funding. it they go out of business, that a loss
6. not 100% on this 1 but if a i submit a deal to a lender with an application for merchant, noone can submit the same merchant to the same lender for 30 days?
7. point system commission, unsure how to calculate adjusting points to lower payback amount (i know i get less money) (shed some light)
8. different lenders different sweet spots.
9. usury laws
10. i still have a ton to learn right?

i mean cmon for only 4 days attempting this industry (2days of 9-5 shadow training with minimal questions asked bc of training situation -- 2 days on the phones/doing research on my own) cut me some slack... im young, giving it all i got, and do not plan to fail.

I JUST WANT TO SAY THANK YOU TO ANY AND ALL WHO READ THIS FAR!! ALL INFORMATION/ADVICE/POSITIVE FEEDBACK IS MUCH APPRECIATED.

Stay Humble.
Shalom
C.A.M

[CreditGuy]

i was trying to avoid asking tons of questions, so ill start like this:

*10 extremely broad questions, several with multiple parts*

lol

[C.A.M]

well if u read it, those 10 things i think i know are not all questions. i made few requests for answers.. unless you have something to important or positive to say , please go somewhere else with your usless opinions.. thank you

[@jeannette]

Cam, feel free to call me and I will discuss all your questions and comments with you. 770-362-2307

[ridextreme]

Ill start off by saying hi. My name is CAM. I currently work with 2 partners and we are extremely new to MCA Industry. Keep in mind i am newbie to this forum so i can deal without the negative comments that i hope you keep to yourself. Besides I don't want a diesel argument with any Internet thugs that might make me look bad, so please save us both the trouble. MUCH APPRECIATED

for a first time poster asking your competitors to help you establish your business so you can compete against us, you have quite an attitude buddy.

Thankfully, this industry is full of people like yourself who think they can come in (at this late stage) to an over saturated market and make a fortune when in reality it is a very tough industry especially from someone coming off the streets.

With that being said, since this forum is filled with advertising spamming lenders expect to get a billion PM's asking you to sign up with them. Upon doing so, I would suggest to sign up with someone who is willing to take a newbie by the hand and walk you through everything from day one. This business is all about relationships.

[C.A.M]

thank you for the honesty ride (better late than never), jmcgraw i will contact you shortly. I appreciate it

[jpos]

CAM,

I'm still getting my sea legs in CA. While our primary product isn't CA, but POS and CC Processing, we have been doing well with referrals from our existing referral partners and a few local bankers sending us tons of people kicking tires and a few solid referrals. we track in our CRM and pay a flat referral fee on Amex gift card. most of our referral relationships are 2 ways, except the bankers ... they know we aren't sending them anything except $ when they refer us and we close a deal.

I'm no expert and not sure what approach you guys are shooting for, but referrals and hand addressed letters containing advertisements followed by calls have been our most effective sources of deals.

[C.A.M]

jpos thanks for that insight, we want to pursue all avenues of marketing and I will make a note of this to discuss next meeting. much appreciated

[C.A.M]

^^

[GMFunding]

CAM I'd be glad to give you insight from an ISO perspective, give me a buzz when you'd like. PM ME

[C.A.M]

for a first time poster asking your competitors to help you establish your business so you can compete against us, you have quite an attitude buddy.

Thankfully, this industry is full of people like yourself who think they can come in (at this late stage) to an over saturated market and make a fortune when in reality it is a very tough industry especially from someone coming off the streets.

With that being said, since this forum is filled with advertising spamming lenders expect to get a billion PM's asking you to sign up with them. Upon doing so, I would suggest to sign up with someone who is willing to take a newbie by the hand and walk you through everything from day one. This business is all about relationships.

I see what you're talking about

[KM_Superior]

Cam-We are always looking to build new relationships with ISO's. Give me a call or shoot me an email-

[Bank]

You need to get small mom and pop shops with no relationships or connections to send you their deals that they can not get funded through their own network. Be a liaison between small ISO's in the mid west or down south that aren't up to par with who the big lenders are and they will send you deals that you can find a home for and take a rip off the commission on each funding. This industry is so saturated and that is the only way to make big money at this stage.

[WhoisKingsley]

NO- you don't need to get mom and pop shops with no connections to send them their deals aka SUB-BROKERING

They need to get better trained and established and build their own book before helping anyone else. That is exactly what is wrong right now- you are sub-brokering files and bumping rates up 10-15% to cover commissions on both ends and wind up hurting the business by having them payback rates they really can't afford. Then you wonder how to market and get new leads when you won't be able to adhere to the "promises" of the rates and terms you have.

Seriously, and many of you agree, new brokers in this industry need help understanding the right way instead of the bad habits that everyone has come to adopt as a normal process. *shaking my head*

[SteveFinServe]

Great point Amanda, get some help but stop splitting up and driving up the cost of money for your clients. Many brokers are trying to turn and burn, if you do that you will be one of the "out of business" brokers. Build up an honest business where your clients can grow and come back to you for help in the years to come. We all learned in college the term societal marketing orientation, I encourage you to take on the mindset of being an entrepreneurial freedom fighter. If you aren't fighting for your clients then please leave our industry...

Was that too harsh?

[jotucker1983]

C.A.M.,

I guess I'm a little confused buddy, you said that you had some questions but from reading through your thread, all I seen were a bunch of comments. What exactly are your questions?

[C.A.M]

there is a few sub questions on my first post if read through fully. I need to know what i do not know. i will Pm and discuss this with anyone willing to provide information on this industry.

[Drizzle]

CAM.....here is some insight......it takes more than 4 days to be successful in the MCA space.

[WhiteHorse]

rekt

[C.A.M]

...

[WhiteHorse]

...

Just listen to your sales manager and keep dialing. It boils down to hard work and quality leads.

[WhiteHorse]

NO- you don't need to get mom and pop shops with no connections to send them their deals aka SUB-BROKERING

They need to get better trained and established and build their own book before helping anyone else. That is exactly what is wrong right now- you are sub-brokering files and bumping rates up 10-15% to cover commissions on both ends and wind up hurting the business by having them payback rates they really can't afford. Then you wonder how to market and get new leads when you won't be able to adhere to the "promises" of the rates and terms you have.

Seriously, and many of you agree, new brokers in this industry need help understanding the right way instead of the bad habits that everyone has come to adopt as a normal process. *shaking my head*

Well how do you feel about master ISOs masquerading as CRMs?

[jotucker1983]

there is a few sub questions on my first post if read through fully. I need to know what i do not know. i will Pm and discuss this with anyone willing to provide information on this industry.

But I have no idea what information on the industry you are looking for. The original post is way too jumbled with run-on sentences, bad paragraph structure, and again all I seen were a bunch of comments.

One of the lessons that you can take from this is to make sure to always communicate your ideas, thoughts, comments and questions in a very clear/concise format. Most people just will not take the time to read through a bunch of jumbled sentences trying to "figure out" what the person is trying to say.

If you sent emails to merchants structured the same way you made that post, most merchants wouldn't take you seriously.

[Zach]

See my responses in bold

My current knowledge of what i think i know:
1. pitch down [not 100% but good] (i realized early that pre-selling a deal before submitting paperwork and pitching offers is BIG. make sure they understand how everything works and i always keep it 100% funky when i speak) I was never one to beat a dead horse or chase ghosts/ bait and switch tactics are not my style

This is debatable, from what I've seen there are essentially two schools of thought: one school being of the opinion that being vague and wispy upfront will generally lead to more applications and subsequent fundings, and the other school arguing that selling the deal upfront will result in less wasted time and therefore more fundings.

I personally side with being a bit vague upfront in order to obtain the application. Upon receipt of the application but BEFORE submission, I call the client to quote which programs they will likely qualify for. This method works well for me.

2. i sorta understand the basic process that leads up to funding a deal and the options of payment for merchants with few exceptions (weekly ach?)and w/e else im in the dark on.
{capture merchants interest and full understanding of what an MCA is and how its paid back. obtain app./6mo bank 4mo credit statements, submit to lenders for approval and when offers received know how to pitch them in a way the merchant can see this beneficial, contracts in-out, fund) IN A NUTSHELL??

Process:
1. Obtain application
2. Quote client
3. Submit deal
4. Negotiate approval
5. Close for funding docs
6. Final underwriting/stips
7. Fund

3. medium understanding of what variables might affects approval/offer term &rates (ie: neg days, tax liens, judgments, ect.) better credit= better term/rate right??

1. Deposit volume/revenue
2. Average bank balances
3. Personal credit (this encompasses judgments and liens)
4. Business Credit
5. Industry type
6. Seasonality
7. Payment deposit ratios or CPDR on current debt service
8. CLTV / collateral type (if secured by collateral)
9. The funder's existing data for that portfolio (the reason why most lenders don't fund auto dealerships)
10. Negative ending days/NSF's

There are MANY more variables than these, but knowing these ten should get you off to a good start. Most people in the space only understand average ledger balances, deposit volume, NSF's, and credit, which is frankly all you need to know to be a good salesperson in this space.

4. slight understanding of positions 1-5 and how they affect current offers. someone touch this topic for me: ( buying out an already existing position?, renewals ect.) thanks

Positions are generally affected by the current debt service the client is paying out on a monthly basis. The ratio that is used to calculate this is called PDR, or "payment-deposit-ratio". CPDR is referring to their combined payment deposit ratio. As the name would imply, PDR refers to the ratio of the payment versus their monthly deposits. Most lenders prefer not to exceed 15-25% CPDR. This is why a guy who does 500K monthly with a 150K existing loan balance can probably qualify for another 150K from someone else. It all boils down to how much of their monthly income goes towards servicing that debt.


5. i understand we WANT business to grow off the advance and not be used as emergency funding. it they go out of business, that a loss

There are two purposes for a client taking our funds: offensive and defensive. Offensive would be a client taking the funds to expand or grow the business in some way. They utilize our funds in order to capitalize on some opportunity. Defensive would be a client who needs to make payroll, pay off existing debts, or just keep the business afloat. Lenders obviously prefer offensive uses of funds.

6. not 100% on this 1 but if a i submit a deal to a lender with an application for merchant, noone can submit the same merchant to the same lender for 30 days?

Generally, yes, but this depends entirely on the lender in question.

7. point system commission, unsure how to calculate adjusting points to lower payback amount (i know i get less money) (shed some light)

Fairly easy to calculate, here's some basics:

1. A 12-month term typically has 252 payments.
2. The payback amount is simply the factor rate multiplied by the funded amount.
3. To calculate the effect of lowering the rate on the payments, multiply the new, reduced factor rate by the funded amount, and divide by 252 (or whatever the term is).

EX:
100K borrowed at 1.40 with 15 points = 140,000 payback with $555.55/daily. $15,000 total commission earned.
100K borrowed at 1.35 with 10 points = 135,000 payback with $535.71/daily. $10,000 total commission earned.

8. different lenders different sweet spots.

To find the right mix of lenders and learn to appropriately place files takes time and experience. Sign up with a few lenders in each category (A, B, and C) and learn their underwriting.

9. usury laws

Essentially there are two camps here. There is a cash-advance camp, that is purchasing future receivables; because this is a sale, rather than a loan, usury does not apply. There is also the business loan camp, which is funding short-term business loans. These funders typically use a federally-chartered bank as a "rent a charter" , and these federally chartered banks are also not subject to the same usury laws (which vary state-to-state as well).

10. i still have a ton to learn right?

Yup! Good luck and happy huntin'.