[CO1]

Any one know what happen to Factor Exchange.

[funding pro]

Any one know what happen to Factor Exchange.

They built a model off of pushing brokers into an exchange where they can submit deals once and get many responses. There are several problems with that model and why it wouldn't work. But the largest problem is simply that a broker is going to try to get a deal done with a direct funder first to get the largest commission possible and only after it has been declined by 1-5 funding companies will they put it in an exchange where they would share a smaller portion of the revenue. Funders get flooded with crappy declines and then either turns them off or just provides such low level service they push them away.

[blindbid]

They built a model off of pushing brokers into an exchange where they can submit deals once and get many responses. There are several problems with that model and why it wouldn't work. But the largest problem is simply that a broker is going to try to get a deal done with a direct funder first to get the largest commission possible and only after it has been declined by 1-5 funding companies will they put it in an exchange where they would share a smaller portion of the revenue. Funders get flooded with crappy declines and then either turns them off or just provides such low level service they push them away.

I'm not sure that is a bad model. Why wouldn't a broker want several options? Also the broker can show his client that he's done his due diligence and close more deals.

[Sean Cash]

blindbid, I get your emails. How many companies do you sell your leads to at once?

[funding pro]

I'm not sure that is a bad model. Why wouldn't a broker want several options? Also the broker can show his client that he's done his due diligence and close more deals.

Its a good model if you are aggregating deals from brokers that are not in this industry that don't want to get into this industry who come across deals that would be ideal for our financing.

Its a bad model when you are getting deals from brokers inside this industry who have already tried to get them funded with their preferred funding companies and then are just going to pass them off to see where those would get funded. Its essentially a model built around throwing as much crap against the wall as you can and seeing what will stick.

[Scott Williams]

Its a good model if you are aggregating deals from brokers that are not in this industry that don't want to get into this industry who come across deals that would be ideal for our financing.

Its a bad model when you are getting deals from brokers inside this industry who have already tried to get them funded with their preferred funding companies and then are just going to pass them off to see where those would get funded. Its essentially a model built around throwing as much crap against the wall as you can and seeing what will stick.

I agree. This model only works for new ISO's that don't know any of the lenders programs or someone who just wants to refer a deal that is not in the industry. Its the worst model for a seasoned ISO. A seasoned ISO should know where to submit the file over some general exchange.

[blindbid]

They changed their name to Lender's Axis.

[AndyYSCISOdept]

I find that, regardless of models every rep or Iso is going to "shotgun" their submission in a search for not the best deal for the merchant, but the BEST deal for them. If it happens to be the best for the merchant too then that is jsut a bonus. I have that happen all the time when an ISO tells me why he didnt take an offer from us at YSC, he says, "even though it was more expensive for the merchant...I MADE MORE MONEY"

[funding pro]

I find that, regardless of models every rep or Iso is going to "shotgun" their submission in a search for not the best deal for the merchant, but the BEST deal for them.

With all due respect, if this is what you find it says a lot about your business model. There is a big difference between ISOs acting as brokers looking to capitalize on every transaction in the best way possible and looking to form true partnerships. I think in this business the cream rises to the top and often "shotgunning" deals is the result of poor marketing, poor salesmanship and a lack of confidence in any of your funding partners.

Personally, I use a primary funder for the majority of my deals and a secondary funder that I send declines and deals I know my primary will not approve. This probably accounts for 90% of new business I get done. The rest I would consider "one-offs."