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09-18-2015, 12:12 PM #1
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- Dec 2013
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OK..lets have some fun..Regarding supersaturated...I think the space in undeserved. lets say between all the MCA firms we got 1000 (maybe 2000) reps on the phones talking Cash Advance? that would be serving 17M business owners.
lets talk about the PUSH and PULL theory;
Very few people are waking up and deciding to call Herbalife for some tablets yet they do just shy of 4BILLION Annually that is all done by way of the PUSH MODEL. (BTW Avon does 10 Billion with the PUSH model).
Apples Revenues are the PULL MODEL
So I agree the MCA space is "highly overly saturated" on the PULL MODEL, as in the merchants seeking the capital, however the MCA industry is in the INFANCY STAGE when it comes to the PUSH MODEL.
to put it in perspective it would take a Month for our entire industry to work the phones just to present the MCA programs (listen closely) to the 42,941 American single liquor stores operators.Last edited by mcaguru; 09-18-2015 at 12:17 PM.
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09-18-2015, 12:40 PM #2
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- Jul 2014
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17 million is a very inflated number. If you look at the revenue statistics for small businesses, about 14 million of those "small businesses" are under 100K in gross annual revenue, effectively eliminating them from qualifying for an MCA product, or even traditional financing.
I disagree that this space is under served in what you refer to as the push model. People have said the opposite, but I've found that eligible businesses are fairly well marketed to.
Say you have 4 million businesses, and just 50 ISOs reaching out to 100,000 prospects a month, whether it be direct mail, email, robo-dialing, cold calling, or any combination thereof, this covers 5 million prospects, more than the eligible pool of applicants. How can you say this space is under served?
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09-25-2015, 12:19 PM #3
Agreed, the industry has been slow this Jewish holiday for example (according to most ISO shops)...Yet we cant deal with the rush of all the 1st position deals calling us for capital, merchants new to the industry. Its nicer to educate merchants on the product than talk to a merchant on a UCC sheet or one that's been stacked. Rare the merchant that leaves with a good experience after being stacked to death. I feel like there are still so many people who don't know about an MCA, why are most ISO's fighting over the same leads instead of doing the hard work and originating. It takes time, effort, and money but it pays off we have seen.
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09-25-2015, 01:55 PM #4
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- Jul 2014
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I know I bring this up often, but you're implying ISO's aren't working hard and originating, and we are somehow missing out on the copious amount of qualified '1st position' MCA virgins out there that seem to knocking down your door. I for one, spend a lot of money to attract the attention of new clients, and I love when I get the pleasure of speaking to a merchant who has never heard of me or my product.
Further, I am friendly with or acquaintances of some other ISO owners in the area here and they spend and employ far more than we do. The ROI on the marketing they use is still very thin, while the acquisition cost remains well into the low 4 figure range. Some have to depend on the renewal just to turn a profit right now, mostly because of market saturation. Any ISO spouting they would not consider giving a 2nd or even 3rd, in some cases, to a qualified, well-underwritten merchant, is crazy.
I guess what I'm saying is that we do originate, and we do work hard. Where is this honeypot of virgins you speak of, and how do we reach them? Privately share this with me, and you get the first right of refusal on every application I bring in. Deal?
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09-30-2015, 06:31 PM #5jotucker1983Guest
FUNd,
I can't rep you enough, there should be a button to rep a post two, three or four times (we could call it the Reputation Stack lol).
I also keep hearing about how there's this open market of merchants out here who have never took out an advance, and for some reason that alone is supposed to mean there's this opportunity to convert a large amount of people to new clients? The reality is that the reason they have never taken out an advance (or an alt. loan), is because the cost is too damn high lol!
With all of the marketing going on out here, companies being featured in the media, etc., I would say that the vast majority of small business owners have heard about this product in one form or another.
I think we have to just be honest with ourselves and admit, we really are fighting over the business (in the US at least) of no more than 25,000 - 35,000 merchants today. We are literally just flinging the same merchant to this company, then to that company, then to another company.
These aren't your every day business owners, these merchants (sorry to say) are usually unsophisticated, their credit scores are much lower than the national average, they are unorganized like hell, you need 3 months of bank statements from them and they can't keep all of the pages together, they don't file their taxes on time, or they don't pay their rent on time, they send you over expired driver's licenses, etc., etc. These are the people that our product appeals to, it's the unsophisticated. And I'm sorry to say that.
The "normal" everyday entrepreneur, that's organized and sophisticated, literally laughs at these MCA post cards or "voicemails" they receive about 1.20 - 1.45 factor rates over 6 - 12 months. They aren't going to ever entertain our product.Last edited by jotucker1983; 09-30-2015 at 06:41 PM.
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10-01-2015, 10:36 AM #6
- Join Date
- Sep 2012
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- New York, NY
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- 1,780
Can't disagree more with this statement. Every day, my team and I pitch solid approvals to merchants who know next to nothing about a merchant cash advance. For those companies that have no need for immediate capital, the ads and banners for cash advances just go over their heads and don't register with them. Once a bonafide need DOES arise however, many of them are ripe for the product and can barely recall the banners they saw a month ago. The only funders and ISOs that are fighting over the same 25,000-35,000 merchants are the UCC hunters. The firms that have a much larger marketing budget know how to find the virgin MCA clients.
Last edited by MCNetwork; 10-01-2015 at 10:43 AM.
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10-01-2015, 10:49 AM #7
100% agree with you I pitch more people who have never heard of a loan that can be paid back with daily payments then I do merchants who have..
We see all those banners because of the websites we go too we are targetted with them based on internet activity. ABC pizza guy goes to a website he is probably not seeing an ondeck bannerJohn Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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10-01-2015, 10:59 AM #8
- Join Date
- Sep 2012
- Location
- New York, NY
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- 1,780
Well you and I worked together at NLF/MCC years ago so we know what type of leads a good marketing budget can buy. Many of the people on this forum can't relate
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