Results 51 to 63 of 63
-
10-08-2015, 11:19 AM #51
For most products I agree, although some people have a unique product which makes sense for them to pay less.
-LoanMe offers a 10-year term with no prepay penalty and a monthly
-Yellowstone will approve higher-risk merchants than pretty much anyone else
-Fundingcircle/Fundation/Dealstruck have longer terms with lower rates and monthly payments
Now, as far as the traditional ACH product goes for A, B, and C paper deals, by all means (in my opinion) you can easily average 8+ points. We've had reps that average 14-15 points.
In fact, I've found two varying philosophies on maximizing brokered commissions:
1. Sell the maximum commission on every deal and focus on max GM
2. Sell the most competitive rate the client can get (note: not necessarily low points) and focus on relationship/renewal
I've had reps that utilize both methods, and I've seen both methods produce wealth at different brokerages. On average, I find that "maxing out" deals tends to produce more income in the long run, but that is also my personal experience. I am sure other people, like John Tucker, have an awesome renewal pipeline that we would all envy (for minimal work!).
I think it's important to teach new reps to max out deals so they get comfortable selling 15-20 point commissions. Once they are comfortable you can discuss strategy further with them, but many reps can't get past the sticking point of discomfort selling a deal with $10-30K of GM on the line.Zachary Ramirez – CEO
Phone: 562-391-7099
Email: zach@zacharyjosephramirez.com
1661 N. Raymond Ave #265
Anaheim CA 92801
-
10-08-2015, 11:28 AM #52
For most products I agree, although some people have a unique product which makes sense for them to pay less.
-LoanMe offers a 10-year term with no prepay penalty and a monthly
-Yellowstone will approve higher-risk merchants than pretty much anyone else
-Fundingcircle/Fundation/Dealstruck have longer terms with lower rates and monthly payments
Now, as far as the traditional ACH product goes for A, B, and C paper deals, by all means (in my opinion) you can easily average 8+ points. We've had reps that average 14-15 points.
In fact, I've found two varying philosophies on maximizing brokered commissions:
1. Sell the maximum commission on every deal and focus on max GM
2. Sell the most competitive rate the client can get (note: not necessarily low points) and focus on relationship/renewal
I've had reps that utilize both methods, and I've seen both methods produce wealth at different brokerages. On average, I find that "maxing out" deals tends to produce more income in the long run, but that is also my personal experience. I am sure other people, like John Tucker, have an awesome renewal pipeline that we would all envy (for minimal work!).
I personally think that by simply being cognizant of the client's options is the most valuable tool a salesperson can have. This, of course, requires knowledge of what other offers the client has access to, but if you know his next best buy-rate is a 1.25 and you have a 1.18, you can probably put 12 points in the deal and feel safe about it.
I think it's important to teach new reps to max out deals so they get comfortable selling 15-20 point commissions. Once they are comfortable you can discuss strategy further with them, but many reps can't get past the sticking point of discomfort selling a deal with $10-30K of GM on the line.Zachary Ramirez – CEO
Phone: 562-391-7099
Email: zach@zacharyjosephramirez.com
1661 N. Raymond Ave #265
Anaheim CA 92801
-
10-08-2015, 12:13 PM #53
- Join Date
- Sep 2012
- Location
- New York, NY
- Posts
- 1,780
I found that the salespeople working for larger organizations follow philosophy #1 and the smaller independent guys follow philosophy #2. This is because the independent agents have to rely more on renewal income than employed salespeople who are given a steady diet of new deals.
-
10-08-2015, 12:22 PM #54
Right, I've found most will balance the two out. Depending on how smart the merchant is and what they are looking for, sometimes in order to close the deal you have to go with whats best for merchant (if they wont budge) not the brokers pocket. Although what the merchant doesn't know wont hurt him is another philosophy. lol
-
10-08-2015, 12:29 PM #55
thanks for the article, this is the dream of almost everyone who opens an MCA. One day selling for big bucks getting out of the business. I guess good for Abe...
-
10-09-2015, 01:25 AM #56jotucker1983Guest
What I have always done is price deals based on the risk category they fall in, that's why my commission ranges 2% - 5%.
It's not about selling the lowest rate, that's not my focus, I sell an entire working capital solution which includes the fact that (most of the time) we can help build their business credit, the fact that our product works "similar" to a line of credit with the way the reload procedure works, and the growth aspects of using our capital in terms of the investment components.
In terms of lender placement, I'm going to do pre-qualification on the client and A+ Paper goes to an A+ Paper Lender, A Paper goes to an A Paper Lender, B/C Paper goes to the B/C Paper Lender, and C/D Paper goes to the C/D Paper Lender. E Paper I don't entertain.
Sure, I could take the A Paper and send him to the B/C lender, so instead of making 2% - 5%, I could pull about 8% - 10% due to the mark-up. But is that putting my client first or is that putting John Tucker first? To be honest with you guys, I love seeing competitors do this because it becomes that much easier for me to steal the client away lol.
I don't believe a guy that qualifies for a A+ deal should be placed at a C/D Lender (or priced at C/D Lender pricing) just so you can make 10% - 15% commission. But that's just how I operate.Last edited by jotucker1983; 10-09-2015 at 01:40 AM.
-
10-09-2015, 10:06 AM #57John 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
-
10-09-2015, 10:17 AM #58
- Join Date
- Dec 2013
- Posts
- 4,713
I have a lot of respect for Bloomberg Publications it just seems like the article was more fit for a tabloid or the rolling stones! Typically they cover the cleverness of a business strategy seems a little off target for Bloomberg.
-
10-09-2015, 10:43 AM #59
- Join Date
- Jul 2014
- Posts
- 1,746
John, I understand why you can charge 5 points and make a living, you don't split your take with the house. You are the house. When you're another kid in a call center with a 2K draw making 10%, you need to charge 20 points to scratch out a commission check. Sounds like you're actually a consultant and not an order taker or another predatory bottom-feeder looking to mop up every last dime of someone's monthly deposits.
No need to justify yourself. MCA is about 25% of my business, and some of the bank statements I see that have outstanding advances, horrendous. Sad, really. Deposits of $75K and ending balances of $6.75. Some lenders in the space have no problem jeopardizing someone's company, their employees, and their families to make "20 points".
Personally, I'd rather eat out of a trash can, than lie, cheat, steal, and put people out of business. But then again, I think I may be the black sheep of the MCA biz, too.
-
10-09-2015, 12:24 PM #60
What is funny is how this reporter accuses them of making their fortunes by taking advantage of others. Funny how people throw rocks in glass houses. Is this reporter not making a name for himself by exploiting other by making out 2 individuals plus arguably the industry seem like a bunch of loan sharks? What he did is absolutely no different than what he is accusing them of doing. In any case, I still stand by the fact that inviting a reporter to your home and divulging your rags to riches story while expecting him to write some wonderful piece about you is naive at the very best. Lets hope they don't blow through their money too quickly.
-
10-15-2015, 05:55 PM #61
- Join Date
- Feb 2014
- Location
- New York
- Posts
- 162
The Article is Bull**** in my opinion. Meir hired me and gave me a shot. Today i own a direct lender and an iso with 30 people - I'm living the dream. Its the same thing when people complain about DG over at YSC, guy gave me a shot along with Isaac and I made more money than i could've dreamed of at that time. Sp my hats off to all the success stories in this little business of ours. "this thing of ours'
-
10-15-2015, 06:19 PM #62
-
10-15-2015, 06:56 PM #63
- Join Date
- Feb 2014
- Location
- New York
- Posts
- 162
Similar Threads
-
pearl capital
By cashguy in forum Merchant Cash AdvanceReplies: 24Last Post: 04-03-2020, 12:11 PM -
New Pearl Capital
By cashadv in forum Merchant Cash AdvanceReplies: 20Last Post: 03-26-2015, 10:10 AM -
Pearl Capital Selling??
By bizloanbroker in forum Merchant Cash AdvanceReplies: 17Last Post: 11-21-2014, 01:21 PM -
Bloomberg article on Kalamata Capital?
By LendioCEO in forum Merchant Cash AdvanceReplies: 8Last Post: 10-08-2014, 06:33 AM -
Is Pearl Capital taking aim at North American Merchant Advance Association (NAMAA)?
By Industrycityusa in forum Merchant Cash AdvanceReplies: 42Last Post: 06-19-2014, 03:21 PM