[John Galt]

You want a Rolls Royce? Why?....Because you can't have it. Classic take away.

[FUNd]

Great stuff. And all true. Why bother asking "how's your credit?" on a non-credit driven product? You'll find out later how the credit is - when you get the app in. You're supposed to be talking about what's in it for THEM to apply. Asking about their credit is more of a "What's in this for ME?" type question. Don't worry about wasting 10 minutes talking to a guy that may not be qualified.

Any conversation is good, and can be profitable. Have something to offer every client, even it its digital literature for $99.95 on the FCRA rules for cleaning up your credit. Who cares. Sell them something valuable and beneficial on every call.

[John Galt]

We all know it is really not "a non credit driven product"... if they had credit they wouldn't be here. The effect of credit is still inherent, each template or model differs but we all take it into consideration to some extent however minor. Sorry to say but if you're selling the FCRA stuff for whatever, the Corporate credit stuff is 1-3K plus a % of loans.

[jotucker1983]

When you are selling our type of product, in my opinion, as a broker you are much more a "match-maker" than a sales consultant. The actually art of "selling" is a very small part of the process, compared to that of being a very efficient and resourceful "match-maker".

Let me break this down further.

With our product, you aren't paid on selling anything, you are paid when you match a merchant that needs alternative funding at particular terms and with a particular risk profile, with a lender that funds merchants within that particular risk profile and at terms the merchant is looking for. So the bulk of your time shouldn't be spent "selling" or "convincing" a merchant on anything, the bulk of your time should be firstly on constructing your Funder Network, and the second portion on screening merchants who would be a "good fit" for one or two of your Funders.

- You should research merchants who are in situations of needing alternative funding for whatever reason such as maybe a UCC, a guy adding a location, etc. Then, you would be calling on those merchants, letting them know what you can do and telling them your cost for capital breakdowns, if they are OK with your short payback cycles and high cost, it's time for pre-qualification.

- You want to do serious pre-qualification on them from asking about their credit, tax liens, bankruptcies, landlord payments, cashflow situation, time in business, the whole nine yards so you can see if you even have a Funder that can potentially approve them. If the merchant refuses to do this, they aren't serious about needing capital and are wasting your time.

- So you get the pre-qualification done and let's say you have a Funder in your Network (or outside of it) that can approve them, now you are going to spend time chasing the merchant to get all of the required items and submit to said one or two Funders.

- Let's say one Funder approves and at the terms the merchant wants, then the next portion of your time will be chasing the merchant for closing items and answers to the Lender's questions during closing. Everything gets in eventually, the Lender funds, you are paid within 24 - 72 hours.

You can be the "best salesperson" in the world, in that, you can "talk" a merchant into sending you over an application. But that means absolutely nothing if the merchant's risk profile cannot be funded by one of your Funders, OR if the merchant isn't serious enough to send you the additional items and answer additional questions from Underwriting.

In my opinion, I think Brokers should try (to the best of their ability) to submit 10 apps to a funder and get 3 - 5 funded, than to submit 30 apps and fund 1.

[golf2014]

comparing madoff etc is not the same as salesman on mca. madoff scammed people into believing there investments were secure etc. cash adv is giving customers money. Before we go on about sales tactics etc..the lenders are as much to blame as anybody. funding a business for a 3rd or 4th position is horrid. ALso..how many lenders give contracts premature and resind offers. The mortgage crisis involved the fed govt because of Fdic.Mca isn't backed by us govt.

[Zach]

Awesome post, John. Agree 100%.

[KTK]

..

[ridextreme]

But you're not gonna get the 35k if hes in BK, default etc.....and you wasted your time, his time and the underwriters time because you took an app. And the underwriter thinks, here comes another piece of garbage from this salesman. You don't have to just sell MCAs, listen to the customer...maybe there's something else you can help him with. Credit remediation, factoring, collateralized loans, payroll financing etc.....Know your customer. Why lie to him and tell him, yeah you'll get 200K, educate him.

I never lied to him about getting 200K. If you re-read my post, if he is requesting 200K and grosses 50K, I would never say "Your never gonna get that you only qualify for about 25". I say "Ok great here's what I need and I will submit it into underwriting". I never said he will and I never said he won't get 200K.

Also, if he's in a BK or has a judgment from an advance company he won't even be submitted. Not that I haven't funded anyone while in an active BK.

[fundgorilla]

This is some good stuff, guys - no doubt! Let's raise the bar a bit by bringing in elements of mass market sales and Public Relations to introduce possibilities you've probably not considered, and rhetorical devices still uninvented. Reading this short primer will do you a world of good in a variety of areas, but if you look at this stuff from a salesman's perspective, I'm sure you'll agree that the potential exists to create a totally unique way of approaching the client - a bolt from the blue that is completely unique, and utterly compelling:

http://www.dailywritingtips.com/50-types-of-propaganda/

[AndyYSCISOdept]

Zach, I really like everything you said in your post, good work.

Hey guys,

I thought it would be fun to have a random daily sales tip thread. Anyone can feel free and post here with whatever tips they think are valuable, important, or even just funny.

Here's a few to start:

TIP #1:

Understand your client's needs, rather than just prequalifying and asking for an app. I see so many sales people run through the usual prequal questions:

What is your monthly revenue?
What is your average ledger balance?
What does your credit, roughly, look like?

And, to be sure, these are important questions, but what about the KEY selling questions, like:

After I deposit these funds into your account, how much revenue can you generate with my money?
Why is this loan important for your business?
What will be the long-term impact of this financing for you personally?

These types of questions make the client SELL YOU on why they need the loan. Important stuff.


TIP #2:

When is the best time to get an app? It's right after getting an app. In that moment you are more confident, self-assured, and more likely to have the necessary enthusiasm to entice a merchant to send their documents to you. Instead of running around the office bragging about that $100K deal you brought in, go make more calls! That state of mind is crucial to sales success. "Success breeds success"


TIP #3:

Don't hem and haw!!! No "UHHH" or "MMMMMM" on the phone! You are a sophisticated professional... act like it! If you don't know what to say, remain silent rather than make these strange, nervous noises.


TIP #4:

Record your phone calls! (legally, of course)

Listen to your pitch and take notes on what you did poorly. Also pat yourself on the back for what you did well. Write down key lines that you ad-libbed that worked. Make a list of smart things that you said... then, even if you aren't smart, at least you can sound like it!

[John Galt]

Madoff was a fast talking salesman who cared little for his customers and was only interested in making money. Stacking has many similarities to someone with 10 credit cards. FDIC had nothing to do with the mortgage crisis, AIG did when they in effect reinsured the market with their rating when the tranches were monetized. Read "too big to fail". Any deal can fall through at the last minute. They are usually only conditional approvals.

[John Galt]

I read your post, it is a lie by inference (not an insult to you). I would rather outline what the possibilities are, rather than give him false hope. I would rather tell him it is unlikely that he will qualify for that much, but we can start him with something and build from there. I let him know I'm not some guy in a boiler room blue skying him and this is the reality of this industry.

[ridextreme]

I read your post, it is a lie by inference (not an insult to you). I would rather outline what the possibilities are, rather than give him false hope. I would rather tell him it is unlikely that he will qualify for that much, but we can start him with something and build from there. I let him know I'm not some guy in a boiler room blue skying him and this is the reality of this industry.

I understand what you are saying, that would be great if you were a banker sitting in the bank and he walked in to apply for a loan. In our industry he is getting multiple calls every day and if one guy tells him he will never qualify for the 200K and another guy says he will submit his app and come as close as possible, he's going to send it to the guy who was more open rather than straight out telling him it's never gonna happen.

[John Galt]

I disagree. He will send it to the guy that he's more confident will do the job. Outlining a long term specific program. Teaching him about the conventional and alt markets. Getting him out of the alt market over the longer term. Getting him other forms of financing. There's never a "never", just not right now. Showing him what the building process is and explaining if some fast talking salesman is telling you he can get more, he's lying.

[John Galt]

PS: Bankers drop in my office every day to cold call getting business.

[TheShitzuofMCA]

What works for me is honesty, there are alot of bull****ters. Not saying every once in a while you need to bend the truth but some merchant are straight lied to. I think being on top of your deals not letting too much time pass the merchant starts to think about the interest or fees (worse lose it to another offer). Being on top of it doesnt mean being pushy/aggressive, with money either they want it or they dont. Ive seen where being proactive really works on the application for example, filling out the application while your asking the merchant questions. When your done all they have to do is sign it, this is much easier and they will ususally sign once its all filled out for them. Best Regards...

[jotucker1983]

Ride Extreme,

I think you make some good points, but I wanted to add to the discussion between you and John Galt.

...I hear reps asking all the wrong questions which are only going to scare him off such as "How's your credit? Any tax liens? Any previous BK's?" Once they start hearing this they are going to think (especially if he's never done this before) "omg he's asking about my credit I'll never qualify. I'm not going to waste my time filling that thing out".

I agree, and maybe he shouldn't fill it out. If his FICO score is 480 where is he going to get approved at anyway? If he has tax liens outstanding with no payment plan on them and they are very large tax liens, he isn't going to get approved/funded anyway. So why even have him fill the application out?

It's not a waste of my time to send out an app in an email and get in his submission.

Actually it's a waste of everybody's time, your time, the merchant's time, the data entry team at your Funder's time, and the Underwriting Team at your Funder's time to go through these "procedures" with a merchant that doing pre-qualification on at the beginning will tell you he clearly doesn't qualify for anything.

this is another big mistake people are making. If a guy grosses 50K and he's asking for 200K, NEVER EVER tell him "There's no way you will qualify for that". Guess what. He's not going to send the app to you, because he's going to send it to me instead after I tell him "Ok great send me this this and that and I'll submit it for 200K". Then when I call him back to close him on 35K "Your credit score is 565 and you have a few negatives in your bank. they wanted to deny you but I talked them into an approval. I think you should jump on this and try to clean up your bank so next time around we can give you more".

Okay but that's a bait and switch. Why not just tell him that our industry approves based on 5% - 10% of your gross annual sales, so if you are doing $600,000 a year expect an approval of $30,000 - $60,000 for this product. So maybe you can get him $40,000 on an MCA and to raise the additional $160,000 maybe he also have outstanding commercial receivables? You can do some A/R factoring on the side. Then maybe he has some commercial equipment that's already paid off? Maybe you can also do a Sale-Leaseback on that equipment as well to further help raise the additional $160,000.

In our industry he is getting multiple calls every day and if one guy tells him he will never qualify for the 200K and another guy says he will submit his app and come as close as possible, he's going to send it to the guy who was more open rather than straight out telling him it's never gonna happen.

And this here is the problem as I outlined above. We aren't paid on application submissions. We are paid on fundings. It's a complete and utter waste of time for you to sit on the phone "convincing" guys to just "shoot you over an app" if the deal isn't pre-qualified to the point where you at least "think" you can fund it.

Unless you are getting paid on application submissions, this approach might do nothing but just clog up your Funder's pipeline with tons of apps and no approvals.

Some Funders might just cut you off altogether if it becomes a pattern.

[Everest]

Nice Post!!!!!

[FUNd]

Businesses change sometimes by the quarter. A guy you can't get approved today, may be eligible for 100K in 3 or 4 months. Getting his application, getting the information, following up, and building rapport puts you first in line when he IS eligible down the road.

I believe in letting anyone and everyone apply. I have had so many merchants decline themselves in our initial conversation, convinced them to take 30 seconds, do the online application, and a week later they are thanking me profusely for saving or helping their business.

Get the app boys.

[AndyYSCISOdept]

John I agree with you on your points about a waste of time. You would not believe (actually you probably would) the amount of straight "garbage" submissions I get that have been sent to me with all the wrong kind of expectations because the REp/Broker has promised the guy the moon in order to get the app in. Getting an app that way isn't only a waste of time, it starts to leave a bad taste in my teams mouth and my underwriters mouths and, because we are only human, we start taking everything that broker says or sends with the proverbial "grain of salt".

[John Galt]

Well put.

[FUNd]

Don't submit the apps to your funders that aren't going to get approved. Pretty simple. Doesn't mean you shouldn't get the app in house.

[AndyYSCISOdept]

Don't submit the apps to your funders that aren't going to get approved. Pretty simple. Doesn't mean you shouldn't get the app in house.

I agree with that.

[jotucker1983]

Businesses change sometimes by the quarter. A guy you can't get approved today, may be eligible for 100K in 3 or 4 months. Getting his application, getting the information, following up, and building rapport puts you first in line when he IS eligible down the road.

I believe in letting anyone and everyone apply. I have had so many merchants decline themselves in our initial conversation, convinced them to take 30 seconds, do the online application, and a week later they are thanking me profusely for saving or helping their business.

Get the app boys.

I agree with this and I do this as well, I just don't take it the additional step further by having the guy fill out an application. After the pre-qualification is done, if I can't do anything with him right now because for example, he's stacked to high hell lol, then I setup a time in let's say 60 - 90 days to touch base to see where his status is.

I would touch base in 90 days, let's say the balances are down, everything else is still efficient, then I would go into the process of having him fill out the app and provide the last 3 - 6 months of statements.

John I agree with you on your points about a waste of time. You would not believe (actually you probably would) the amount of straight "garbage" submissions I get that have been sent to me with all the wrong kind of expectations because the REp/Broker has promised the guy the moon in order to get the app in. Getting an app that way isn't only a waste of time, it starts to leave a bad taste in my teams mouth and my underwriters mouths and, because we are only human, we start taking everything that broker says or sends with the proverbial "grain of salt".

Yeah, a lot of Brokers are just in "sales mode" and the "sales mode" is all about "closing". So to them, they "close" if they convince a merchant to send an application back. The only issue with this is that you aren't paid based on sending an application back, you are paid only when you fund something, that is unless you are somehow getting paid on app submissions.

[ridextreme]

Don't submit the apps to your funders that aren't going to get approved. Pretty simple. Doesn't mean you shouldn't get the app in house.

this x100

If a broker is asking "How's my credit" they might think in the back of their minds they need good credit. 600 to us is gold but to them is horrible credit and if they think they need good credit, they won't bother filling out an app, especially if they were asked "How's your credit?"

An app should never be shotgunned around to everyone to see who bites, especially from the smaller shops and one man operations who don't run credit or do their own duediligence first.