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10-23-2015, 01:02 PM #11jotucker1983Guest
Ride Extreme,
I think you make some good points, but I wanted to add to the discussion between you and John Galt.
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?
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.
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.
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.
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