[MCNetwork]

Can you give me an example buddy lol?

So the client is a restaurant, with 650 FICO, clean banks, no liens, no outstanding MCAs, no prior bankruptcies, no issues with their landlord, 3 years in business and doing $500,000 a year in sales. Prefers a quick turnaround of 6 months.

Broker A: Offers $30,000 on a 6 month payback, with a 1.35 factor as a merchant cash advance from a company that is doing the underwriting process mainly by manual review which means the process will take longer.

Broker B: Offers $30,000 on a 6 month term, with a 1.18 as an alternative business loan from a company that has majority of the underwriting process automated so that the closing process takes about a day.

Can you give me an example of what Broker A is going to say, to convince said merchant to use him over Broker B? I agree with you that it's not just about pricing, it's about the entire scope of the deal, but what could Broker A possibly say to win this deal from Broker B?

Haha a 17 point difference is a tough hurdle to overcome! Regardless, this is how I'd approach it. Keep in mind, that I'm going to throw in some assumptions about the various lenders that the brokers are dealing with in order to make this work

"So Mr. Merchant, I agree that my rate is much higher than my competitor's but let's take this into consideration. The funder I'm working with, XYZ Advance, is an up and coming company in the cash advance space. They fund over $15 million per month and they can go up to $500K per location. Your business is continuing to grow and when you get to the next level, this relationship will be valuable to you as you seek to expand. I've been working with them for 5 years and my clients couldn't be more thrilled with them. Their renewal policies are extremely flexible and you can get additional funds in as little as 60 days. In addition, I can provide you a generous prepayment schedule where you can save up to 50% on the cost of funds if you can pay this off within 90 days. Let's face it, you're entering your busy season so I think it would be beneficial for you to take advantage of this option.

Now my competitor, Goliath Funding, does have lower rates but here's the thing with them. They are a mostly automated shop, so if you have customer service issues you'll run into problems. You're just a number to them because they are the 2nd largest company in the industry. Not only that, they can't do more than $150K on an advance so when you grow you'll be capped at this level if you need more financing. Also, in order to renew with them, you have to be 50% paid down whereas with my guy, you only need to be 30% paid down. So in the end, I can get you more money, more often, with my funder than with Goliath Funding. Not only that, have you read the news lately? Goliath Funding went public not so long ago and their stock has been collapsing. I'm not sure that this is the long-term horse you want to bet on. My lender, XYZ Advance, is privately funded and financially strong. This is an impeccable company to get involved with.

Mr. Merchant, I ask you to look at the forest from the trees and work with me and XYZ Advance. I've been working tirelessly in financial services for over 10 years. I've build a reputation as being a hard worker and I fight for all of my clients. I work weekends and you can call me 24/7 if you have any issues. I'm here to build a long term relationship with you and your success is my success. I only ask that you give me this opportunity to show you what I can do for you. So let's start this relationship and turn your company into a $2 million business within 4 years!"

[jotucker1983]

MCN,

That's a great post lol, and I would actually do the same with the MCA product in terms of explaining the long term aspects of the reload feature which doesn't have a "paying interest on top of interest" aspect to it, which can be similar to a credit line's functionality.

I would just focus on providing the full solution to the merchant in terms of quality, price and support, not just quality and support.

Quality: This is in relation to getting to the approval amounts noted and providing good options in payback cycle from 6 - 18 months. If it's an alternative loan, explain how the loan can work to build their business credit, if it's an MCA, explain the reload feature going forward which would have the product operating similar to a credit line.

Price: If it's A Paper, price it in A Paper range, which is 1.12 - 1.20 for 6 months, and 1.25 - 1.30 for 12 months.

Support: Discuss your years in business and professional competency, online statements, support team, recommendations on getting them out of the alternative products and into conventional ones, etc.

A lot of these large broker houses seem to focus on getting 10 - 15 points by pricing A Paper like C Paper, they better hope I don't run across that merchant lol.

I will provide the same (or even in some cases higher levels of) quality and support functions, but I would give the merchant "proper pricing" based on its marketplace standing.

I wouldn't price a Restaurant Merchant Account with a 100 BP mark-up, and I wouldn't price an A Paper Restaurant with C Paper pricing on the funding side, not because I'm just competing on "price", but because that's not the proper pricing for that deal based on marketplace standing.

[AndyYSCISOdept]

MCN,

That's a great post lol, and I would actually do the same with the MCA product in terms of explaining the long term aspects of the reload feature which doesn't have a "paying interest on top of interest" aspect to it, which can be similar to a credit line's functionality.

I would just focus on providing the full solution to the merchant in terms of quality, price and support, not just quality and support.

Quality: This is in relation to getting to the approval amounts noted and providing good options in payback cycle from 6 - 18 months. If it's an alternative loan, explain how the loan can work to build their business credit, if it's an MCA, explain the reload feature going forward which would have the product operating similar to a credit line.

Price: If it's A Paper, price it in A Paper range, which is 1.12 - 1.20 for 6 months, and 1.25 - 1.30 for 12 months.

Support: Discuss your years in business and professional competency, online statements, support team, recommendations on getting them out of the alternative products and into conventional ones, etc.

A lot of these large broker houses seem to focus on getting 10 - 15 points by pricing A Paper like C Paper, they better hope I don't run across that merchant lol.

I will provide the same (or even in some cases higher levels of) quality and support functions, but I would give the merchant "proper pricing" based on its marketplace standing.

I wouldn't price a Restaurant Merchant Account with a 100 BP mark-up, and I wouldn't price an A Paper Restaurant with C Paper pricing on the funding side, not because I'm just competing on "price", but because that's not the proper pricing for that deal based on marketplace standing.

These are great points, would you mind if I printed them out and gave it to a few of the newbies here?