[ADiamond]

A MCA is a specific type of financing, useful GENERALLY for clients who are bank-worthy, but dont have the time, or those who are not bank-fundable. If the business qualifies for bank funding, and has no immediate need for money, I don't see any way to sell a cash advance product.

So the question remains, how do we market to bank-worthy clients?

[Kevin Henry-Seacoast]

So the question remains, how do we market to bank-worthy clients?

Anthony,

I am not sure how you sell the MCA product to a bankable customer unless it's based on pure speed. For the bankable client that a lot of assets (AR, Inventory, and M&E), but a small line...the sell is swapping rate for availability and how does it help the business over the next twelve months. I have closed several deals where a Company has a small LOC and lots of assets, but because of dynamics of the business the bank is not willing to increase the line. In most cases a factoring or ABL struture offers a covenant light structure with more availability. You have to work with the client to see if the added availability helps achieve the goals and is it worth the added cost to get there and then flip back to a traditional LOC.

[WhoisKingsley]

So the question remains, how do we market to bank-worthy clients?

Best question pertaining to the action that can be taken now- how do we market to bank worthy clients? Let's reverse this. Are bank worthy clients applying for bank worthy products? Are they even putting themselves our there to be "marketed" to? With the issues consumers are having with the undeveloped process we offer- I seriously wouldn't be captivated by any marketing attempts that are out there (not only because the fitting of our product for what they are expecting) - but we are marketing an alternative bank product like we are stock/mortgage brokers without "service".

The major factor is the changes we need to make internally and combine those changes to create a known standard to the consumer. When this happens- marketing attempts and the way they are done will be completely different than what people are doing or thinking about doing now.

[jotucker1983]

Question:

If there are "so many businesses out there", why are people scrambling over the same UCC's? Why are funds out there only stacking, or funding 4th or 5th positions? If there were truly "all those businesses out there", wouldn't there be enough new, unfunded businesses to keep everyone happy and full?

I believe it's because we are dealing with a reality that our "prime customer" is still the unsophisticated merchant who "just so happens" (randomly) to have a need for working capital at this very moment. Yes, there's about 20 million small businesses in the country that generically qualify for our product, but that doesn't mean we have 20 million potential customers, so the vast majority of the "mass marketing" being spent is just wasted dollars.

Again, the average credit score (considered "fair") in the country is 690, 720 is considered "good credit", less than 670 is considered "poor credit", and under 580 being "piss poor" credit. Of the merchants I get:

- 15% of them fall under 500
- 50% of them are between 520 - 575
- 30% of them are between 600 - 680
- 5% of them are over 690

This means 95% of the merchants who entertain our product have either poor or piss poor credit. On top of this, they usually have a hard time finding all of their bank statements, tax return pages, etc. They are unsophisticated with poor or piss poor credit and it "just so happens" (randomly) that they were in need of working capital when I called them.

A lot of people still call on UCCs because they do not have the resources to find our industry's "customer" in other ways. But the UCC is worn out and tired, you might as well go work at Taco Bell through the drive-thru than to rely on UCCs, you more than likely will make more money.

Wouldnt you agree that a large part of the unfunded market contains a large amount of business owners who do not view a cash advance as a viable option for debt?

Of course, it doesn't matter that there are 20 million small businesses in the country who generically qualify with more than likely over 90% of which are MCA virgins, doesn't mean anything. If their credit isn't poor or piss poor, they usually can get financing from the traditional system. All of the talk of "speed" is one thing, but most small business owners are sophisticated enough to foresee needing capital well ahead of time and can go through the longer process in the traditional system.

SO the question remains, how do you get those merchants to consider an MCA? So the question remains, how do we market to bank-worthy clients?

You market "bank-like" products to bank-worthy prospects (like P2P loans or SBA loans), and you market the MCA along with other alternative products to "non-bank worthy" clients. You don't have just one product, you have several that you could place with a client depending upon their current risk profile.