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  1. #1

    Stealing Deals

    So I was talking to one of my clients yesterday and he started to lament about how the industry as a whole has a lot of "theft" in regards to brokers submitting deals that are then blatantly taken from lenders.

    I'm wondering why anyone would do this from a business model point of view. Wouldn't stealing submissions lead to a bad rep or at the very least, ensuring brokers no longer submit?

    From what I was told, even though files are commonly taken, it doesn't really affect the lenders who do this. I'm trying to grasp the logic behind both the taking of files and the logic in the brokers who would continue to submit to them. I'm wondering if anyone could shed some light as I am highly curious. In my mind, it's analogous to giving money to an investment broker knowing he's not going to invest with you and take your money.....and then continuing to invest with him. it's not computing for me.

  2. #2
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    some people cant see long term and only see the dollar signs in their eyes . the other thing is if you do not do constant business , then they dont really care about you . now will it create a bad rep if joe basement shop claims they stole his only deal . i doubt it . with the large shops i doubt they ever see their deals being stolen

  3. #3
    Veteran Reputation points: 157541 J.Celifarco's Avatar
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    Quote Originally Posted by Michael I View Post
    some people cant see long term and only see the dollar signs in their eyes . the other thing is if you do not do constant business , then they dont really care about you . now will it create a bad rep if joe basement shop claims they stole his only deal . i doubt it . with the large shops i doubt they ever see their deals being stolen

    I see banks stealing deals as an act of desperation. They cant make money just funding submissions so they look for other ways to supplement the income to survive. I also believe these will be the first banks to fold. That said it is brokers who created the problem. By getting a deal in and submitting it to 10 banks you are forcing 10 companies to waste money on resources on a file that they only have a 1 in 10 chance of funding. The broker knows they will probably never fund the deal with 7 of those companies but they submit it anyway.
    Over submitting deals to banks forces banks to increase staff to keep up with submissions yet they are not funding most of these deals. This over submitting makes the banks look for ways to monetize all the files they dont fund. I 100% think it is wrong for any bank to steal any deal. There is no way to justify taking someone else's work. That said if the brokers did a better job submitting files to banks where they planned on funding them a lot of these banks may not have had to steal deals to stay in business. The Banks that do this are wrong but I really believe this is where the problem started
    John 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

  4. #4
    Senior Member Reputation points: 32550 Funder Mark's Avatar
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    Quote Originally Posted by J.Celifarco View Post
    I see banks stealing deals as an act of desperation. They cant make money just funding submissions so they look for other ways to supplement the income to survive. I also believe these will be the first banks to fold. That said it is brokers who created the problem. By getting a deal in and submitting it to 10 banks you are forcing 10 companies to waste money on resources on a file that they only have a 1 in 10 chance of funding. The broker knows they will probably never fund the deal with 7 of those companies but they submit it anyway.
    Over submitting deals to banks forces banks to increase staff to keep up with submissions yet they are not funding most of these deals. This over submitting makes the banks look for ways to monetize all the files they dont fund. I 100% think it is wrong for any bank to steal any deal. There is no way to justify taking someone else's work. That said if the brokers did a better job submitting files to banks where they planned on funding them a lot of these banks may not have had to steal deals to stay in business. The Banks that do this are wrong but I really believe this is where the problem started
    Preach it!! 100% the truth. The majority of deals I see get declined, because the brokers do not know how to look at a deal, and find out which companies have the best chance of getting offers made.

  5. #5
    Greed is real, it's usually stupid too. Someone would rather cash out as much as they can on one deal rather than work with you and make 10 to 100 times the money over the course of the relationship. I run into a lot of these greedy people and I honestly don't understand them. I have never had a lender bypass me on a deal though. I'm either lucky or have chosen my partners well. I have had both sales people and lead sources try to bypass me on deals, the lenders have always informed me immediately when it happens though and nothing has ever gotten away from us due to it.
    Just be careful who you work with and vette your lenders and brokers.
    David Power
    F5 Financial Inc.

    WEB: F5 Financial Inc.
    Email: F5 Financial
    Member HICC

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    Last edited by anonymous; 08-12-2016 at 08:21 PM.

  7. #7
    Member Reputation points: 29 trhall47's Avatar
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    There's multiple other factors at play, for instance:
    Everybody in the Industry uses the same lead sources and lets just say we all use a different one, plus all of the lead generation sources, the lenders with there own outbound sales teams etc.
    It is extremely difficult more now than ever to find a merchant who A) hasn't heard of what we do, B) hasn't been shopped to everybody.
    Also keep in mind there are various companies who provide triggered leads, call there data base once the broker protection has expired, as well as UCC.
    Many times its not the Lender stealing a deal but it could be one bad seed within the organization.
    --

    Timothy Hall
    Director of Sales and marketing.
    714-200-3297
    thall@aprogressinmotion.com
    www.aprogressinmotion.com

  8. #8
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    One of the leading causes of circumventing is the submission of an over qualified or under qualified deal.

    Those who don't advise their Merchants of the ability to get what they request may leave themselves vulnerable for the Merchant to be solicited and advised otherwise.

    "Sales" vs. "Assisting" a Business Owner who does not understand an Alt. financing product and the brokering of their file is the #1 issue third parties have in closing deals and leaving them vulnerable for some one else to it do. Doesn't matter what type of entity it is- Broker, Direct Funder- it happens. An ISO who is submitting a deals needs to be just as smart (or smarter) as the partner they submit their files to.

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