[cronius]

I've been generating leads for commission for a few years now and I only work with companies that take the lead and handle the followups, documents, etc. Generally I get about 70-110 leads per month that have revenue greater than 120k per year and we convert 2-3% of those into an average loan/MCA/SBA of 30,000. I currently get 50% of the commission which is about 6-8%(so 3-4% for me) on average of the loan(including renewal's). Most of what my current company does is just brokering, not direct lending, so commissions are not as high as they could be, but they do handle everything. In the past 3 years I have generated leads that resulted in about 3 million in loans. Out of that I got paid about 84k.

For someone with my track record are these normal numbers? Could I be getting higher commissions with other companies or by hiring someone to do the followups instead of using a broker? Should I ask for a higher percentage? Should I find a company that does only in house loans(I assume they could pay me a higher chunk of that 30% average interest)?

I'm looking to really turn up my marketing soon as I've been basically doing this part time while running another business and I want to make sure I'm working with the right people.

[ridextreme]

if you're just passing on the lead to the ISO and letting them do all of the work, those are above average numbers. If it's working for you like it is, why try to change it only to find out later that you got ****ed.

[HDF]

How are you generating your leads? What is the cost per acquisition?

[Sachip24]

are you asking to see if you are getting a fair deal, or shopping for a better offer?

[Fielding Mellish]

You would make more money selling the leads than you are with this commission arrangement. You're currently making around $25 per lead and many lead generation companies are able to sell Internet leads for $40-$70 each.

[FundingCzar]

You are also most likely missing out on revenue the broker is charging for origination etc separately as a fee. You could get an extra 1-2.5% on every deal, if they are not charging fees make them do so or find a broker that does. 6-8% is a tad low but not terrible. You could also do some cross channel marketing and try other financial products, marketing, and other services to these same clients to increase revenue.

[jotucker1983]

I've been generating leads for commission for a few years now and I only work with companies that take the lead and handle the followups, documents, etc. Generally I get about 70-110 leads per month that have revenue greater than 120k per year and we convert 2-3% of those into an average loan/MCA/SBA of 30,000. I currently get 50% of the commission which is about 6-8%(so 3-4% for me) on average of the loan(including renewal's). Most of what my current company does is just brokering, not direct lending, so commissions are not as high as they could be, but they do handle everything. In the past 3 years I have generated leads that resulted in about 3 million in loans. Out of that I got paid about 84k.

For someone with my track record are these normal numbers? Could I be getting higher commissions with other companies or by hiring someone to do the followups instead of using a broker? Should I ask for a higher percentage? Should I find a company that does only in house loans(I assume they could pay me a higher chunk of that 30% average interest)?

I'm looking to really turn up my marketing soon as I've been basically doing this part time while running another business and I want to make sure I'm working with the right people.

The production of qualified leads is 98% of our position. If you have a system that is producing leads consistently then you have already won the battle.

The other 2% involves just contacting direct funders/lenders (you can get a good list of these companies from places like deBanked) and telling them about your experience and saying you want to be a Broker. From there, when you produce your leads and qualify them, you just manage the paper shuffling/emailing back and forth during the quoting/closing process.

So what am I saying? Get out of your current arrangement immediately and setup your own funder/lender network. This allows you to control pricing, commissions, and renewals. Also making 8 points on every single deal might not be as competitive, so now you have the ability to take the pricing down so you are still making your 4 points per deal, but you are able to acquire more deals due to more proper/competitive pricing.

How are you generating your leads?

Also OP, never answer this question lol. It's nobody's business what your secret sauce is, as long as you aren't doing anything unethical to generate the leads and as long as you are aware of/in compliance with all related marketing laws, you are okay.

[ridextreme]

So what am I saying? Get out of your current arrangement immediately and setup your own funder/lender network. This allows you to control pricing, commissions, and renewals. Also making 8 points on every single deal might not be as competitive, so now you have the ability to take the pricing down so you are still making your 4 points per deal, but you are able to acquire more deals due to more proper/competitive pricing.

I disagree with this. The OP stated he/she does this part time while running another business. Setting up your own ISO shop becomes a full time endevour, only to make a few more points (10 to 12 on average) which might not be worth it for some people, especially if they need to give up whatever else they were doing to find the time.

The question was is it a fair deal, and for someone who is only giving referrals and getting a 50% split in the points to me sounds like a very good deal.

[LeadForensicsGuy]

The production of qualified leads is 98% of our position. If you have a system that is producing leads consistently then you have already won the battle.

The other 2% involves just contacting direct funders/lenders (you can get a good list of these companies from places like deBanked) and telling them about your experience and saying you want to be a Broker. From there, when you produce your leads and qualify them, you just manage the paper shuffling/emailing back and forth during the quoting/closing process.

So what am I saying? Get out of your current arrangement immediately and setup your own funder/lender network. This allows you to control pricing, commissions, and renewals. Also making 8 points on every single deal might not be as competitive, so now you have the ability to take the pricing down so you are still making your 4 points per deal, but you are able to acquire more deals due to more proper/competitive pricing.



Also OP, never answer this question lol. It's nobody's business what your secret sauce is, as long as you aren't doing anything unethical to generate the leads and as long as you are aware of/in compliance with all related marketing laws, you are okay.

John

you are probably one of the most helpful, respectful, insightful, persons on this forum that was some amazing advice. Do you mentor people ? I can tell you have the heart to see people successful and prosper .

[MCNetwork]

To the OP, why is the conversion rate so low? If you're getting 70-110 inbound leads of qualified merchants per month, you should be able to convert 10-20% of them (at a minimum). 2-3% is only slightly higher than cold calling the Yellow Pages. You need to partner up with a shop that can drive your conversion numbers much higher.

[LeadForensicsGuy]

I've been generating leads for commission for a few years now and I only work with companies that take the lead and handle the followups, documents, etc. Generally I get about 70-110 leads per month that have revenue greater than 120k per year and we convert 2-3% of those into an average loan/MCA/SBA of 30,000. I currently get 50% of the commission which is about 6-8%(so 3-4% for me) on average of the loan(including renewal's). Most of what my current company does is just brokering, not direct lending, so commissions are not as high as they could be, but they do handle everything. In the past 3 years I have generated leads that resulted in about 3 million in loans. Out of that I got paid about 84k.

For someone with my track record are these normal numbers? Could I be getting higher commissions with other companies or by hiring someone to do the followups instead of using a broker? Should I ask for a higher percentage? Should I find a company that does only in house loans(I assume they could pay me a higher chunk of that 30% average interest)?

I'm looking to really turn up my marketing soon as I've been basically doing this part time while running another business and I want to make sure I'm working with the right people.

Cronius

This is a phenomenal post. Great way to start off you experience here.
I feel you pain my man. You and I are like minded. I have a background in the industry but got out because I didn't have the proper support or guidance to make my business grow. Now that I am on the Lead Generation side of things. I want to get back into the business as well. I see how easy it is to generate leads and also to capture more quality leads it makes me see how much money I could potentially earn.

Its kind of like the scene in Casino when the high roller wins big and wants to leave but the Mob guys trick him into staying to play longer and he is betting small amounts and even though he is winning he is calculating how much he is loosing because he is not betting at his full potential. LOL!!!

Nevertheless. I think because whats easy for us seems to be very difficult for others it puts us at a bit of an advantage. However I would strongly suggest you follow John's advice. I am in the process of doing the same ting. good luck on the forum and much success to your endeavors.

[Michael I]

I've been generating leads for commission for a few years now and I only work with companies that take the lead and handle the followups, documents, etc. Generally I get about 70-110 leads per month that have revenue greater than 120k per year and we convert 2-3% of those into an average loan/MCA/SBA of 30,000. I currently get 50% of the commission which is about 6-8%(so 3-4% for me) on average of the loan(including renewal's). Most of what my current company does is just brokering, not direct lending, so commissions are not as high as they could be, but they do handle everything. In the past 3 years I have generated leads that resulted in about 3 million in loans. Out of that I got paid about 84k.

For someone with my track record are these normal numbers? Could I be getting higher commissions with other companies or by hiring someone to do the followups instead of using a broker? Should I ask for a higher percentage? Should I find a company that does only in house loans(I assume they could pay me a higher chunk of that 30% average interest)?

I'm looking to really turn up my marketing soon as I've been basically doing this part time while running another business and I want to make sure I'm working with the right people.

either your leads suck or that iso shop sucks or they are not paying you on all your deals they are funding . bottom line that is a terrible conversion rate . it should be like 30% , not 2% .

[HDF]

either your leads suck or that iso shop sucks or they are not paying you on all your deals they are funding . bottom line that is a terrible conversion rate . it should be like 30% , not 2% .

Exactly why I was curious about how (in general) he was generating them. That way one could judge the success rate and also if he was making enough on them to make sense.

[MCNetwork]

Exactly why I was curious about how (in general) he was generating them. That way one could judge the success rate and also if he was making enough on them to make sense.

If he's using Google Adwords or PPC, he's losing money. If he's using organic SEO he might be coming out ahead but not after all the labor involved to do it correctly.

[jotucker1983]

I disagree with this. The OP stated he/she does this part time while running another business. Setting up your own ISO shop becomes a full time endevour

Got it, but I don't see how the OP setting up their own Broker shop takes any significant additional amount of time.

Again, 98% of the business is the production of quality leads. If the OP is doing this consistently right now at about 90 a month on average, then the other 2% of the business is just paper shuffling/emailing back and forth between your chosen funder/lender and the merchant. The bulk of the work is already done. So let's say it takes the OP 20 hours a week to produce what he's doing now, if he becomes his own Broker, maybe that 20 hours goes to 30 hours a week.

To the OP, why is the conversion rate so low? If you're getting 70-110 inbound leads of qualified merchants per month, you should be able to convert 10-20% of them (at a minimum). 2-3% is only slightly higher than cold calling the Yellow Pages. You need to partner up with a shop that can drive your conversion numbers much higher.

either your leads suck or that iso shop sucks or they are not paying you on all your deals they are funding . bottom line that is a terrible conversion rate . it should be like 30% , not 2% .

Guys, I don't think the numbers suck in total because it depends on the variables and nuisances. So the OP is producing 90 leads on average per month and 2% - 3% of these convert to funded deals, or let's just say an average of 2 new deals.

- 90 leads are produced

- 20% of the leads send in completed apps (18 completed apps)

- 50% of the completed apps are approved (9 approvals)

- 25% of the completed apps close (2 new deals)

Many of the internet leads don't go anywhere because the merchant is sending in "contact forms" on about 20 different websites, just shopping around everywhere. Also, many of those merchants don't pass pre-qualification due to low FICOs, not enough sales, etc.

So the 18 apps that do come in, usually about 50% are approved give or take throughout your funder/lender network, and a closing ratio of 25% is pretty solid considering the OP's closers have to add 10 points to every deal, which usually means many of their approvals will go to competitors offering lower factor rates who don't need to put 10 points on every deal.

[jotucker1983]

John

you are probably one of the most helpful, respectful, insightful, persons on this forum that was some amazing advice. Do you mentor people ? I can tell you have the heart to see people successful and prosper .

No I don't do any mentoring right now, but I'm always open to help folks out via PM or email

[ridextreme]

Got it, but I don't see how the OP setting up their own Broker shop takes any significant additional amount of time.

Again, 98% of the business is the production of quality leads. If the OP is doing this consistently right now at about 90 a month on average, then the other 2% of the business is just paper shuffling/emailing back and forth between your chosen funder/lender and the merchant. The bulk of the work is already done. So let's say it takes the OP 20 hours a week to produce what he's doing now, if he becomes his own Broker, maybe that 20 hours goes to 30 hours a week.

Do you really think only 2% of your time is spent on processing submissions (pricing out and closing deals, sending out contracts, chasing submission stips, chasing funding stips, dealing with UW's questions that are requesting additional information and chasing down merchants)?

Most of your time is spent AFTER the application comes in. Sometimes it's less than 50% and sometimes it could be closer to 100%, but it's definitely much more than only 2% of your time.

[jotucker1983]

Do you really think only 2% of your time is spent on processing submissions (pricing out and closing deals, sending out contracts, chasing submission stips, chasing funding stips, dealing with UW's questions that are requesting additional information and chasing down merchants)?

Most of your time is spent AFTER the application comes in. Sometimes it's less than 50% and sometimes it could be closer to 100%, but it's definitely much more than only 2% of your time.

Well, I believe that 98% of the "work" is creating some sort of system to produce a consistent flow of quality leads. If a guy can do that, the "other stuff" (while stressful at times) is pretty simple and straightforward.

It's not difficult to create your funder/lender network and it's not difficult to have a decent closing percentage because again your system should be producing leads of merchants who are seeking alternative financing, and who generically qualify for advances/alt. loans for the most part.

Now, what is difficult is creating a system to produce a consistent flow of quality leads (new potential customers). That's what is choking out many of these broker offices, they just aren't getting a lot of quality new potential customers coming in.

[Karen37a]

I do not believe that persons numbers and Id bet on it. No way on earth some part time guy is getting those numbers on "qualified leads"

Anyone in the industry know that newbies think a lead is someone who says "email only". Or someone who thinks its a credit card or a 5 % loan for 30 years.

The hardest part of this business is not getting someone to say "yes I can maybe use some money, send me an email" who wouldn't say yes? the hardest part is getting the person to send the documents in and an application to run their credit etc. Then send out a contract and get it to come back signed.

If someone is paying you for what is in essence a "referral phone number or lead" , you are getting more than your fair share.

If its really a glorified UCC lead ...2 cents . yellow pages or email address ...free

**Another thing . I am bored with the back office people chiming in about how easy it is to get leads, go do it and get rich. Whats stopping you?

The question is ...What do you consider is a "lead", how did you get it and what parameters are you going over on the phone to quantify, what did they enter into an internet system?

Is this "lead" a phone number from the yellow pages or ucc lead? Or a Pre Qualified transfer lead with someone ready to take money who understands the process or had a MCA before.

An internet lead looking for an MCA? Not some crazy system that just gets anyone's number..i have the yellow pages.

[Karen37a]

Another thing. People who are "pros" in this industry on on these boards saying so and so backdoored me, so and so didn't pay me my commission, that one over there didn't give me my renewal , this one lowered my commission, claw back .

Now some part timer who can close 100k a month, doesn't do any of the work, wants more money , and he has a good working relationship with someone lol

You want to turn over your book of business next?.Or sell your leads ??

If you made that money with out collecting docs ( which I know you didn't ) or dealing with any of the drama that goes with the close..stay where you are at.

( nice entry though, reverse close with the half twist)

[cronius]

Thanks for all the replies, it does seem like setting up my own operation would be the only real way to increase profits aside from trying to improve conversion rates. That being said I don't know if I'm qualified to do that as I have no sales experience when it comes to loans and not too much other experience in this industry aside from what I see on my end, which is just to send as much as I can of leads that get $120k a year in revenue or more.

For people curious about how I'm doing this part time, I'll say first that I've been a programmer and tech professional for over a decade and have actually been programming since I was 10. I can't sell on a phone but I know the ins and outs of internet marketing on a level where I can do this part time. The actual method I'm currently using, though there are others I know of that I may expand into soon, is a combination of optimized landing pages, re-marketing, social media, email marketing, and a good deal of tracking and optimization. Qualified leads resulting from this have generally filled out a web form/pre-application. I spend maybe 6 hours a week actually working on this, the rest of my time is on my other business, clients, and optimizing or creating new methods to market. That being said, I could probably automate the whole thing, though I prefer to fine tune everything while doing the day to managing of leads that come in. My numbers are legitimate but there is no free lunch, they are the result of years of hard work in a skill set that I have used since my childhood.

[Karen37a]

>>>>( nice entry though, reverse close with the half twist)

Backdoor close. Knew the pitch was coming.

I have a degree in computer science/programming , never used it, I am old ...assembler, pl1, fortran, cobol 1, 2, rpg 1 2 3 ..i can list more.

Optimized landing pages of 100 non qualified leads can not generate those numbers

Nothing gets around the closer who picks up the phone to smile and dial..its a numbers game and the numbers are the numbers, are the numbers are the numbers.

I wish I could just automate, wouldn't life be grand . People do not just take mca cash advances out that way, they just do not. Someone needs to write a book so all the hopeful people buy it to find a shortcut, then then the only one who will make money is the guy who wrote the book .

And then he can say..you must be doing something wrong, buy the course for 5k to show you the next level

[cronius]

>>>>( nice entry though, reverse close with the half twist)

Backdoor close. Knew the pitch was coming.

I have a degree in computer science/programming , never used it, I am old ...assembler, pl1, fortran, cobol 1, 2, rpg 1 2 3 ..i can list more.

Optimized landing pages of 100 non qualified leads can not generate those numbers

Nothing gets around the closer who picks up the phone to smile and dial..its a numbers game and the numbers are the numbers, are the numbers are the numbers.

I wish I could just automate, wouldn't life be grand . People do not just take mca cash advances out that way, they just do not. Someone needs to write a book so all the hopeful people buy it to find a shortcut, then then the only one who will make money is the guy who wrote the book .

And then he can say..you must be doing something wrong, buy the course for 5k to show you the next level

If you have a programming degree and any level of creativity making a good amount of money is fairly easy now days. Business is the process of automation, I do one job, someone else does another job. The market pays us both for what we do. A course that advertises you need to study programming and be self employed for over 17 years to make 50-70k per year relatively passively is hardly something anyone would buy. I'm simply stating what my life has been thus far, I do not believe in free lunches, everyone gets their due in how much effort they put in.

[Karen37a]

The point of this whole thing is that You cant get 100 non qualified leads and turn them efficiently...or have a huge closing ratio . Period the end.

I am a salesperson and tossed my computer science degree out the window with the 22k in income they offered back in the 80's. I went to wall st.

You cant out close me in sales and it will be very hard for you to produce someone who could. I wouldn't make those numbers .

Believe what you will and try to sell whatever it is down the road. I know it isnt true.

[cronius]

The point of this whole thing is that You cant get 100 non qualified leads and turn them efficiently...or have a huge closing ratio . Period the end.

I am a salesperson and tossed my computer science degree out the window with the 22k in income they offered back in the 80's. I went to wall st.

You cant out close me in sales and it will be very hard for you to produce someone who could. I wouldn't make those numbers .

Believe what you will and try to sell whatever it is down the road. I know it isnt true.

For me the point was to work smarter not harder, I can't close more sales than a seasoned professional, but I can automate my marketing to the point where I get enough leads that even if I tiny percentage convert I have expended less effort to make more money than manually doing it. That being said, I would prefer to work with seasoned professionals to improve my results that much further.

If you have programming experience you might be wise to look into automating and programming internet marketing processes, there is alot of growth occurring there.

I don't have anything to sell, unless you count the advice to stick with something for decades until your skills are so good that you can actually pull off a modest somewhat passive income. Which I just said here for free. There are no secrets, if you really want to be in disbelief take a look at some guys like Gurbaksh Chahal who was in the 100s of millions by age 25 through internet marketing.