[TB-Commercial]

Hi Guys,

So I've changed my marketing strategies recently, and the good news is I've begun to acquire higher quality clients. A-B paper, and almost bankable. Bad news is, I'm used to C-D paper and that is where most of my relationships are. These clients are looking for lower rates and preferably monthly payments. I feel like I saw a thread around here recently that lists term loan, LOC or monthly payment lenders, but I can't find it! Would anyone mind pointing me to it? If not, here's what I have so far:


-Funding Circle
-No more Dealstruck
-Fundation (bi-monthly)
-Breakout
-Headway (just heard about them, anyone work with them often or do they even accept referrals?)

Thanks in advance for your assistance guys! And sorry for the redundancy on the topic!

[Cfairbank]

TB: one thing to keep in mind when you go to near prime/prime is that commissions there are lower than the advance or short term loan market; most of these lenders typically pay between 1.5% and 3% on funded.

We (Breakout) offer a monthly pay product for qualified merchants. We pay 5 points in commission vs. 1.5 to 3 points with most of our competitors in the near prime/prime, monthly pay space (but, as I've said before in other threads, I wouldn't just use our product for the higher commission -- just see if our product is a good fit for your customers, as we have fewer stips and a looser credit box than most monthly pay lenders -- and we allow the merchant to draw capital with no change in scheduled payment after two months of good performance). While we can beat (and have beaten) Fundation on price, we are, more often than not, a bit more expensive than Fundation (but still quite aggressive on pricing relative to standard pricing in the market), but, again, our credit box is not nearly as tight (so more customers should be able to qualify). For our monthly pay product, terms are between 12 and 24 months, with buy rates that are currently ranging from 1.15x to a max of 1.28x -- for more info, click here: http://dailyfunder.com/showthread.ph...ght=safirstein. And note, if a customer doesn't qualify for monthly with us, you can always "downsell" to our weekly product that has buy-rates starting at 1.08x (and commissions on weekly/daily can go as high as to 12%). If you are already signed up with us, would be happy to provide a more detailed overview of the near prime landscape if you'd like.

You should also add Bond Street and Able Funding for true low-rate, monthly pay products -- both are bank-like rates (but that low rate is reflected in the commission). Funding Strategy Partners also has a good monthly pay for large deals (above 100K). Streetshares has a prime weekly pay product, but it has great rates and is "APR"-based, not factor-based: and APRs are typically less than 30%.

Headway is great, they are a sub of Enova (just like TBB). Strongly recommend you sign up with them. They offer a more traditional LOC with terms (I believe) going out to 24 months vs. the non-standard BLOCs you see in the market today. In most cases I believe, the borrower can pick the term of the LOC. Not sure whether they are currently taking on ISOs, but I would be shocked if they aren't given they are a subsidiary of a public company and likely trying to drive volume.

I'd add Blue Vine to your LOC lineup (they are taking on new ISOs, and also have a factoring product that you can also sell to qualified merchants). OnDeck and Kabbage both obviously have BLOCs, but I dont think Kabbage is taking on new ISOs. The Credit Junction also has great products for larger deals.

For "quasi" or "effective" LOCs, you also have TBB and us (Breakout) that are structured up front as a fixed repayment, but allow draws well before 50% paid down and no acceleration of outstanding interest at the time of add-on. We both also offer A-paper pricing for A-paper deals. While I can't speak for TBB, our buy-rates start at 1.08x (at six months) and the baseline buy-rate is 1% per month (for example, our "baseline" or "minimum" buy-rate for an 18 month term would be 1.18x) -- terms are between 6 and 24 month currently, and our primary product is term loans (not cash advances) and we offer monthly, weekly, and daily ACH remits. And all of our products allow the merchant to draw additional capital after two months of good payment history and consistent (or better) business performance with NO acceleration of outstanding interest ("double dipping") or change to scheduled payments.

In the near prime space, you should also sell be able to sell a SB 7(a) loan and the easiest way to do this is to sign up with SMART Biz. In my opinion, they have revolutionized the way thousands of customers are able to access SBA 7(a) loans.

And if you ever have problem with a large prime deal (or candidly, any large deal for that matter) contact Richard Gerrard (he's on this site). He's given great (and creative) advice/help on seven figure deals that were just completely outside our wheelhouse.

If you want contacts or intros at any of these firms, shoot me an email in signature below.

Good luck!

Carl

Edit to note: you added us before i finished typing!

[mbark]

Can you share your new marketing strategy? Lol

[TB-Commercial]

Carl, thank you SO much for this information. That was very honorable for you to provide referrals, even though you have a product that fits my needs as well.

I realize that each lender is a little different and my go-to guys are not always the right fit. I actually talked with Steve last week and believe that I will certainly be working with you guys quite a bit this season. It's important to me that I send qualified deals to my lenders, and that's why I asked my original question, to ensure I have a variety of options and not try to force a puzzle piece into a space that isn't right. Again, thank you very much for this valuable info.

[bdshaw]

TB,Happy holiday.
Some of the contacts listed are excellent but I think you should also deal directly with lenders of Asset Based Loans and factoring. Most of the companies mentioned are either MCA funders or are funding a derivation of MCA.
Richard will be exellent for you in a variety of products and companies like us can help with factoring and purchase order funder.
Bob Shaw
734-929-3800
rshaw@delancey.com

[TB-Commercial]

Thanks Bob. I'll be completely honest, I'm quite uneducated when it come to factoring/purchase order financing. But you've been a great source of guidance to me recently and I definitely would like to spend more time learning more about how it works. Not very many people are willing to do that in this industry, so I truly appreciate your time. Here's the confusing, if not a bit scary, part for me: does AR purchasing include the lender reaching out to the customers? If so, please pardon my ignorance (due to lack a of knowledge), but I would think that would be extremely time consuming for the lender and possibly embarrassing for the merchant, correct? If so, how do you get past that concern with potential customers?

[bdshaw]

I'm in all day tomorrow and will have plenty of time if you would like to chat
Bob

[TB-Commercial]

Thanks Bob, excited to chat more. Enjoy your evening.

[Cfairbank]

Carl, thank you SO much for this information. That was very honorable for you to provide referrals, even though you have a product that fits my needs as well.

I realize that each lender is a little different and my go-to guys are not always the right fit. I actually talked with Steve last week and believe that I will certainly be working with you guys quite a bit this season. It's important to me that I send qualified deals to my lenders, and that's why I asked my original question, to ensure I have a variety of options and not try to force a puzzle piece into a space that isn't right. Again, thank you very much for this valuable info.

Great, glad to have you on board as a partner! We do have a pretty wide product suite for A and B paper (first position only), so hopefully we can do a good amount of business together!

And no problem, always happy to provide guidance/feedback -- you are thinking about this in the right way (in my opinion at least), and I have no issue offering suggestions for competitive products to folks that are looking to place their merchants with the right capital for each specific business -- paraphrasing what you said, too often folks are trying to fit square pegs in round holes (and it's not just a broker issue, but also a lender issue; that said, we (Breakout) have a different model than most of the other lenders in the market) -- and we view product suitability as one of the big problems in the space. So if someone qualifies with us but has another option with a competitor that is a better fit for their business (whether it is product type, rate, term, payment structure, etc.), while we'd love to have that business, we agree that you should take your client to the best option for his/her business (and you need to have the proper rolodex to be able to do that).

Yes, this mindset can cost us near term revenue. And no (for the cynical folks out there), we aren't saying we are a saint for doing it this way, and that every other model is wrong or "bad". But, right or wrong, product suitability is a fundamental pillar of our business model. And I do believe it's one of the reasons why we have strong relationships with our partners, and why you will never hear of a partner saying we (Breakout) "screwed" them or "back-doored" a deal. We believe that focusing on doing right by our customers and partners, even if it costs us near term revenue, is a model that will lead to the best long-term position and pay-off (especially with partners that are fully aligned with us, as you appear to be!).

Happy to chat if you would like additional color, suggestions, or introductions. Good luck, and Happy Thanksgiving to all!!

[RichardGerard]

Good Morning Carmen,

Many thanks to Carl not only for the kind words- but for the excellent breakdown of the marketplace. As you and I have spoken about certain files, I'm glad I referred you to speak to Carl (and/or Steve at Breakout), as his candor and professionalism demonstrate (and reaffirm) why I did.

I look forward to speaking with you and working on files together..

Best... RG

rg@businesscapitalconsultants.com

[bdshaw]

Richard, I know mom likes you best because I never get and shootouts from you or a
Carl.
Despite that I would say both of you are knowlegable and professional and reps will learn more about the industry if they deal with either if you.
Bo B
ps. Carl, this is where ypure supposed to say something nice.
Happy holiday to all of you.

[Cfairbank]

Richard, I know mom likes you best because I never get and shootouts from you or a
Carl.
Despite that I would say both of you are knowlegable and professional and reps will learn more about the industry if they deal with either if you.
Bo B
ps. Carl, this is where ypure supposed to say something nice.
Happy holiday to all of you.

Ha! Sorry, Bob. My company has spent some time with you on the phone, but I don't think we have had the pleasure of doing a deal together yet; but Bob is a great resource for knowledge in the factoring space (all you need to offer is a cup of coffee). If you have factoring needs, Mr. Shaw is your man (just don't judge him by his typing skills)! He also offers an interesting hybrid product that I think you'll see more of in this space; combining a factor with a working capital loan. Most factors hate what we do, so if you talk about near term trends in our space, that type of hybrid product I do believe is one of them.

[RichardGerard]

Richard, I know mom likes you best because I never get and shootouts from you or a
Carl.
Despite that I would say both of you are knowlegable and professional and reps will learn more about the industry if they deal with either if you.
Bo B
ps. Carl, this is where ypure supposed to say something nice.
Happy holiday to all of you.

Bob,

As ever: too funny.. Yes you are a great resource for those in this space.

Happy Holiday and I'm sure we will speak soon..

RG

[TB-Commercial]

LOL guys! And yes Richard, I thoroughly enjoyed our chat earlier this week as well and I'm already putting together some additional files to discuss with you. I just have to say, I feel quite fortunate to have gotten to know a few of what I consider the top gurus in this space, whom are not only knowledgeable, but genuinely kind and unselfish. Thank you ALL for everything.