[Vfunding]

Can't help but to chuckle at this thread. I can understand why a newbie would wonder what it takes to get "approved" and maintain a relationship with a funder... but in reality funders are DYING for business right now. Although they might not admit it, most will take anyone who claims to have deals. The most scrutiny you will be put through is a background check (with the exception of 1 or 2 of the big ones). I've been in this business for years and I have never received more email blasts and cold calls from lenders begging me for submissions on a daily basis. Deal flow is spread out among more competitors than ever. Cost per acquisition is at an all time high and the majority of fresh deals coming from web searches are being sucked up by direct lenders' in house marketing spends. Times are changing. We are getting attention from funding sources on individual deals that used to just let deals fall into an abyss of 500 other approved deals. We are hearing things on funder follow ups like "what are your other offers, tell us and we will beat it", or "we will give you a 2 point bonus if you close this deal before the end of the week".

[BIGTYME973]

great information!!!

[jotucker1983]

Can't help but to chuckle at this thread. I can understand why a newbie would wonder what it takes to get "approved" and maintain a relationship with a funder... but in reality funders are DYING for business right now.

The industry itself is going through a shake-out right now because the handful of "big boys/established players" are sucking up everything, while everybody else is fighting over the crumbs.

- Methods like UCC marketing aren't working as much anymore, because we exposed the UCC marketing technique on public forums and in publications. I remember watching this crap in 2012 and 2013 thinking to myself, "Why in the hell are these guys exposing the UCC marketing method like that on a public forum for?" Methods like UCCs were how the small guys could compete with the big boys, but no more.

- General Marketing costs in terms of internet, radio, print, TV, etc., are at an all time high, however, the "big boys/established players" can play in that field due to their marketing budgets, the small guys can't.

- Strategic Partnerships that produce exclusive leads/data is something that is obviously working very well, but again, only the "big boys/established players" have access to said networks, the small guys don't.

- Merchants are more price sensitive today than ever before, causing price slashes, which makes it harder for the small guy to stay in business.

- Regulation is coming (whether we like it or not) which will require licensing requirements for every broker, in which said costs would choke out the little guy while the "big boys/established players" will continue to dominate.

[fma123]

there is this wonderful book call "Blue Ocean Strategy"...read it, practice it and you will never EVER worry about having enough business plus you will not lose sleep because of competition...

Big shop or small shop forget the "Art of War" and instead swim in the "Blue Ocean"...

Oh and a Little advice- figure out how to syndicate on your deals otherwise you're gonna fry soon ciao ciao

[anonymous]

Nothing for nothing, but that sounds like a terrible book. Forget the art of war and swim in the big blue ocean. Who are you, the Dalai Lama. The art of war is one of the best pieces of literature ever written (IM not so HO).

[WestCoastFunding]

Regulation is coming (whether we like it or not) which will require licensing requirements for every broker, in which said costs would choke out the little guy while the "big boys/established players" will continue to dominate.

What regulation? Do we really believe Republicans in congress and Chuck Schumer are interested in adding financial services regulation? And what would licensing look like? California? They couldn't stop MCA brokers, just traditional financing brokers. Sure, regulation may come in years to come, but it's hard to see how it's anywhere in the near future.

[anonymous]

^ agreed

[Funder Mark]

What regulation? Do we really believe Republicans in congress and Chuck Schumer are interested in adding financial services regulation? And what would licensing look like? California? They couldn't stop MCA brokers, just traditional financing brokers. Sure, regulation may come in years to come, but it's hard to see how it's anywhere in the near future.

I can see regulations about fees, defaults, communications, robo-dialing, not so much about rates, terms, commissions or stacking for a long while.

[WestCoastFunding]

California didn't quite think through their regulations. The net effect is more small businesses will be steered toward cash advances instead of APR products offered by SBA and alternative lenders like Funding Circle. I don't even know why we'd want to interfere with B2B transactions like cash advances anyway. These business owners are adults and don't need their hands held (same with funders).

[RickyR3712]

The industry itself is going through a shake-out right now because the handful of "big boys/established players" are sucking up everything, while everybody else is fighting over the crumbs.

- Methods like UCC marketing aren't working as much anymore, because we exposed the UCC marketing technique on public forums and in publications. I remember watching this crap in 2012 and 2013 thinking to myself, "Why in the hell are these guys exposing the UCC marketing method like that on a public forum for?" Methods like UCCs were how the small guys could compete with the big boys, but no more.

- General Marketing costs in terms of internet, radio, print, TV, etc., are at an all time high, however, the "big boys/established players" can play in that field due to their marketing budgets, the small guys can't.

- Strategic Partnerships that produce exclusive leads/data is something that is obviously working very well, but again, only the "big boys/established players" have access to said networks, the small guys don't.

- Merchants are more price sensitive today than ever before, causing price slashes, which makes it harder for the small guy to stay in business.

- Regulation is coming (whether we like it or not) which will require licensing requirements for every broker, in which said costs would choke out the little guy while the "big boys/established players" will continue to dominate.

John
One question for you. Why are you still in the industry? From a lot of your recent posts it seems that you feel there is no money left here to be made. How long will your renewals carry you?

[WestCoastFunding]

There is more money to be made than ever if you have creative ways to market and know how to effectively broker deals. Businesses will always need money. Some will have bad credit. Some will need it immediately. As long as there is that need, there will be cash advances to fill this gap in the commercial finance industry. The key is finding that segment and showing them the value of your services. If you're exclusely relying on UCC lists, then yeah, don't expect to scale. Time to change it up.

[mcaguru]

Call me one evening at 7PM EST and will be happy to help. I am in the industry from 2005.

[jotucker1983]

John
One question for you. Why are you still in the industry?

I'm actually on my out of this side of the industry and going over to pursue opportunities in other areas of Commercial Finance.

There is more money to be made than ever if you have creative ways to market and know how to effectively broker deals.

I respectfully disagree with this. There is "money" to be made, but not "more than ever" unless you are one of the big players like I described who can obtain some sort of exclusive data or who can deploy large marketing processes.

Businesses will always need money.

This is 100% true, but just because they need money doesn't mean they need "our" money. I honestly think in a lot of ways, our side of the industry has sort of peaked.

[WestCoastFunding]

I respectfully disagree with this. There is "money" to be made, but not "more than ever" unless you are one of the big players like I described who can obtain some sort of exclusive data or who can deploy large marketing processes.


This is 100% true, but just because they need money doesn't mean they need "our" money. I honestly think in a lot of ways, our side of the industry has sort of peaked.

Just gotta change up marketing. I don't find myself with a ton a CAC costs and growing daily. As far as the MCA side having peaked, I don't see it that way at all. With the collapse of DealStruck, tightening up of guidelines at Funding Circle, the mess and LendingClub, and all-around confusion with the institutional lenders, more mid borrowers are going to find themselves needing Cash Advances.

[jotucker1983]

As far as the MCA side having peaked, I don't see it that way at all. With the collapse of DealStruck, tightening up of guidelines at Funding Circle, the mess and LendingClub, and all-around confusion with the institutional lenders, more mid borrowers are going to find themselves needing Cash Advances.

Yeah but those lenders, technically, are like getting financing from the bank (because the merchants that get approved by those lenders could technically go to the bank for the most part).

So it would be like a "bank decline lead" in a lot of ways, in which some of them convert, but do you have experience with a lot of them converting? I haven't had that experience. Of course they are interested in the pitch because the bank declined them, but once they see what the costs are going to be and the short terms, many of those "bank decline leads" go nowhere because they aren't willing to pay the price.

[WestCoastFunding]

I don't know, not many small companies in need of 100,000 for advertising can go to a bank for a loan. But Funding Circle fills that need if you want a reasonable rate. Plus they have a zero prepayment which is nice as a SBA bridge. But if they (and some of the APR products) pull back then you end up sending them to get a cash advance. I don't know if they split 50/50 or 75/25 in direction. But the net effect will be more advances. And shorter term advances. The days of 18-21 month advances are ending.

[anonymous]

Yeah but those lenders, technically, are like getting financing from the bank (because the merchants that get approved by those lenders could technically go to the bank for the most part).

They're not, technically or otherwise. You can't group two items that are somewhat similar because it suits the point you're trying to make haha, they are two distinctly different products.

The days of 18-21 month advances are ending.

Disagree.

[The Chosen One]

The days of 18-21 month advances are ending.

I totally agree. If you don't recognize the industry trends it might be a good time to wake up. Shorter terms and higher rates across the board.

[anonymous]

Lol, maybe through your sources, sport.

[Karen37a]

I wish people would stop about the no money and regulation thing,

Some people are just no good at sales and the are too pushy or they have no finesse. They are like Trump and the minute you talk with the merchant you are "grabbing them by the Pu**y, or you don't listen to the clients concerns and are trying to slap a 3rd 4th 5th and the merchants see right thru it .They are business people. ( unless you are in that 10-20k range constantly)

This is true in all sales professions..go watch Tommy Boy.

I hate when people make excuses and didn't hone their presentation skills. Its like giving a seminar on a stage..some are great, some are horrible. Or like singing. you cant sing and do not know it and go on American Idol and sing like a cat dying only for Simon to humiliate you.

I had a few kids move to my area.3 days on the phone and they are getting applications in.

( by being nice, informative and helping people the best we can)

Perfect your speaking abilities, stop using "fear inducing language " in your pitch , pull to the close stop pushing, its embarrassing to watch...oh and for God sake stop dropping your drawers/rate in a desperate measure to close a sale before the guy opens his mouth.

Its like you are playing poker and you say " raise ,re raise, no re re raise, no fold, fold fold fold, fold ...im folding, boyy this is a tough table. i have an MBA you know." .....before anyone else had a chance to speak or make a move lol.

I walk by and say "Good God does your wife know where you are? And who let him in here .. let him go home with his pants on and watch at least " Someone else tells me "stfu its a rolex" My partner chimes in"dont ever tell my girl to stfu again, send both home" LOL ........btw thats sales and painting a picture

[jotucker1983]

Karen,

I like your posts but many of the points you made below, in my opinion, come completely secondary in relation to their contribution to any "sale" that's made in the industry.

Some people are just no good at sales and the are too pushy or they have no finesse.

I hate when people make excuses and didn't hone their presentation skills. Its like giving a seminar on a stage..some are great, some are horrible. Or like singing. you cant sing and do not know it and go on American Idol and sing like a cat dying only for Simon to humiliate you.

You can hone your "presentation" skills all day long, the bottom line is that you are still selling a short term, very high cost, alternative financing product.

You are still going to have to approach this from a business standpoint to find people who are firstly in need of working capital now or upcoming, and then secondly, who have limited resources to obtain said capital to where the only viable option is that of an MCA.

Now, that's just the truth of the matter lol. You can hone your presentation skills and be an excellent public speaker all day long, but if you have not scaled your operations to find the right prospects at the right time, who are in need of your alternative, short term, high costing products, you aren't going anywhere. You will just be a "great speaker" with no volume.

That's why my commentary focuses on the business cycle, because in B2B sales when you are selling any type of complex or high costing product, your "level of charisma" or "great speaking ability" comes secondary to a process to find the right prospects who have the business cycle to utilize your products right now or in the near future. The rep who can do that succeeds, even "if" he's not a great speaker, lacks charisma, is introverted, or whatever other "typical" sales advice that is thrown around.

[MCNetwork]

You can hone your "presentation" skills all day long, the bottom line is that you are still selling a short term, very high cost, alternative financing product.

You are still going to have to approach this from a business standpoint to find people who are firstly in need of working capital now or upcoming, and then secondly, who have limited resources to obtain said capital to where the only viable option is that of an MCA.

Now, that's just the truth of the matter lol. You can hone your presentation skills and be an excellent public speaker all day long, but if you have not scaled your operations to find the right prospects at the right time, who are in need of your alternative, short term, high costing products, you aren't going anywhere. You will just be a "great speaker" with no volume.

Not sure what the main point is here John. We work in a multi-billion dollar industry selling high cost alternative funding products. CAN Capital has funded over 6 billion, Bizfi over 2 billion, Yellowstone over 1 billion so there is obviously a huge demand for our "high cost" product. The only thing a rep needs to concern himself with is "how do I capture a small piece of this pie so I can make a good living?"

The way to do it is to smile and dial, and reach out to as many potential customers as you possibly can to build your pipeline. 80% of every business looks for outside capital at some point in it's lifetime. The majority of them do not qualify for bank loans or SBA loans. This is your potential market. The sales people who lament about not getting any good leads, or how terrible our product is, are the ones that quickly wash out of this industry. The ones who are willing to roll up their sleeves, build their sales pipelines and hustle every day are the ones who crush it and succeed. Many of those are here on this forum making great livings. The only reason why there is such a huge turnover among MCA salespeople is because a very small minority is actually willing to put in the work. They fill their minds with self limiting beliefs about why our "product is just too damn expensive", or "all the big funders are getting all the great clients while I'm fighting for scraps so why even bother" attitude. The battle is lost before they've even begun to fight, or they fight for a month or two and quickly give up. As in any selling industry, the winners always find their way to the top and the has-beens will continue throwing shade on the MCA sales profession. Good luck with your next gig.

[ridextreme]

Tip #11: Don't spend all day during prime time hours writing walls of text on DF when you should be busy making money closing and funding deals or prospecting if you're pipeline is empty (free tip of the day) now I gotta get back to my deals knock on wood

[jotucker1983]

CAN Capital has funded over 6 billion, Bizfi over 2 billion, Yellowstone over 1 billion so there is obviously a huge demand for our "high cost" product.

I didn't say there wasn't a market demand, I said that the focus for success should be on scaling your business to reach the right prospects at the right time.

The only reason why there is such a huge turnover among MCA salespeople is because a very small minority is actually willing to put in the work.

I'm sorry, but this is just not true. The huge reason for failure and reps leaving is because they do not have the resources, strategies, data, networks, and budgets to properly compete, as well as, continue to generate quality prospects who are in need of alternative financing.

They fill their minds with self limiting beliefs about why our "product is just too damn expensive",

The product is expensive lol. But hey, there's a reason why it's expensive, right? It's because it's unsecured, no assets are used as security, and many of the merchants (especially restaurants) can go out of business tomorrow. So the risk has to be priced in, correct?

So being honest by admitting that the product is expensive and knowing why it's expensive, again, shows you that you have to scale your business to find prospects who need working capital and who can afford to pay the high costs.

This can be a guy, for example, who wants to add equipment which costs $50,000 but it's going to boost his sales by $200,000 let's just say within a year. He has nowhere to go to get the capital, so I do an MCA for 12 months with a 1.25 which means he pays $12,500 for the capital, in exchange for the $200k in revenue boost.

Your focus is on finding 5 - 20 of those types of "guys" a month and the Yellow Pages won't help you.

or "all the big funders are getting all the great clients while I'm fighting for scraps so why even bother" attitude.

The big players are getting most of the clients lol. With that being said, you have to now figure out a way to be innovative and compete while being profitable, if said way is even possible for you right now.

The battle is lost before they've even begun to fight

You want to promote the Law of Attraction lol.

I, on the other hand, want to stay focused on business fundamentals, market research, and ROI analysis. I want to focus on critical analysis where you do a cost/benefit analysis (positives/negatives), determine estimated forecasts, estimated expenses, and determine if estimated profits are there for you or not.

I don't focus on the business strategy of "name it and claim it" lol.

[jotucker1983]

Tip #11: Don't spend all day during prime time hours writing walls of text on DF when you should be busy making money closing and funding deals or prospecting if you're pipeline is empty (free tip of the day) now I gotta get back to my deals knock on wood

What's wrong with walking and chewing gum at the same time ?