Originally Posted by
getitfunded
I wouldn't say it's dead, it's reluctant.
Since May we have slowed down, picked-up, leveled, slowed down, and then picked back up. The need for funding is absolutely still there, clients are still filling out applications to get offers but they all seem very unwilling to move forward. This is even with merchants we've funded before that KNOW we just put a great deal in front of them - They are turning down good offers to try their luck with SBA, main street funding, new banking relationships, or wherever they can get $150,000 at 5% when they are depositing $50K monthly with a 600 Fico (ha).
We have also only focused on essential businesses since April and our best performing portfolio since May has been our equipment leasing one. Followed by SBA, then invoice factoring.
Renewals have also been nice and much needed during this time.
I would still include cash advances, splits, etc. but not have it be your primary portfolio at this time. - (Unless it's performing well)
I would start finding new ways to approach clients that focus on the near-term recovery/performance and then into the long term initiatives that the business has. Really take the time to understand what your clients needs are so you can come up with a strategy and timeline that lays out the next 5-years and what they will need for operating capital, equipment, etc. during the 5-year period. Clients want long term relationships that they can trust are going to be there for them, not just now, but in the long run. Get the next steps locked in on paper out sent out, check-in to review the account every month, get updated statements, financials, etc. Instead of finding quick deals where you fund the max amount (just because you can) and then hope for a renewal later down the road, set the expectation of long term relationship from the start.
First, start by looking for clients that will be good for 3 - 5+ transactions per year
[Example: A larger contractor will most likely upgrade equipment every few years, have projects where they need working capital to initiate on a yearly basis, and invoices that can be factored when they are waiting to receive payment.]
Once you have some solid clients, do your absolute best to manage their account, stay in touch, and follow through on your promises.
Unlike direct lenders, brokers have an advantage in this market because they are able to offer different products across other lending spaces. The goal is to not waste time trying to do every deal, but find the options that you can offer that will add the most value to your clients and that helps you create a niche for yourself.
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