Margins are dropping and competition is increasing. Over 50 NEW cash advance companies were found in a recent Google search. Many of these are small mom and pop are former mortgage brokers who think they can easily get into the business. NOT.
This is bringing a lot of new competition to the market along with merchants shopping around on the Internet for the best factor rate. This means that it is important to get the merchant locked in sooner rather than later to a contract.
NEW PRODUCTS: The American Microloan 1.12 factor is good, but can only be used with merchants with excellent credit.
Other lenders are specializing in refinancing other cash advance deals at a lower factor rate.
A plethora of new cash advance lenders have entered the market. These new lenders are hungry for business and approve a lot of deals that other lenders will not. As a broker it is important to stay on top of these new lenders entering the market and search out these new aggreesive funders to fund deals in this more compettitive environment. Email me for a list of these lenders at mikedoesbooks@yahoo.com.
Tuesday, March 4, 2008
Tuesday, January 22, 2008
Wall Street Journal Tightens Business Credit
NEWS FLASH. Credit markets tighten. From the Wall Street Journal front page Tuesday, January 22, 2008. "In particular, start-up and smaller companies are finding that banks are setting higher rates, seeking more collateral or lending smaller amounts." This is actually good for us in the cash advance industry. As traditional banks tighten up small and medium sized businesses will have to turn to alternate sources of fianancing like the merchant cash advance to get funds for cash flow and expansion
Cash Advance Minimums to Rise to $10,000
Tired of chasing all those small deals? Don't worry, you won't have to starting soon. Many of the cash advance "banks" are planning to raise their minimums to $10,000 per month in credit card processing volume in the near future to get deals funded. This means that a lot of the marketing that targets low-end customers will no longer be as viable. It also means that the banks that continue to do deals in the low end, say $2,500-$5,000 a month in credit card processing will get more business. I see cash advance banks that take the smaller deals as developing stronger relationships with ISO's as it makes more sense to do most of your deals with one bank that can handle all your business.
Tuesday, December 11, 2007
Is it okay to STEAL deals from ex-employers
Personally, I never stole a deal. Didn't need to...yet. But I did ask a top NY corporate attorney if I COULD take customers from one company to another. She said her interpretation of the law is that if you have PREVIOUSLY made contact with an account it is okay to contact the account at a new company. This, she said, is especially true for example, if the account has your personal cell phone number, calls you on it and says they only want to deal with you.
What she said is definitely against the law and could end you up in jail, is, if you take a list of customers from one company that you have never spoken to and called them from a new company. This is called theft of corporate data. Bad, bad sales-rep. Don't do it.
What she said is definitely against the law and could end you up in jail, is, if you take a list of customers from one company that you have never spoken to and called them from a new company. This is called theft of corporate data. Bad, bad sales-rep. Don't do it.
Best closing lines
Take it or leave it!
I don't care, go to a bank.
You'll be begging me for this money next week.
If you sign today I'll totally drop the 15% closing costs.
My Mother said you better sign this contract and send it back or else.
What do you mean 76% interest is expensive, are you crazy, this is cheap (1.38-- 38% interest in six months x two =76% yearly interest PLUS closing costs)
I don't care, go to a bank.
You'll be begging me for this money next week.
If you sign today I'll totally drop the 15% closing costs.
My Mother said you better sign this contract and send it back or else.
What do you mean 76% interest is expensive, are you crazy, this is cheap (1.38-- 38% interest in six months x two =76% yearly interest PLUS closing costs)
NY Cash Advance Companies Exploding
It seems everyday another new cash advacne company is calling me asking to work for them. They all promise 3,4,5,6 or more percent payout AND marketing. Obviously how can a company pay those kind of commissions and provide the marketing and support needed to retain customers.
It seems anyone with some leftover cash from their 90s stockbroker days thinks they can start a cash advance company. And actually they can. Just get an autodialer, a room with 100% commission salespeople (mostly out of work ex-mortgage brokers fired in the sub-prime meltdown hired off craigslist) and you can fill a pipeline in a matter of weeks. I know I did it.
Now what. How to get the deals funded and wired. And the follow up who does that? Who knows?
It seems anyone with some leftover cash from their 90s stockbroker days thinks they can start a cash advance company. And actually they can. Just get an autodialer, a room with 100% commission salespeople (mostly out of work ex-mortgage brokers fired in the sub-prime meltdown hired off craigslist) and you can fill a pipeline in a matter of weeks. I know I did it.
Now what. How to get the deals funded and wired. And the follow up who does that? Who knows?
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