You cannot believe it. It just happened again. Your um-teenth deal in a row has died. It was gonna be a juicy commission too. It was going pay for that vacation you had planned. Not anymore. Nope. This deal is dead. It’s not coming back. Underwriting and Management have decided they now hate the file and there is no way you can get this decline overturned or funded somewhere else for that matter. This one would’ve put you over quota and now you aren’t even sure how you can to afford to take that extended weekend vacation you have planned. Meanwhile, the guy sitting two seats down from you just funded his third deal this week with what seems like relative ease. You can’t help but start counting up the commission dollars he stands to make for funding those deals. Jealousy starts to seep in… What the heck is he saying to these merchants? He’s not saying anything that much different from what you are saying, right?
What is happening?! It must be the leads. These leads are garbage. They are the same old leads that are being beat up by all the other ISO's and funding companies out there. Wait a second... if the leads are so bad, how is that other guy closing all those deals? He’s getting the leads from the same source as me. Maybe it’s not the leads? I know. It’s the underwriters! Just nitpicking at all these details that don’t even matter! They’re the reason I’ve been losing all these deals! Wait... that guy who is funding all those deals, he is working with those same Underwriters and funding companies that I am working with and he is funding deals. Maybe it’s not the Underwriters. Hmmm, I know! I have the worst luck in the world. I’m getting sh*t-on! Yes, that is exactly what is happening, I am getting sh*t-on, plain and simple. Or... Maybe that guy who is closing all those deals is doing some things different than you. Maybe he is doing something else on top of just pounding the phones hard and having a smooth delivery...
Here are five things the top MCA sales reps are doing to fund deal after deal:
They understand the merchants goals and how exactly they plan to use the capital
We’re in sales. We’ve got a job to do. We need to hit quotas, make those commission dollars and put food on the table. But sometimes we forget that the merchant does not care about our goals. He doesn’t give a hoot about your quota. He does not care if you had a bad month last month or the last three months. He has his own agenda, timeline and goals. He has a business to run and food to put on his own table. When we are focused on just hitting numbers, we sometimes lose sight of what the merchants goals are and we get all wrapped up in our own situation. This is a losing formula. However how hard it might be, we need to separate ourselves from our own situation and transform into the merchant's newly acquired business partner. Think of it like you are investing your own money in his business and you need to find out where he plans on taking his business or how he plans to improve it. The merchant has brought you on as a partner for your financial expertise. It’s your job to help him acquire the capital that is right for his business and situation. But before you can do that, you need to fully understand what his goals are for the business. And also when he wants to make these changes, upgrades or expand the business. “When exactly do you want to have these funds in your bank account? Is it by this quarter, by end of the month, by the end of the week or ASAFP?."
The faster you can find out exactly what his goals and timeline are, the quicker you can either put his file on the back burner, kill it completely or move full steam ahead towards funding. This way you are not wasting time on someone who is 1.) not yet ready for capital for another couple of weeks or months or 2.) not really interested in securing capital at all or maybe just wondering how much he will qualify for.
They understand the merchants file/submission
Okay let's say you’ve found a merchant who is looking for capital and wants the funds in his bank account before the end of the week. He is ready for the funds. He's looking to secure capital before the weekend, so he can purchase a new truck at Saturday’s auction where he purchased his last truck and where all the best deals are. He tells you he needs $100,000 minimum for the type of truck he wants. You ask how much he deposits in his bank account each month. He tells you at least $100,000 every month. Perfect. You tell him you should be able to get him $100k no problem. He sends overs his signed application and bank statements and you open up the pdf bank statements, scroll down to the account summary section on the bank statements for each month and sure enough, $100k+ in deposits in each of the last 3 months of bank statements. Beautiful. So you immediately forward to your A-Paper funding company right away and then they say, "Thanks for sending over, we’ll get to this file as soon as we can".
The following morning you notice a familiar email from the funding company you sent the deal to for a quote. That is an approval email! You skip the other emails in your inbox and go right to that one. You open up the email and are excited to see how big the offer is and what kind of commissions you have the opportunity to make. The excitement is short lived however. The offer is low. Really low. It’s nowhere near $100,000. They are maxing out at $25,000. This has got to be a mistake. Your merchant is depositing at least $100,000 in his bank every month! They must have mixed up your merchant's quote with someone else's or maybe they forgot to add a zero. So you reach out to your contact at the funding company looking to find out who screwed up and to get your real quote. While on the phone with your ISO relations contact at the funding company, they pull up your merchants bank statements to see what is going on. They look at the deposit total and sure enough each month is $100k plus. Then they dig a little deeper and take a look at the line items for the deposits...
“Well here’s your problem right here”
After taking a look at what actually makes up those deposits it’s determined his revenue-based deposits are much less. In month one, he received a $50,000 loan that was deposited in his bank account -which inflated his deposit count. So that is not counted as revenue and also made the risk higher because it is a second position. And in months two and three, the majority of each month's deposits are transfers from some other bank account owned by the merchant. So you ask if you can get the offer increased. They bump it up by $2k. The max offer is now at $27k. Still nowhere near that $100k mark. There is no way they are going to quadruple their current offer. Now you have to go back to your merchant and explain to them that you were unable to get any $100,000 offers for them. His response to you is, “I can't buy a truck for $27,000. That doesn’t help me at all!” Now his trust in you is shaken and he thinks you are just wasting his time. So, now he decides to start looking elsewhere for capital. Only if you would’ve taken a moment to review the statements before sending to the funding company, you might have seen his real deposits were much less and could have contacted the merchant immediately, talked it through with him and could have possibly avoided this situation.
They understand the funding companies underwriting guidelines
Okay, let’s change up this scenario just a bit. Let’s say this merchant's actual verified revenue-based deposits were really over $100k in each month. That same funding company has made an offer of $110,000. Your merchant wants max offer and max term. You’ve priced the deal with plenty of points built-in. He has verbally accepted and is ready to move forward. You are pumped and ready to get this baby funded! Now it is you and your merchant both on the same team and you two are going up against underwriting. The Underwriters are all that stand between you funding a deal, having a big pay day and you getting a decline notice and making $0.
It’s Wednesday morning and you’ve just pitched your offer and are waiting on the contracts from the funding company to forward to your merchant. That auction your merchant is attending, where all the best deals are, is this Saturday. The merchant has informed you multiple times he needs the funds in his bank account no later than Friday to pay for the truck at auction. You let him know if he needs the funds in his account by Friday you need those signed contracts back as soon as possible to make it happen. That morning you get the contracts from the funding company, you immediately forward to your merchant, along with the list of stipulations that he needs to provide along with the signed contracts. The merchant tells you that he will get everything to you tonight. Thursday morning you open up your email and sure enough, the merchant sent you the signed contract and everything included on the list of stipulations... drivers license, voided check, bank login, etc. However, you notice that he has one question on one of the items on the list of stipulations. “What is a Site Inspection?”... Site inspection! Since when does this funding company want to do site inspections?!
You immediately contact the funding company and find out if they really need to do a site inspection or, even better yet, you are hoping this was just a mistake. Your contact at the funding company informs you that on all deals over $100,000 they must perform a site inspection and there is no wiggle room on this. A site inspection must be done this deal and the merchant won’t take less money. So you ask “When can we schedule the site inspection?”. Your contact tells you, “The absolute earliest the site inspector can get out there is tomorrow afternoon. They will send the results of the site inspection to the funding company by end of day.” Now you realize that there is no way you are going to make their funding deadline for wires on Friday. You are going to miss the funding deadline for that week. You won’t be able to get your merchant his funds on Friday. Now it looks like the earliest you are going to get him funded by would be Monday. Now you have to go back to your merchant and explain to him why he won’t have the funds in his bank account until next week. The call is not pleasant. He’s mad as hell. He was up late last night reviewing and signing the contracts and gathering all the stipulations for you and now you are telling him you can’t get him his funds until next week. That’s not going to work for him. He needed them by no later than Friday for that auction on Saturday. So the merchant declines to move forward with your offer and you are likely never going to get his business.
Only if you would’ve known that the funding company does site inspections on all deals over $100k, you could have pressed him to get those signed contracts to you Wednesday morning. If that was done, you could’ve got the site inspection scheduled for Thursday. Results of the site get sent to the Underwriter by Thursday evening and they could’ve completed the Underwrite and funded him Friday with a same-day wire. Now you have no fundings, no commissions and just killed your relationship with that merchant. All funding companies provide each ISO who signs up with them their underwriting guidelines. Get to know them inside and out. This will help you win deals.
They properly set the merchants expectations
Now all of these situations can be avoided. The top closers would have been able to avoid all of these situations. So, what can you do to avoid these situations? First, when qualifying a merchant, the top closers would have digged deep on the merchants goals and use of funds. “What exactly are you using the capital for? How much does what you are trying to accomplish cost? What is the price for each item? What is the absolute minimum you can work with?” By asking as many questions early on and figuring out exactly what the merchants situation and intent is, you will be able to more accurately explain exactly to them what you might be able to offer them. So, instead of building up their expectations up front and then later disappointing, try setting the merchants expectations (as best and as accurately as possible) up front, to avoid any unpleasant surprises later on.
Second, when the merchant sent you his bank statements and you immediately forwarded to the funding company you could have saved yourself a bunch of time. How? Well, instead of just immediately forwarding your merchants submission docs to the funding company, you could have took 15 minutes to review the file, contact the merchant, ask about the loan he took in month one, and find out why most of his deposits were transfers from another account. Maybe could’ve then provided you with the statements from his other account right away you you could have confirmed that those deposits are indeed revenue-based deposits. Maybe you would’ve got him his $100k offer that morning, instead of upsetting the merchant by telling him right off the bat you can get him $100k offer and then coming up way short.
Third, in the situation where the the required site inspection delayed the funding until the following week -this could also have easily been avoided. What would a top closer have done in that situation? Well, first they would have been fully aware of the funding companies underwriting guidelines. They would have known that a site inspection would have been required to fund and would have informed the merchant that a site inspection is required and exactly what it entails: "Mr. Merchant, a site inspection takes a day to schedule and for the inspector to get out to your location, someone will come out to your address and then they will do this when they get there, and then another day to complete the remaining underwriting process before they can actually wire the funds". So, instead of him getting you the signed contracts late Wednesday night, you let him know that if he needs the funds in his account by Friday, that he needs to drop what he is doing, sign the contracts, get them sent back to you within the next hour, so the funding company can get the site inspection scheduled for that Thursday instead of on Friday. Then you would have been able to fund your merchant that Friday for his auction and you would have got paid your commissions soon after. Everybody is happy. This is properly setting the merchants expectations. Setting expectations has to be done from as early on as possible. It can’t be done after you get the quote or after the merchant has signed the contracts. The expectations of what the merchant can anticipate to have to do, how much they are going to actually receive in their bank account and precisely when they are going to have the funds available for use, all need to be communicated with the merchant as soon as you know. Otherwise, you risk losing deals.
They don't waste time
The last thing that the top closers do to win more deals is arguably the most important. It is especially true for this industry and is a very simple concept which revolves around each of the previous things covered here. They don’t waste time. Not wasting time will result in more funded deals, hands down. If you are selling MCA’s or daily pay loans, and there is one thing you should do, it should be to not waste any time. What do I mean by that? Well when you deal with non-exclusive leads and a very short turnaround time to actually fund a deal, you need to be on top of everything and always be moving the deal/merchant towards funding. That is why it is so important to find out how motivated your merchant is during the qualifying stage. If he needs the capital now. Move him towards funding. If not, go to the next one. Let's say you get a brand new lead, but you decide to contact him maybe after lunch or after you have had your morning coffee. You have likely lost the deal already. If you wait to call a fresh lead, you will be probably the fifth or sixth sales rep to call that same lead and by that time the merchant is already sick of talking to sales reps about working capital. It takes a lot more convincing at this point for any merchant to work with you instead of the first two or three reps he has already talked with. But if you were the first or second person to speak with him, you have a lot better shot at commanding that merchants attention.
This also applies to that scenario where the site inspection delayed the funding. The difference between funding a deal or not, was the merchant getting the contracts to you that night as opposed to that morning. If he would have returned them immediately, the deal would have been funded before the weekend. The simple fact that he waited half a day until to send you the signed contract was the difference between you making a juicy commission and you making diddly squat.
Being a top closer in this industry is not easy. It takes time, a certain degree of patience and, for most, lots of lost deals before you actually figure it out. However, on the other side of that coin -it’s not rocket science either. Losing a dozen deals in a row is not a prerequisite. It does not need to be this way. You don’t have to lose that many deals before you figure things out. If you can just...
- Take time to really qualify merchant during initial stages
- Take time to analyze and fully understand the merchants submission before sending out
- Take time to understand the funding companies current underwriting guidelines
- Take time to properly set the merchants expectations early on by using what you have gathered from the merchants submission doc's and what you know about the funding company's current underwriting guidelines and lastly
- Waste no time when first calling new leads, gettting submission docs from your merchant, securing approvals and/or then getting signed contracts/stipulations in
...you will likely be the one in the office who is funding deal after deal, while everyone else is trying to find out just what the heck you are saying to these merchants.