Yes another article regarding selling a merchant cash advance appeared in the recent issue of The Green Sheet. Mike Evans, a Sales Manager from 2nd Source Funding in New York, wrote an article entitled Use rapport to score with cash advance. (Editor's note: Second Source Funding is a broker / sales agent for several merchant cash advance companies. I believe they also offer merchant fundings / business cash advances under the name Tribul Cash and BPS (Business Payment Systems) also based out of New York City.)
Mike points out several things that I've mentioned previously back in September, namely how former mortgage brokers are getting into the merchant cash advance business (see my previous blog entry - Invasion of the Subprime Mortgage Brokers).
I agree with what Michael is saying for the most part about how merchants are being inundated with merchant cash advance offers. The one interesting item he indicated is the average merchant cash advance factor rate is 1.38. My personal opinion, any merchant that is paying 1.38 for a cash advance can find the money less expensive for around 1.35 (which can add up to signficant savings to the merchant as the advance gets larger).
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4 comments:
The article in the green sheets "Use rapport to score with cash advance" was the most out of date useless article about the Merchant Cash Advance industry written. Everything was already old facts known for months! Very old news... It would be like writing an article about the AdvanceMe patent, who cares! it's old and over-exposed! I understand the need for contributing to magazine to get your name out there and educate everyone about the space but we should be smart about it. We need to present our industry in a positive light, scare away the bad guys and fly by night outfits who are looking to jump in. A good article would be to explain how competition is good for the industry, explain how we can benefit from each other's learnings and establish a set of standards to follow to be respected and accepted before playing. Simple standards that can help everyone:
.make a profit
.help the merchants
.don't hurt them
.weed out the bad players as well as the bad merchants. A coalition of sorts...Self regulation maybe Just a thought
I think just like an ISO must be registered to sell Visa/MC, the ISO or Agent must be registered to resell MCA's for one of the companies. If bad practices arises, you get fined or your ability to sell it gets cutoff. Way too many yahoos selling this product now and doing very bad practices.
I work at 2nd Source and knew Mike Evans well. He wrote that article after working here a week, without any authorization from management. He essentially wrote everything he knew about the industry and then published it in the Green Sheet. It says alot for our industry that the Green Sheet would even print that garbage.
I agree that competition, which fuels all business advances, is nothing but beneficial-to the merchant in lower rates, and to the ISO with more volume.
Self regulation is also essential in this industry, which has already received some bad press from a few bad apples. Better we do it to ourselves before "A Higher Authority" does it for us!
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