I received a call from an old business associate today asking me to invest in his ISO office. He suggested I assist with the marketing as well as funder relationships. His job would be to hire and train the brokers and handle the general expenses .I thanked him for thinking of me , but declined his offer.As I had shared before I owned a small ISO shop in 2013 but left shortly after to purchase a business that was offered to me in the wellness industry. After exiting that business I founded LMG in 2015. After we finished our call, I thought about what someone needs if they are just getting into the MCA business which has so many new people. So I decided to put together a small checklist for new people entering the space.
Funding Network
If you do not have lenders who trust you enough to give you competitive offers you will likely not close many deals. You should limit the amount of funders you attempt to work with. Look to have 2-3 A paper lenders like Ondeck and Mulligan. Then some B-C lenders like Argent and then there is always a host of D-F lenders who will handle your difficult deals . 2-3 of each is fine. When you shotgun your deals to a million funders you risk not having volume with lenders which will lead to better deals and having your deals backdoored or stolen.
Marketing
If you can’t get merchants to submit with you the quality of your lenders will not matter. The ISO teams that I am working with that are funding several million dollars per month are using diverse marketing strategies. These are teams that are calling, texting and emailing merchants. In addition they are buying real time leads , utilizing offshore call centers to drive inbound calls. It would be impossible to compete with only a cold calling strategy.
Technology
The days of just cold calling are over. Teams are emailing through mediums such as GMAS and Hypermail. Texting is always a challenge to deliver clean active data .LMG is able to handle texting campaigns through our partner platforms. If you are not emailing and texting you are almost wasting your time.
Training
Business lending is incredibly competitive , and for this reason you must train and conduct ongoing training with your team as they make presentations to merchants. Training and compliance meetings for your te,marketers should be done weekly.
It’s a great time to be in small business lending but its not as easy as grabbing a cell phone, a laptop and starting cold calling. The industry has evolved into a technology based business and if you are not evolving you will be left behind.
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