Advice to New Loan Brokers, ISOs, and FundersFebruary 24, 2015 | By: Sean Murray
Some words of wisdom to avoid having a bad experience in this industry:
1. If you can’t afford a lawyer, don’t be a funder. This is a litigious business and despite the myth that commercial financing is unregulated, there are plenty of ancillary laws to adhere to. States, FTC, OCC, IRS, etc.
2. Have a lawyer review your contracts (merchant agreements, ISO agreements, syndication agreements, etc.) If you can’t afford one or don’t want to take the time to do it, this business might not be for you.
3. Don’t send your deal to someone with a free email address (yahoo, gmail, hotmail, etc.).
4. Don’t send your deal to some random company just because they posted something on a forum, LinkedIn, or somewhere else. Check them out on Google, ask other forum members to vouch for them. Be extremely smart and overly diligent about it.
5. This is not a get rich quick business or industry. You can lose money funding and syndicating. You can technically also lose money brokering on commission clawbacks for deals that go bad right away.
6. Leads are expensive. Do not launch an ISO with only 2 grand in the bank.
7. Learn to generate your own leads and you will save yourself a lot of stress down the road.
8. A wise man once told me it is better to build a book of business and a long lasting passive income than to grind it out for a quick buck month after month. What’s your strategy?
9. You will lose deals, commissions, arguments, and occasionally your mind. Accept your losses when they happen and focus on the next deal.
10. Use appropriate language. A company that buys future revenues is not a lender and their financial transactions are not loans. Loans have noticeable things like interest rates and fixed terms. Make sure you know which one you’re talking about at any given time.Last modified: February 24, 2015
Sean Murray is the founder of deBanked, a 10-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.