Mr. Merchant: Help ME, Help YOU

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frustrating merchantsAs we close the 3rd Quarter in the Year Of The Broker, I thought that it might be imperative to blow off some steam. Industry forums, commentators and media reporters often rant on Brokers and Lenders by disclosing the inefficiencies of such parties. But I have yet to see (or hear) of anyone making a particular “rant” on the most crucial element in our industry, The Merchant. So if you would allow me the liberty to do so, I would like to take a couple of moments to provide these rants as many of you might have the same “pet peeves” with the merchants you are currently assisting (or trying to assist).

Help ME, Help YOU
Mr. Merchant please Help ME, Help YOU. We all know the situation of why you returned my call, email, etc., you are in need of some working capital for your business because conventional sources are either not lending to you altogether, or they can’t work within the time frame that you need the capital in.

But I can’t help YOU, unless you first help ME in the process by being as efficient as you can in terms of your level of organization. You operate a $350k – upwards to $10 million business, why is it that you are so unorganized to the point where you can’t seemingly tell your head from your rear? Below are just “some” of things that Mr. Merchant, YOU need to work on.

Not Meeting Basic (Elementary) Deadlines
We would be at the very end of the closing process only for you to send over an expired driver’s license because you never updated it, or your SOS filing is inactive because you didn’t pay the $50 annual filing fee, or you are late filing your taxes and didn’t put in an extension. These are basic (elementary) deadlines Mr. Merchant, how is it that you are not staying on top of them?

Bank Statements Are Out Of Order
We need your bank statements to analyze your sales, cashflow, balances, etc. to determine approval terms/conditions. Why is it that your fax has pages that are totally out of order, pages missing, etc.? Why is it that many times you don’t even know where your bank statements are and we have to wait 3 or 5 days for you to “find” them? We are in the Year of 2015 Mr. Merchant, have ever heard of a tool called “Online Banking”? You can easily log in and forward your statements over in PDF format by email within 5 minutes.

Can’t Find Financials
So Mr. Merchant, you are requesting $200,000 plus from my platform and the Underwriter needs to take a look at last year’s Tax Return, Prior Year Financials and YTD Financials. But similar to your Bank Statements, you have no clue where these documents are. Mr. Merchant, how can you run a $5 million plus business, but not know where your Company’s Financials are?

frustrating merchantsBad Credit
The average FICO score in the country is about 693, yet Mr. Merchant, your FICO score is under 500, or 520, or 575. As an entrepreneur, you know that you are supposed to keep your credit clean as much as possible, yet you routinely tell me that you haven’t pulled your credit in a while and you don’t know what’s on your report. There are free sources like Credit Karma, Credit Sesame and your Credit Card Issuer to get your credit score/reporting ranges for free, yet you don’t use them?

Running The Business On Overdraft Protection
Mr. Merchant, my financing is based on a daily or weekly fixed payment, how can I approve you when you have no money in your business bank account and you run the business on overdraft protection?

Not Disclosing Liens, Bankruptcies, Or Landlord/Mortgage Issues
During my pre-qualification, I asked you if you had any prior liens or bankruptcies, I also asked if you were behind on your landlord or mortgage payments. You flat out said no. Did you not think we were going to find late in the 11TH Hour of the closing process, that you have a $150,000 tax lien without a payment plan on it? Which means we just did all of this work, for nothing?

Excessive Cash Advance Stacking
Mr. Merchant, tell me how does this make sense? Why would you take out excessive advances on top of one another without calculating the fact that you would be paying 25% to sometimes 40% of your gross monthly revenue in cash advance payments? Then after doing so, you come to me complaining about why no one will help you get from under these “evil” Cash Advance companies?

Sending Fake Statements and Financials
And this is the ultimate pet peeve! So Mr. Merchant, you are in such desperate need of a high priced Cash Advance, that you are willing to go to prison for it by sending over fake bank statements and financials? Why on Earth would you risk your freedom in such a manner?

Final Word
As Brokers and Lenders, we are always hammered in the media about our inefficiencies, but nobody says anything about the flat out (sorry to say) stupid behavior of merchants that we serve.

Mr. Merchant, please help ME, help YOU, or should I say help US as an industry help YOU, by just doing the basic (elementary) of things that will assist us in securing the best alternative financing deals in the marketplace, all designed to help grow, develop and sustain your business.

Last modified: September 25, 2015
John TuckerJohn Tucker is Managing Member of 1st Capital Loans LLC, as well as an M.B.A. graduate and holder of three bachelor's degrees in Accounting, Business Management and Journalism. Tucker has nearly 9 years of professional experience in Commercial Finance and B2B Sales. Connect with Tucker on LinkedIn by clicking (here), or contact Tucker at or at 586-480-2140.

Category: Business Lending, merchant cash advance

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