Making Sure Our Educators are Educated
Posted on November 15, 2010 at 8:58 PM
No, I am not referring to public school teachers. Many representatives in the Merchant Cash Advance(MCA) industry often times encounter a daunting challenge, taking on a potential client’s preconceived notions that a MCA is bad.
A MCA might be bad if the financial product simply does not suit the customer’s needs. In that case it’s a bad fit, but it is not a reflection of the product itself. The issue is when a business is unwilling to consider if the product could be a fit for them at all.
Over the past few years, any small business looking for capital has at one point spoken with a reseller of MCAs. A large factor in those that applied for funding and those that didn’t is a result of the sales person they spoke to. Given that this industry was largely unheard of until 2008, resellers were out there making a first impression on behalf of us all. In a sense, they were not only selling the product but also educating small business owners about what MCAs were all about.
That could very well mean that a small business owner’s 3 minute conversation with a 1st day cold caller back in 2007 is the sole basis for which their negative perception of MCAs was formed. The industry was so young that many resellers themselves could barely grasp the concept of the product they were promoting.
In 2010 there is no excuse. One salesman by the name of Tim, reported to us that a potential auto repair shop client he was courting hung up on him mid-sentence when he had suggested “Merchant Cash Adv..” The client called back and apologized for the hang up but stated he had no interest in a MCA. Which lead to inevitable question…Why? The business owner explained that he had been approached by another salesman two days before and was made aware of the fact that “MCAs are for restaurants with bad credit that use credit card machines.”
This was a very big problem indeed given that he owned an auto repair business, had a 720 FICO score, and used POS software on his computer with a MagTek swiping unit attached. In one sentence, the previous salesman had unintentionally inflicted serious damage. Tim had a lot of work to do.
Although restricted by some funding sources, Auto Repair is the 2nd most funded business model. Credit requirements are continuously on the rise and a few funders offer significantly discounted pricing for FICOs above 700. If the salesman can’t see beyond terminal based credit card transactions, well then we have a lot more educating to do.
It’s easy for a MCA reseller to hire ten mortgage brokers and instruct them to call restaurants accepting credit cards, that have been declined for a business loan. They may have success and yet they leave a mess of chaos and confusion in their wake. Any business that isn’t interested, doesn’t need capital now, or doesn’t qualify at this time, may find themselves in a different position later on. If we don’t generate the sale today, but educate the masses of business owners on the way, we will find ourselves with more clients in the future.
All the mailers, door to door appointments, leads, cold calls, and advertising become less effective when the potential client base has been inundated with incorrect information and stereotypes. If we truly want to grow the industry and provide capital to the small businesses that need it, we need the front lines to be knowledgeable. Nothing is worse than a clothing store owner holding your brochure in their hand and never making that phone call because of a misconception about how this product works.
Explain it properly and everybody wins. 😀
-The Merchant Cash Advance Resource
www.merchantprocessingresource.comLast modified: July 24, 2013
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.