The Stigma of Merchant Cash Advance?
Bankcard Funding, a Long Island based Merchant Cash Advance (MCA) provider, recently blogged about the “stigma” of Merchant Cash Advance. While we don’t deny that there is one, we don’t agree with their basis for it.
To quote them:
“Many people do not believe that a merchant cash advance is a legitimate type of financing. This is because many merchant cash advance companies take advantage of naïve clients who are uneducated in the process, take them for a ride, and then focus on the next“sucker.” NOTE: As of 9/13, we noticed that they have updated their article and the above quote no longer appears.
This is a weak argument, especially since it inflames the target market’s concerns. If you market your company by claiming everyone in the industry is a scam artist except yourself, you’re not going to reassure your prospects. But Bankcard Funding is not alone in their assessment so maybe they’re on to something. We’ve heard similar rhetoric in private groups on LinkedIn where seasoned professionals vented their frustrations. Some of the anonymous comments include:
It seems too many industry professionals are casting the blame on malevolent third parties. If the competition was as evil as you think, then your work should be cut out for you. Business owners are intelligent people. That’s why they’ve managed to successfully work for themselves. If given the choice between a malicious salesman and an honest one or a good deal and a bad deal, they’re inclined to go with the honest guy with the good deal.
The point being… If you feel that you are losing prospects because the competition is muddying up the industry’s reputation, you simply need to sell better. If the few evildoers (and there’s a bunch in every industry) are defining the industry itself, then it’s time to rethink your marketing strategy. The companies with the highest rates and the nonsensical fees shouldn’t be beating you. If anything, they should be making it easier for you to grow.
So the good guys have a marketing problem and it’s about time we addressed that…again. Reread The Colossal Marketing Failure of the Merchant Cash Advance Industry in which we highlight some of the problems in advertising.
Some people have asked us about the purpose of the erotic photos we used in it. Why did you notice them? Did they stand out? Did you think about what the point of it was? If it got you wondering at all, then we did our job. Junk mail and cold calls don’t get your prospects to think about anything.
If we are to redefine the image of the industry, then the vehicle in which the message is delivered needs to change. Big financial firms like Bank of America have so many businesses applying for loans, that they can barely keep up with the demand. That’s the way it should be for MCA providers, especially given the state of the economy.
The only people claiming there’s a stigma are the ones selling the product. Guess what? That’s not a winning strategy…Last modified: September 13, 2011
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.