Leads vs. Data: Do You Know What You’re Buying?

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One important aspect of being a broker is your ability to generate qualified leads. At the core of a broker’s business, he/she is really just a lead generator for their network of funders, functioning as a way to improve their funder’s profitability through the acquisition of new clientele.

While I once questioned if brokers truly knew what they were selling when it came to the merchant cash advance product, my next question is in relation to the purchase of what vendors refer to as “Leads.” I want to know, do you (as a broker) know what you’re buying?

While it’s apparent that you can produce qualified leads internally, can you truly produce the same externally? With the various companies that pop up (seemingly overnight) without domain names, without professionally designed websites or with just the use of a Gmail/Yahoo Email Address, can you truly trust the claims that most of them make in terms of their ability to sell you qualified leads? Maybe so, maybe not, but I believe if we begin with the proper connotation of a “lead” vs. a “data record”, then it might help to truly determine what you’re purchasing from these external sources.


Data is business intelligence, which is either generic or specialized information on a business or a group of businesses that are within a sales professional’s generic target market. It would be up to the sales professional to take this data, turn it into a sales pipeline (leads), convert a percentage of those pipeline listings into application submissions, and a portion of those applications into funded deals. Data can come in the form of generic listings such as those from the Yellow Pages or specialized listings such as those from court houses, financing requests and UCC records.

So for example, a UCC record is a data record, not a lead. You would buy let’s say 2,000 UCC records and after running through them via a predictive dialer internally, you might filter off 130 interested prospects which creates your sales pipeline, which is what you would now call “leads.” Then through following up on those 130 interested prospects, you might convert let’s say 20 – 30 of them into application submissions and fund 6 – 9 of them.


A lead is an actual interested prospect in the services/products that you specifically have to offer. This means they have seen your specific ad or marketing piece, and have specifically expressed interest in what you have to offer. These can only be generated in-house through:

  • Running through Data Records as explained above.
  • Using other forms of direct marketing such as mailers, email marketing and through directly contracted referral sources who resell your product/company.
  • Using indirect marketing options such as banner ads, radio ads, TV ads, print ads, billboard ads, SEO related concepts, and Pay-Per-Click, where the prospect will see or hear the ad and respond to you directly through filling out a form, giving you a call, shooting you an email, etc.

I firmly do not believe you can purchase Leads externally, I believe they can only be generated in-house using direct or in-direct marketing procedures listed above.


So when a company comes to you selling “leads,” you should ask them are they selling “leads” or are they selling “data” records? Because they can only be selling YOU leads if they have specifically marketed your specific company and products to said generic target market, and generated interested parties to your specific company and products.

So what about companies that generate what they deem to be “leads” for the “service” that you offer in a generic fashion? For example, people that sell insurance would see people selling insurance Leads, people that sell equipment leasing will see people selling equipment leasing leads, and of course people that sell merchant cash advance will see people selling merchant cash advance leads.

I am still of the belief that these are not leads, but data records, it’s just a different type of data record similar to that of a UCC. A UCC is a more specialized type of data record that tells you more in-depth information on the current situation of the prospect in particular, such as the fact that they took out a cash advance on XYZ date with XYZ funder. This is more specialization than let’s just say a basic Yellow Pages listing, which just has the company’s name, address and telephone number. But both the UCC record and the Yellow Pages listing are still data records.

The “product specific leads” that are sold are usually just a listing of individuals who filled out various online forms requesting some type of particular product, service or financing vehicle. In my opinion, these are not leads, but still data records that will list only the generic information on the company and the date/time they requested more information “generically” on the product or service in particular.

You (as the broker) still have to call these leads and sell them on your company, your product, your pricing, your platform, etc. This means similar to UCC records, if you get 2,000 of these records, you might only convert 130 to interested prospects, which would now be the official “leads.” Then of course from there through following up on those 130 interested prospects, you might convert let’s say 20 – 30 of them into application submissions and fund 6 – 9 of them.


This article might offend some individuals who are in the “Lead Generation” business, but I explicitly want to state that my intention is not to cause distress. I firmly believe that the vast majority of the time, when one is purchasing “leads” from an external source, they are indeed only purchasing data records. As a result, such disclosure should be made and such pricing structures modified.

The purpose of this article is so that brokers can know what they are purchasing ahead of time, to make sure that the price they’re paying fits their ROI analysis.

The last thing any vendor would want (in my opinion) is to have a bunch of angry online reviews from brokers who paid $3.00 a piece for your 2,000 “leads,” that only converted to 130 truly interested parties, and then only produced 20 – 30 completed application submissions.

Last modified: November 6, 2023
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 Tucker@1stCapitalLoans.com or at 586-480-2140.

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