A Broker Diversifies With Suite of Value-Adds
By: Sean Murray
Like many broker shops these days, Connecticut-based Sharpe Capital is offering more than just a revenue-based financing product. Owned by CEO Brendan Lynch who has been funding deals and boarding credit card processing accounts for more than 15 years, the company is now looking much deeper into business owners' needs through a whole new set of diagnostic questions like whether or not they have a written will, access to a lawyer, possession of a firearm, or ownership in real estate.
The latter on that list, real estate, is becoming more familiar in the small business finance community. Sharpe Capital, for example, added mortgages to its product set about 18 months ago.
"When we talk to anybody on the phone and they start asking questions, 'oh, what kind of programs do you have? What are the rates?' now we'll always say, 'well, the cheapest way and the most affordable way to get money is, even though rates are higher on mortgages and that stuff right now than they were in the past few years, it's still the cheapest way.'" Lynch said. "And then what we'll try to do is explain that it's going to take a while. 'How much do you need to get through the next two months while we work this up for you,' right? Try to get the long term funding going for them and the short term solution all in one."
More recently, however, the company has added a bundle of services that include things like identity theft protection, legal consultations, will writing, and more. In one example, Lynch said that a merchant disclosed that an IRS audit had slowed down their ability to continue the application process with them and he realized they actually had a solution for that.
"One of the things [this partnered service] covers here is audit services," Lynch said. "They'll give you up to 25 hours and walk you through an audit from the IRS. So it was easy. I was like, 'hey, yeah, let me help you out right now. We signed him up right away.'"
Lynch says that for now, since it's all still new for them, these value-adds are typically being proposed after the customer onboards for funding but that he's open to switching it around.
"We're definitely trying to figure out a way to approach it as the frontend as well," he said. "The way these leads are being bought and sold so fast and rapidly, you're fighting with 50-60 different brokers on every deal, you know? ... So, we're really just trying to find something that separates us."
Lynch argued that in a market where a lot of brokers are essentially offering the same thing, just being personally remembered later on when it comes time for funding again can make all the difference and that being the guy who helped them draft a will for sixty bucks will probably stay fresh in their mind.
"It definitely stands out," Lynch said. "It definitely opens up conversations where you're going to get a little more personal with them and build a closer relationship because you're going to start asking, 'Are you married?' Yeah, I know maybe that's part of people's sales pitch, but a lot of times we're just so focused on getting you an offer fast and getting you funded fast, you kind of don't have time to get into all that, so that afterwards getting to really build the relationship seems to really be working."
By: Sean Murray
Like many broker shops these days, Connecticut-based Sharpe Capital is offering more than just a revenue-based financing product. Owned by CEO Brendan Lynch who has been funding deals and boarding credit card processing accounts for more than 15 years, the company is now looking much deeper into business owners' needs through a whole new set of diagnostic questions like whether or not they have a written will, access to a lawyer, possession of a firearm, or ownership in real estate.
The latter on that list, real estate, is becoming more familiar in the small business finance community. Sharpe Capital, for example, added mortgages to its product set about 18 months ago.
"When we talk to anybody on the phone and they start asking questions, 'oh, what kind of programs do you have? What are the rates?' now we'll always say, 'well, the cheapest way and the most affordable way to get money is, even though rates are higher on mortgages and that stuff right now than they were in the past few years, it's still the cheapest way.'" Lynch said. "And then what we'll try to do is explain that it's going to take a while. 'How much do you need to get through the next two months while we work this up for you,' right? Try to get the long term funding going for them and the short term solution all in one."
More recently, however, the company has added a bundle of services that include things like identity theft protection, legal consultations, will writing, and more. In one example, Lynch said that a merchant disclosed that an IRS audit had slowed down their ability to continue the application process with them and he realized they actually had a solution for that.
"One of the things [this partnered service] covers here is audit services," Lynch said. "They'll give you up to 25 hours and walk you through an audit from the IRS. So it was easy. I was like, 'hey, yeah, let me help you out right now. We signed him up right away.'"
Lynch says that for now, since it's all still new for them, these value-adds are typically being proposed after the customer onboards for funding but that he's open to switching it around.
"We're definitely trying to figure out a way to approach it as the frontend as well," he said. "The way these leads are being bought and sold so fast and rapidly, you're fighting with 50-60 different brokers on every deal, you know? ... So, we're really just trying to find something that separates us."
Lynch argued that in a market where a lot of brokers are essentially offering the same thing, just being personally remembered later on when it comes time for funding again can make all the difference and that being the guy who helped them draft a will for sixty bucks will probably stay fresh in their mind.
"It definitely stands out," Lynch said. "It definitely opens up conversations where you're going to get a little more personal with them and build a closer relationship because you're going to start asking, 'Are you married?' Yeah, I know maybe that's part of people's sales pitch, but a lot of times we're just so focused on getting you an offer fast and getting you funded fast, you kind of don't have time to get into all that, so that afterwards getting to really build the relationship seems to really be working."
WTF Merchant Services, a real name and double entendre that makes it instantly unforgettable to any client that hears it, has an unusual story. Its CEO Will Failla is a veteran professional poker player that has won more than $6.6 million from tournaments over the course of his career 
The evolution from credit card processing to funding is straight out of the old MCA playbook of the mid-2000s, but with a notable difference here, they haven't abandoned their roots. Unlike many modern funding ISOs who focus entirely on commissions paid out on funding, WTF is requiring their funding clients to switch their merchant accounts to them, assuming it's a business that processes cards. And if they can do the funding deal on a split of the processing, all the better.
"When you do the split, it's so much easier because you take, let's say 15 or 20% or whatever the merchant can handle at the time," Failla said. "It's just so much better of a direction to get paid because it doesn't hit their bank, it doesn't hurt them as much. When they see it coming out daily like that, it's a little different. When it comes out of the credit cards it's just early and it helps a lot. Mindset changes."
The company's traditional approach has already attracted the attention of some of their peers in the industry who like the idea of residual income but don't have the time or the patience to worry about merchant accouts.
"We have different MCA offices that we actually do this with already," Failla said. "We do all their credit card processing. We handle all the back-end. We handle all the front-end. All they do is give us the referral and they become what we call a referral partner, and they get paid every single month as long as we keep the account."
Will was sure to give credit to those that have helped shorten his learning curve along the way. He has since discovered that others in the poker scene are also in the same business as he and it's created a valuable community. WTF even has a poker table in its office as a sort of tribute to his background which he has not actually retired from. The Hendon Mob poker tracker states that Will recently placed 259th out of 10,112 players in the World Series of Poker in Las Vegas earlier this month. Meanwhile, the company name itself, a bold strategy, seems to be working out so far.
"If you look under our logo, it says our names right underneath it. William, Torre Failla, and listen there's going to be some pushback, but the amount of pushback we've had is so minimal that I think it's worth it, and we're going to stick with it as long as we can."
The SBFA is a non-profit advocacy organization dedicated to ensuring Main Street small businesses have access to the capital they need to grow and strengthen the economy. The SBFA’s mission is to educate policymakers and regulators about the technology-driven platforms emerging in the small business lending market and how their member companies bridge the small business capital gap using innovative financing solutions. Attendees of the conference will have the opportunity to support this initiative. 
“A successful broker is one that cultivates a relationship with a few lenders,” Coleman says. “A broker is more entrepreneurial [versus an in-house business development officer], has access to a number of different products, and they work with a core level of lenders or funders.”
