Business Lending
The Broker: How Kunal Bhasin and His Team of Closers Make Deals in NYC
September 25, 2018
Kunal Bhasin, President, 1 West FinanceHis title:
President and owner of 1 West Finance in New York City. He founded it in May of 2017 in New York City. The company is a team of seven.
His background:
I was at World Business Lenders for 6 years. That’s where I learned this business and figured out how things worked. Then I left WBL and started 1 West Finance. At WBL, I worked in business development…And I think I was in a good space there to get experience to start my own shop.
His morning:
I get up around 7:00, usually will take my kids to school. I’ll have one cup of coffee, then pick up a cup of coffee for my train ride. On the train, I answer any overnight emails and follow up on whatever outstanding deals I’m working on. So usually I’ll be pinging funders to say “What’s going on with this? What’s going on with that? What’s next, what’s next, what’s next?” Then I buy another coffee when I get to Penn Station. I get to the office by 9:15 / 9:30.
Two times a week at a minimum, will bring in all the guys into the conference room. We will go through the pipeline…Who needs my help? Or who needs the sales manager’s help on a certain deal?…Things tend to move really well after that meeting.
Biggest challenge:
Because of the nature of our relationships, we get a lot of clients that haven’t done this type of financing before. And there’s always some level of sticker shock that the client experiences when you tell them, “I’m going to give you $100,000 and you’re going to pay me $130,000 or $135,000.” And they’re like “Oh my goodness. How is that possible?” “And by the way,” we say, “I’m going to take the payments daily or weekly.”
For clients who haven’t experienced this before, getting over this initial sticker shock is a challenge.
How do you respond to this shock?
I usually say “Hey, listen, we are not a bank.” I say “we fund clients everyday and clients fall into two buckets.” Either they have already gone to the banks and have been told “No.” Or, they can get the money from the bank but they just don’t have the time, because the bank is going to take 40 days or 60 days. And they need the money today or tomorrow.
So I say “If you think you have the 60 days and you can go to the bank, you should go to the bank. Don’t take this money. But if the bank says ‘No’ or you can’t wait, then I’m the next stop.”
Some of his favorite funders:
OnDeck – “by far, my favorite”
Green Peak Capital
InAdvance
Wall Funding
Average monthly volume funded:
$2.7 million.
Largest deal:
$1 million. We made $50,000. That was this year.
The TeamHis funding process:
A deal first goes to two processors [we have]. They make sure everything is there. No pages missing. They’ll make a decision – is this a good deal for OnDeck or is this a better deal for InAdvance or Fundworks? They’ll actually make the submission, update the CRM, and once the approvals come back, if it meets what the client needs, then the deal goes round robin around the sales team…We try to keep it very fair. And all my guys can close. They’ve all been in business for at least 5 years.
His weekends:
I’m a husband and the father of three and a half year-old identical twin boys. I work a lot and my kids are generally asleep before I get home. So weekends are dedicated to my wife and kids. I try to put the phone away and spend some quality time with them.
Will a Bank Fund Me in 24 Hours? (U.S. Bank Announces High-speed Digital-only Loan Process)
September 25, 2018
Yesterday, U.S. Bank announced that it has created a fully digital application process that allows a small business to borrow up to $250,000 in one day or less.
“We created this new digital experience to deliver on our commitment to continuously improve the way we serve our customers,” said Tim Welsh, U.S. Bank vice chairman of Consumer Banking Sales & Support. “This is the first of several exciting digital initiatives we’re pursuing that we believe will better serve the needs of small businesses and consumers.”
The new streamlined process allows single-owner business customers to access loan products that the bank already offers. The application can be completed on any device – mobile, tablet or computer – and if approved, it will allow the borrower to review their loan details and electronically sign their closing documents.
The Minneapolis-based bank operates in 25 states and, together with its parent company, U.S. Bancorp (NYSE: USB), has $461 billion in assets as of June 30, 2018.
Download Funding Circle’s 256 Page Prospectus
September 23, 2018Funding Circle, the international peer-to-peer small business lender whose US subsidiary funded approximately $500 million to small businesses last year, is planning to go public on the London Stock Exchange. While the UK is their primary market, they ranked just below Yellowstone Capital in US funding volume last year at a level that is about 1/4th the volume of OnDeck, a direct competitor.
72 percent of their business is generated through direct marketing, while the rest comes from indirect or “intermediary” channels, the company says.
CNBC reported that the company could be valued as high as $2.4 billion.
The Broker: How Daniel Dias Evolved and Found Success
September 19, 2018
Title: CEO of Small Business Lending Source. A one-man shop with one full-time assistant and another assistant in San Diego, California.
Years in the industry: 5
How he got into the industry:
I’ve always been an entrepreneur and I had a business that was going downhill. [In 2013,] I had a friend that was doing business loans and he told me that he had made $26,000 the month before, so I was like “What are you doing that’s bringing in so much money working for someone else?” And he said business loans. So I was like, “I need to check this out.” So I went and worked for the company he was working at for about 6 months. I learned how to sell the products and then went off and did my own thing. Now we do equipment leasing, business credit lines, SBA Express Loans and other products.
What were some of the challenges of starting your own business?
Initially, the biggest challenge was that I had only done merchant cash advance and not everyone is a good fit for merchant cash advance. So I had to learn about the other products, [which] is one thing that has helped me grow the business. Every year, I’ve seen about a 30 to 40% increase in revenue.
Also, marketing has changed a lot. I was kind of old school. I’d pick up the phone, start dialing, do direct mail. [But] since I’ve been in this business, I’ve learned a lot about internet marketing. I do a lot of marketing through Linkedin and Facebook, a lot of retargeting…I taught myself everything I needed to know about internet marketing.
His daily routine:
6/6:30 a.m. – I wake up. I make myself breakfast along with my daughter and get her ready for her daycare.
7:30 a.m. – I start work. I’m checking my emails, returning emails and calls.
9 a.m. – 12 p.m. – I’m doing outbound marketing. I dial through whatever leads came in.
1 p.m. – 3 p.m. – I try to close deals this time of the day.
3 p.m. – 5 p.m. – More marketing.
5 p.m. – 7 p.m. – I spend time with daughter.
7 p.m. – 9 p.m. – I go to the gym.
9:30 p.m. – Get back home.
10 p.m. – 12/1 a.m. – I’m working on marketing or trying to learn something new.
What he means by “marketing”:
I do all my own posts, so I have to come up with the copywriting for LinkedIn for the next day. I have a certain strategy that I use, so I have to come up with the content for that everyday. And I’m regularly checking to to see how my strategy/posts are performing.
How his process works:
I give the client a call the first time a lead comes in. My assistant is more or less on the front end and she will follow up the 2nd, 3rd, 4th time. She’s collecting all the paperwork after that.
Then, once the offer comes in, I call the people back and then I’m closing the deals.
His monthly volume:
Last month we funded $750,000. I’m typically generating a good 300 leads a month. Of course, they’re not all qualified, but it’s a good amount.
His biggest deal:
It was an $850,000 deal and I got a $50,000 commission.
Tips for having a home office:
I have a specific area in my house where I work. It’s a loft upstairs and once I’m up there, I’m completely focused on the business. There’s no TV in there. If you’re going to work from home, you can’t have distractions. You have to be of the mindset that once I’m at my desk, there’s nothing else – no internet surfing. If you’re going to work from home, you have to have a designated space where everyone knows “If I’m in there and the door is closed, don’t bother me.”
His mindset:
Putting a plan in place and doing everything you have to do in order to get it done. There’s no procrastination. If I’m going to do something, it’s going to get done. If I don’t know how to do it, I’m going to find somebody that does or go on the internet and find the answer to my question.
Where he’ll be on Oct. 4th:
At deBanked CONNECT San Diego. He even got an Early Bird ticket!
Dress for Sales at deBanked CONNECT – San Diego
September 17, 2018
The first 100 salespeople to check in to deBanked CONNECT in San Diego on Thursday, October 4th will receive a FREE shirt to help them close more deals 24/7. It says I Can Fund Your Business on the front and Ask Me How on the back.
“There is no mention of deBanked anywhere on the shirt,” said deBanked president and event organizer Sean Murray. “We simply want to create opportunities for salespeople to do more business. They can wear it on Main Street, at the gym, or while patronizing small businesses. Someone is bound to ask you how to get funded. Whether you’re offering small business loans, factoring, MCAs or something else, it still applies. Pitch what you do.”
This kind of marketing works. Of course, it can’t hurt to wear your own company’s attire as well. You can combine it with your company hat, for example. The idea is to get the right person who you otherwise might never engage with, to ask you the question, “Can you fund my business?”
And once you’re approached, use your training to diagnose what the prospect needs. Several industry experts say the “Consultative Sale” works best. If you happen to be offering MCAs or competing against an MCA product, articulating the details (pros & cons) will go a long way in building credibility. The MCA Basics course is something that can really make a difference for salespeople, for example.
THERE’S ONLY TWO WEEKS LEFT TO REGISTER FOR DEBANKED CONNECT – SAN DIEGO. Register now and check in as early as 1:30PM on October 4th to get your free shirt.
Thanks to Expansion Capital Group, South Dakota is On The Alternative Lending Map
September 11, 2018
Expansion Capital Group (ECG), which secured new financing at the beginning of the month for a total senior debt capacity of nearly $60 million, is based in Sioux Falls. That’s in South Dakota. With most alternative lenders based in New York, Florida or California, ECG is definitely unique geographically. But the company’s CFO Tim Mages told deBanked that despite the relative obscurity of the city, with a respectable population of 183,000, the city is a very good place to start a business. Particularly in the finance sector.
According to a 2017 survey conducted by CNBC and SurveyMonkey, Sioux Falls is among the top 15 American cities optimal for starting a business. Why? Because South Dakota has no individual or corporate income tax and business costs are more than 20 percent below the national average. As one of the fastest-growing areas in the country, Sioux Falls has a rate of population growth that’s nearly four times the national average, according to the survey.
Also, Wells Fargo and Citibank both have a significant presence there, so there is an existing pool of talent in the lending space.
In addition to ECG’s unusual geography, the way it obtains the bulk of its business is also uncommon. Mages said that 50% of its business comes from other lenders who either turn down the applications or don’t have enough capital to lend to merchants. Mages said they can “turn coal into diamond.” The company primary funds B- to C- paper deals and services a variety of industries with the bulk coming from transportation/trucking, construction and business services. ECG provides loan products, which compose about 80% of the business, as well as merchant cash advance, which makes up the remaining 20%.
Mages expressed a lot of enthusiasm for the company’s technology, which he said is very helpful because it can save a lot of time. For instance, he said their system auto-declines 25 to 30% of the applications they receive, which can be between 3,000 and 7,000 a month.
“We then want to get as competitive as we can [for the right applications,]” Mages said.
ECG ranked #802 on 2018’s Inc. 5000 list of fastest growing U.S. privates companies. Founded in 2013, ECG now employs 65 people. According to Mages, there are 23 underwriters and 11 internal salespeople, plus in-house legal and regulations team, a marketing team and a merchant support team. There is a tiny office of two people in Delaware.
The Broker: How Copelon Kirklin Became a Dealmaker
September 3, 2018
Title: President of KPC Group, one man broker shop.
Location: Kenner, Louisiana. Fifteen minutes outside of New Orleans.
What’s your morning routine?
I wake up at 6. I get a quick breakfast. I check my emails and then on to phone calls.
What keeps you going throughout the day?
My gasoline is my family. They’re my coffee, my 5-hour energy. They’re my motivation because I know what I want to give them. I’ve been able to accomplish some things in this business and [be able to] provide some of things for them… So no coffee here. Just the family. That’s my fuel.
Biggest deal?
$2.5 million deal. It was an SBA loan and I had 1 point in it. So I made a $25,000 commission.
What are a few of your biggest challenges as a broker?
If I’m dealing directly with a merchant, at the beginning, the way they represent themselves on paper regarding their revenue – everything looks good. And then when the actual bank statements come through, it doesn’t match up. I mostly work with construction contractors. It’s a niche and it’s pretty simple. But it’s only simple if [merchants] don’t misrepresent their financials, if they’re telling the true story.
Also, I don’t mind working with brokers…it doesn’t matter if you’re in the deal 50-50 or you’re just passing me a deal of a friend…I pay 50% every time, because I want to foster more relationships and get more deals that way. The challenge is when the co-broker can’t let go of the client to let me deal with them. It’s when they want to be the go-between. When they want to communicate through me to the client and it just doesn’t work that way. I haven’t closed any deals when another broker tries to work that way.
Could you tell me about your first deal?
2014 was the first time I closed a deal in finance…and I only made $500. But I tell you, it was the best thing that happened to me because it let me know that it was possible. There was this one moment when I was really questioning “am I supposed to be doing this?” And I’ll never forget that day. I was sitting in my bed and I just had this look on my face and my wife asked me what was wrong and I told her “I don’t know if this is for me because I’ve been doing this for [a few] years and nothing’s happened yet.”
And to my surprise, she said “pick up that laptop, open it back up and you get back to work. It’s going to work out. You’re not doing this in vain.” And lo and behold, two weeks later, I closed that first deal at $500 [in commission], and the next week I closed two deals, one for $1,100 and one for $1,400. And I was just on my way from that point.
How did you learn to be a broker?
I learned from the internet. I found leads organically because I didn’t have any money for leads. LinkedIn was my best friend at the time and it’s still my go-to. It was where I learned that people are willing to do business with you without meeting you. I got hooked on it – developing my profile, adding to it, learning, making mistakes, chasing pipe dreams. [Those many months] before closing my first deal were just a lot of growing pains.
How do know when something isn’t real on LinkedIn?
It’s really about learning to do due diligence and not taking people at their word, even though you would love to. You check out their background. Do they just have a personal email address? That’s not always a killer, but it does help if they have a corporate email address if they’re telling you that they’re a lender. Learning that someone is actually a broker when they’re saying that they’re a lender. Checking Ripoff Report, seeing if [someone] has a website, learning to tighten my filter. In the beginning, you want it to be easy. You want to take people at their word. And I fell for [tricks]. But you have to do your homework.
The Google Battle for Lending & SMB Finance Keywords Revisited
August 29, 2018When it comes to Google’s organic search for major keywords, companies like Nerdwallet and Fundera still dominate. A few players, however, have gained or lost significant ground since last year.
The Small Business Administration relinquished its place on the first page for words like “business loan” and “business line of credit” while PayPal and Credit Karma have begun to make major appearances as their activity in these markets increases.
Take a look:
| Keywords | Fundera | Fundera | PayPal | PayPal | Credit Karma | Credit Karma | Kabbage | Kabbage | OnDeck | OnDeck |
| Date | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 |
| business loan | 1 | 1 | 2 | 3 | 4 | 5 | ||||
| merchant cash advance | 3 | 2 | 2 | 4 | ||||||
| working capital | 8 | 9 | ||||||||
| commercial loan | 3 | 1 | 5 | |||||||
| small business loans | 2 | 1 | 3 | 5 | 4 | |||||
| business line of credit | 2 | 2 | 5 | 3 | 3 | |||||
| fast business loan | 4 | 5 | 1 | 4 | ||||||
| business loan with bad credit | 7 | 5 |
| Keywords | Lending Club | Lending Club | Nerdwallet | Nerdwallet | National Funding | National Funding | Traditional Banks | Traditional Banks | SBA.gov | SBA.gov |
| Date | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 | 9/14/17 | 8/29/18 |
| business loan | 9 | 6 | 3 | 7,8 | 5 | 4,7 | 6 | |||
| merchant cash advance | 4 | 1 | 8 | 9 | ||||||
| working capital | 4 | |||||||||
| commercial loan | 2,7 | 3,8,9,10 | ||||||||
| small business loans | 9 | 3 | 7,8 | 5 | 7 | 1 | 2 | |||
| business line of credit | 11 | 1,4 | 1 | 6,7,8,9,10 | 4,6,7,9,10 | 5 | ||||
| fast business loan | 2 | 3 | 5,6 | 8 | ||||||
| business loan with bad credit | 1,4 | 1 | 2 | 2 | 3 |
As mentioned in previous posts, this is not a scientific analysis. Keywords are measured using a wiped browser on my own computer.
The value of a Page-1 ranking too, is not as valuable as it once was, due to the heavy placement of paid ads above the search results. Ads, however, are not a factor for the keyword “merchant cash advance” since Google banned all advertising for that search term last Fall. Originally it was theorized that the ban was accidental, but ten months later it is still in place.
No such ban exists on Bing.
Read my previous analyses on the industry’s search war over the years:
September 2017 The Google Battle for Lending and SMB Finance Keywords
December 2015 Google Serves Low Blow to Merchant Cash Advance Seekers
March 2015 Google Culls Online Lenders – Pay or Else?
October 2014 Merchant Cash Advance SEO War Still Raging
August 2014 Six Signs Alternative Lending is Rigged: Do Lending Club and OnDeck have a helping hand?
October 2013 Google Penguin 2.1 takes swing at the MCA industry
August 2013 Your merchant cash advance press release may be hurting you
December 2012 Is Google your only web strategy?
July 2012 The other 93% [of leads]
April 2012 The SEO war continues
February 2012 The SEO War for Merchant Cash Advance: The first story on this topic
