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There are a lot of changes looming on the horizon...
Technology is connecting merchants directly with lenders in a fast, simple fashion. Companies like fundera, buynance, and surely others are tapping into this technology to aim for volume-based market grabs (no disrespect to them, it's genius).
Originator's portfolios are being damaged by high commission payouts (CAN Capital paying 17 points up-front for 20-month terms with a 1.24 buy rate).
How long will these high commissions last?
Lenders are gaining market share and word-of-mouth advertising to end users. Their marketing efforts and branding are increasing almost exponentially.
Direct mail returns are diminishing rapidly. Pieces that used to yield 1.25-2% response rates are now dwindling to 0.5-1%. Those snappack mailers with the check on them? I think every merchant on the planet has seen those by now.
Competition is picking up. Maxing out deals and expecting to fund them consistently is no longer the norm, unless you have a referral or a unique lead source.
Big money is buying in. Lending club goes public, CIT is buying in, Pawnee leasing starts windset capital... On Deck goes public, Goldman Sachs entering the space...
The question is: is this the BEST time to be a broker... or the worst?
Technology is connecting merchants directly with lenders in a fast, simple fashion. Companies like fundera, buynance, and surely others are tapping into this technology to aim for volume-based market grabs (no disrespect to them, it's genius).
Originator's portfolios are being damaged by high commission payouts (CAN Capital paying 17 points up-front for 20-month terms with a 1.24 buy rate).
How long will these high commissions last?
Lenders are gaining market share and word-of-mouth advertising to end users. Their marketing efforts and branding are increasing almost exponentially.
Direct mail returns are diminishing rapidly. Pieces that used to yield 1.25-2% response rates are now dwindling to 0.5-1%. Those snappack mailers with the check on them? I think every merchant on the planet has seen those by now.
Competition is picking up. Maxing out deals and expecting to fund them consistently is no longer the norm, unless you have a referral or a unique lead source.
Big money is buying in. Lending club goes public, CIT is buying in, Pawnee leasing starts windset capital... On Deck goes public, Goldman Sachs entering the space...
The question is: is this the BEST time to be a broker... or the worst?
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