In the Merchant Cash Advance industry the two major factors that determine pricing for clients is the expected collection time for a contract and the associated risk with the contract. As we have all seen bad debt is the main driver behind the cost of money (and also makes or breaks many of our competitors.) For 2011 AFS has just launched a true "Risk-Based" Pricing model to be more aggressive on pricing contracts for merchants. For agents that have not submitted a deal to AFS in the past three weeks, you will be quite surprised on the outcome of your next submission.The new pricing calculator now looks at more than just expected payback period to price a deal. Many other factors are now weighed including, time in businesses, expected contract length, seasonality, industry and twenty-two other factors. In addition, the calculator also allows for our Account Executive to provide multiple scenarios pricing very quickly, making it easier to offer multiple contract scenarios across all types of variables (withholding percentages, cost, funding amount, etc.)
The result for our clients is that merchants that show greater credit worth will now receive preferential pricing. The pricing also takes into account our clients' payment track record on repeat contracts. The goal is to keep an AFS client satisfied for the long haul and loyal.
However, the largest improvement to our agents is the ability to modify their compensation stream to achieve better pricing without affecting the total amount earned on a deal. Our Account Executives can now offer pricing options moving a portion of the upfront commission to payback residual. This will be done only upon request of the Agent to be more competitive on pricing and is a great solution (instead of having to reduce commission to get a deal done.)
Bottom line is that AFS Agents are now able to customize pricing for contracts to close more deals and build a strong portfolio of clients. For more information or better yet to take advantage of this new pricing please do not hesitate to contact your Account Executive or Ray Felts, Agent Development Manager at 800-760-5516, ext 106.
