As the world of Merchant Cash Advance continues to mature we are seeing that price for the product is becoming less of differentiator. Service and speed of funding contracts is quickly becoming the factor for funding companies. At American Finance Solutions we've taken significant steps by investing in systems and people to address this issue. Over the past six months we have improved this significantly by two business days with most contracts funding in under four days.Even given all of your improvements, AFS does not control all the aspects of a deal. Both our clients and sales agents can greatly influence the speed of funding and ensuring that an approval doesn't get killed in the due diligence process. By following these two simple steps you'll greatly improve your success rate.
1. Don't Hide The Bad & The Ugly - So many times we see merchant and/or their sales agents trying to brush over some negative information about the business such as recent tax liens, being constantly two weeks late on rent or some other issue. With all the technology and tools that funding companies use such as site surveys, legal/public database aggregates, background checks, reverse phone look ups and even simple Google searches we find out about the issue eventually.
Our best sales agents (coincidentally the once with the highest compensation) present the Good, The Bad and even The Ugly on merchant's current situation. This allows us to properly structure and price a deal correctly upfront that doesn't put the client in a financial hardship, meets his or her needs, fits the funding companies risk appetite and yields enough margin to make sense for all parties. Often an inexperienced sales agent selling on price is also unaware of the Ugly. Top agents who are true finance consultants will educate their merchants to give them the whole story, that way they can present the entire situation in the best light to MCA funders to maximize approvals.
Nothing frustrates clients more than having to change terms or require payoffs of past due rent or just simple requests for tax lien payment plans at the 11th hour just prior to funding. Worse yet, when a company's due diligence staff discovers the undisclosed Bad or Ugly they start worrying about all aspects of the deal and client. The last thing the merchant or the sales agent wants to do is to turn a verification process into a Sherlock Holmes investigation adding days into the process and even resulting in the dreaded Denied stamp.
2. Have/Set Realistic Expectations - So often at AFS we receive contracts back and immediately give our Welcome Call to the merchant to confirm contract terms & payment method and inform them of the due diligence process. They are shocked that it is going to take three or four days to get their $50,000. It blows me away that intelligent business owners think that from a simple one-page application and a few bank statements that they faxed in a day ago will suffice for a company to wire them tens of thousands of dollars.
Unfortunately landlords are not always available and take a day or two to call or fax back. Setting up the collection method with a new credit card processor and ensuring that the withholding split is in place takes a couple of days usually as well (if there's a point of sale system that needs to be reprogrammed it could take a week or more).
More often than not its the weak sales agent that has promised funding the next day in order to get the deal that has created the issue. Sales agents have to take the 30 seconds to explain the process and set a realistic explanation that funding will be in three or four days and the repayment method must be in place (so download your terminals asap!) This way the client isn't blowing up the agents phone every hour, has a great experience and is happy to refer more clients since with a simple set of expectations he is delighted rather than frustrated. (Tip to sales agents especially - calling the funding company every hour to check on your deal doesn't speed things up, it actually delays it because people are using their time to talk to you rather than work on getting the deal funded).
By following the two simple steps above, both merchants and sales agents will see a dramatic increase in their funding success rate with minimal frustration.
