As our economic times get more challenging again, the demand for the Merchant Cash Advance product and other alternative sources for working capital will see great increases in demand. If you are selling the MCA product its a great time to seize this opportunity and build your client portfolio. The key will be targeting the right clients that will have the highest chance of getting approvals from American Finance Solutions and other funding companies.By crafting and targeting your marketing effort you'll greatly increase your return-on-investment for your marketing dollars. Put yourself in the funding companies shoes. Which clients would you want to put your capital at risk with?
1. Recession Proof Businesses are the obvious choice. Just a few of them are:
- Low Ticket Restaurants - People still eat out in tough times, they just go to restaurants that they can afford. The middle market (entree price of $12 to $20 will get crushed once again).
- Auto Repair - People cannot afford a new car, but will plow a few extra bucks into their current vehicle to keep it running.
- Health Care - Dentists are a great example of how medical is generally recession proof. Nothing else makes a client whip out their credit card faster than pain avoidance!
- Liquor/Tobacco Stores - Vices are usually the last thing one gives up, enough said.
- Convenience Stores - When people feel poor (or less wealthy) they'll avoid big trips to the supermarket where they outlay $200 and opt for spending $40 with frequent stops a the local C-store.
- Mini-Escapes - Day spas and nail salons thrive during these times. Instead of spending a weekend at the shore, they do a spa day for the ladies why the guys hit the links (we absolutely love funding golf courses at AFS!)
2. Established Businesses
- Obviously a business with a multi-year track record and established clientèle is much more attractive.
- Clients using funds to take advantage of opportunity of buying a competitor or taking over the space of a failed rival.
- Business where the owner also owns the real estate have much more skin in the game as compared to those that lease. At AFS our risk-based pricing gives major points for this!
- Steady sales for a client goes a long way with funding companies. A business that consistently does $20,000 a month is much more desirable than the one that fluctuates wildly.
By utilizing the above targets and executing efficiently (closing) you'll maximize the most from the current opportunity in the MCA space.
