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Shaw Merchant Group
Monday, January 25 2021
Making Money Selling Merchant Cash Advances as a Broker

When most sales companies get into selling merchant cash advances, they concentrate on logistical concerns. They study what the market looks like, and try to determine how they're going to supply what it needs. From there, they concentrate on making as much commission as possible from their deals. This isn't a bad place to start, of course, but it's far from the whole story. Since the market is constantly changing, there's more to selling merchant cash advances these days than simply making commissions.

Sales agents and brokers actually have a huge role in these dealings and provide an important service to companies that fund merchant cash advances. Since their role might seem a bit vague to you at first, let's explain how a deal like this works, and then you might see the kind of value that they bring to this process:

1.) A merchant is contacted / a merchant contacts the sales company. This can happen a few different ways. A sales organization may follow through with a lead and call the merchant, or the merchant may contact the company after seeing information about the opportunity.

2.) The merchant will have to fill out an application. In addition to the application that will ask for basic information, the merchant will also have to send in paperwork such as bank statements.

3.) The sales company will continue to contact the merchant until he has filed the paperwork.

4.) The sales company will decide which provider should fund this particular merchant.

5.) The sales company will then send this information to the provider for evaluation.

6.) The provider will send their approval and conditions back to the sales company.

7.) Sales representatives then explain these conditions to the merchants.

8.) The merchant decides to take the offer.

9.) The sales company asks for the contract from the provider.

10.) The sales company gives the merchant the contract to sign and any other relevant paperwork.

11.) The sales company sends all of this paperwork back to the provider.

12.) The provider ties up any loose bureaucratic ends and then sends the money to the merchant electronically.

13.) The sales company is paid for the deal.

Clearly, sales companies play a significant role in most of these transactions. They serve as an important “middleman” that helps the provider and the merchant understand each other. As the market for merchant cash advances increases, more opportunity for both business owners and funders will arise over time.

Let's change gears a bit though, and take a look at what this means for the bigger picture of being a broker.

Supposing that nothing radical changes in this market, more and more brokers will tend to materialize and this will flood the supply side, which will cause most brokers to face a loss in revenue. Indeed, as a market grows and there is more demand, there is more overall money to be spent on brokers, but the “pie” will be divided into much thinner “slices” between them. In other words, being a broker will be less lucrative on an individual level. Brokers will find themselves working longer hours for less reward, and funding companies will continue to make more money.

In a case like this, you might be able to carry on for a time, trying to make as much money as you can in spite of the increasingly saturated broker's market. However, it's getting harder to build a brokerage company if your only source of income is commissions. You are much better off if you invest in the business yourself and partially fund these loans with your own money. Instead of wasting your time chasing more leads, why not make every lead generate more income?

You can try a few different techniques for making money in this business using your own cash, and we'll discuss some of those basic strategies in a moment. First, let's talk about a little bit of history:

In the first decade of the 21st century, providers decided to bring sales companies into their dealings and allow them to partially fund these cash advances. They call this activity “syndication.” It quickly became obvious that syndication was a good move because providers found that having brokers vet their merchants beforehand led to higher quality deals that were less likely to default. The broker is there to make sure the deal goes through properly, and normally he will take care of the customer very well because his own money is on the line. Brokers helped create a long-term relationship between merchants and providers. This helped funders to potentially make more money.

Originally, syndication wasn't as common, and only a few providers allowed it. Nowadays, many companies use sales organizations in this way. When you're new in this business, put your energy into finding a good provider which will allow you to put your own money on the line.

Strategies for Making Good Money Selling Merchant Cash Advances

Let's look at some concrete numbers so that you can get a feel for how you can make money in this industry. Keep these rough stats in mind:

  • Deals vary in terms of amount, but the average is around 35,000 dollars.
  • Factor is 1.39 on average.
  • You can expect the average commission to be around 8 points

So now let's play with some numbers and come to a few conclusions:

From Commissions: If you fund 100 deals, with an average commission of $3,000 per deal, you can expect to earn $300,000.

Rolling Your Commissions Into the Deal: If you fund 100 deals, with an average commission of $3,000, multiplied by a factor of 1.39, then you can expect $417,000. 

Co-funding: If you co-fund 100 deals of a total amount of $2,000,000 from your own pocket, multiplied by 1.39, then subtract the original $2,000,000, then you are left with $780,000.

Add to that an average commission of $1,500 for 100 deals, and you also have $150,000 in commission.

Total = $930,000.

You can make substantial money even when you're not taking on all of the risk. In the last example above, you only funded half of the deal with your own money, but you still made some money on both sides—commission for the 50% that you did not fund and a good ROI on the half that you did.

So you don't have to give up the idea of commissions altogether. Providers that allow you to fund part of the deal will also allow you to collect commission. This is the smart way to make money in this business, because as you can clearly see, you stand to make many times more than if you relied on just commission alone. This is a great way to grow your business even if you're not acquiring many new customers.

Posted by: Scott Shaw AT 01:58 pm   |  Permalink   |  Email

If you're looking to start a career as a credit card processing agent and begin selling merchant services, you're in luck. The demand for merchant services is on the rise as more and more businesses are moving towards accepting credit and debit card payments. This presents a great opportunity for individuals who are looking to start their own business or work in sales.

We will discuss what it takes to become a credit card processing agent, the steps you need to take to get started, and some tips on how to be successful in this industry.

What is a Credit Card Processing Agent?

First, let's define what a credit card processing agent is. A credit card processing agent, also known as a merchant services agent, is a salesperson who works with businesses to set up credit card processing services so that they can accept credit and debit card payments from their customers. These agents work with payment processing companies to provide businesses with the equipment and services they need to process card payments.

Becoming a credit card processing agent can be a lucrative career choice, as many businesses are willing to pay a commission for each new merchant account that is set up. This means that the more accounts you are able to sign up, the more money you can make.

Steps to Becoming a Credit Card Processing Agent

1. Research the Industry: Before you dive into becoming a credit card processing agent, it's important to do your research on the industry. Understand how credit card processing works, the different types of services that are offered, and the major players in the industry.

2. Obtain the Necessary Licenses and Certifications: In order to become a credit card processing agent, you may need to obtain certain licenses and certifications depending on the state you plan to operate in. Check with your local government to see what is required in your area.

3. Find a Payment Processing Company to Partner With: The next step is to find a payment processing company to partner with. Look for a company that offers competitive rates, reliable service, and good customer support. Some well-known payment processing companies include Square, PayPal, and Stripe.

4. Set Up Your Business: Once you've partnered with a payment processing company, you will need to set up your business. This may involve creating a business plan, registering your business with the appropriate government agencies, and setting up a business bank account.

5. Develop a Sales Strategy: As a credit card processing agent, your main job will be to sell merchant services to businesses. Develop a sales strategy that outlines how you will find and approach potential clients, how you will pitch your services, and how you will close deals.

Tips for Success as a Credit Card Processing Agent

1. Build Relationships: In the world of sales, building relationships is key. Take the time to get to know your clients, understand their needs, and provide them with personalized solutions. This will not only help you close more deals but also build a loyal customer base.

2. Stay Up to Date on Industry Trends: The payment processing industry is constantly evolving, with new technology and regulations being introduced all the time. Stay up to date on industry trends and be proactive in adapting your sales strategy to take advantage of new opportunities.

3. Provide Excellent Customer Service: Once you've signed up a client, it's important to continue providing them with excellent customer service. Be responsive to their needs, address any issues promptly, and go above and beyond to ensure their satisfaction.

4. Network: Networking is an important part of building a successful career as a credit card processing agent. Attend industry events, join networking groups, and connect with other professionals in the field to expand your reach and generate new leads.

5. Set Realistic Goals: Set realistic goals for yourself in terms of the number of merchant accounts you want to sign up each month, the amount of commission you want to earn, and the growth of your business. By setting specific goals, you can track your progress and stay motivated.

In conclusion, becoming a credit card processing agent can be a rewarding career choice for individuals who are looking to start their own business or work in sales. By following the steps outlined in this guide and implementing the tips for success, you can set yourself up for a successful career in the merchant services industry. Good luck!

In the competitive world of merchant services, offering white label payment processing solutions can be a game-changer for building your Merchant Services ISO (Independent Sales Organization) business. White label payment processing allows you to rebrand and resell payment processing services under your own company name, giving you the opportunity to offer a wide range of payment solutions to your clients without the need to invest in developing your own technology. In this article, we will explore the benefits of using white label payment processing to build your Merchant Services ISO and how it can help you grow your business.

1. Expand Your Service Offerings

One of the key benefits of using white label payment processing is the ability to expand your service offerings without the need to invest in developing your own payment processing technology. By partnering with a white label payment processing provider, you can offer a wide range of payment solutions to your clients, such as credit card processing, mobile payments, e-commerce solutions, and more. This allows you to meet the diverse needs of your clients and attract new business by offering a comprehensive suite of payment processing services.

2. Enhance Your Brand Visibility

White label payment processing allows you to rebrand payment processing services under your own company name, logo, and branding. This not only enhances your brand visibility but also helps you establish credibility and trust with your clients. By offering white label payment processing solutions, you can position yourself as a one-stop shop for all of your clients' payment processing needs, building brand recognition and loyalty in the process.

3. Increase Revenue Opportunities

By offering white label payment processing solutions, you can create new revenue streams for your Merchant Services ISO business. You can earn revenue through client onboarding fees, monthly processing fees, and other related services. Additionally, white label payment processing allows you to set your own pricing and margins, giving you the flexibility to tailor your pricing strategies to maximize profitability.

4. Streamline Operations

White label payment processing can help you streamline your operations by consolidating your payment processing services under one provider. This simplifies the management of your merchant accounts, reduces administrative overhead, and allows you to focus on growing your business. By partnering with a white label payment processing provider, you can access a range of tools and resources to help you manage your client accounts more efficiently and effectively.

5. Improve Customer Satisfaction

Offering white label payment processing solutions can help you improve customer satisfaction by providing your clients with a seamless and reliable payment processing experience. White label payment processing providers typically offer robust customer support services, advanced reporting tools, and fraud protection services to help you meet the needs of your clients. By offering high-quality payment processing services, you can enhance your reputation as a trusted advisor and build long-lasting relationships with your clients.

6. Stay Competitive in the Market

In the fast-paced world of merchant services, staying competitive is crucial to the success of your business. By offering white label payment processing solutions, you can differentiate yourself from your competitors and stand out in the market. White label payment processing allows you to provide innovative and customizable payment solutions to your clients, giving you a competitive edge and helping you attract new business in a crowded marketplace.

In conclusion, white label payment processing can be a valuable tool for building your Merchant Services ISO business. By expanding your service offerings, enhancing your brand visibility, increasing revenue opportunities, streamlining operations, improving customer satisfaction, and staying competitive in the market, white label payment processing can help you grow your business and achieve long-term success. Consider partnering with a white label payment processing provider to take advantage of these benefits and take your Merchant Services ISO to the next level.

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