Sam Kaye Talks Sales Tips and Closing Deals With Sean Murray

0:00 Sam Kaye's Ethical Approach to Closing Deals So I'm here with Sam K Sam K Sells, and we're going to talk about closing deals, things brokers need to know. I might ask you a bunch of questions about it. And I have a book now. 0:16 You didn't ask me to get your book. I bought it, you know, unsolicited. And I'll be honest, I read the whole, I read the whole thing. I thought there was a lot of really good advice in here. And what really struck me was that the way you went about it was that you led from like an ethical standpoint. 0:32 And for me, you know, running debanked and the conferences and all that stuff, that's something I was, I hoped I was going to find when reading it. And I, and I found it, I thought it was a very honest and transparent way of communicating that I think would help anybody. 0:49 And so it's kind of an honor to, you know, to hear from you since you're, you know, out there on the front lines talking with the brokers and training them all the time. So, you know, I might ask you a few questions about things that are in the book. So, you know, thanks for for coming. Appreciate it. 1:02 Speaker 2 Thank you. Thank you so much for that, for those words. Yeah. And the feeling is mutual. When I was dialing, I had debanked on my, my browser tab and it, it directly correlated with me, I believe closing deals, the industry updates, you know, where I would like, I would constantly see, oh, this, this state, tighten the regulation so I could relay that to merchants. 1:20 So I'm honored to be here as well. 1:22 Why Sales Rep and Manager Alignment is Crucial All right, so I'm going to ask you, I'm going to ask you this first thing because I read the book and there were there was a lot of good tips and I think a lot of them were related to making sure you're doing it right by the client, thinking about reputation, you know, being patient, things like that, trying to be a helpful guide to the merchant. 1:45 And one thing that's stuck out to me is that I've been to a lot of sales shops in my life, but in this, you know, industry for 20 years. And I think one of the things that's important to a recipe like this working, you know, your strategy is working, is that there needs to be an alignment between the reps on the phone and your sales manager running the floor. 2:09 Because if you're an, if you're an individual Rep and you've got your own, you know your recipe and you listen, you know, you've watched your YouTube videos and your Instagram stories and you're like, this is what I'm going to do. And you start to apply it. But it conflicts with how your shop wants you to act. 2:25 It kind of sabotages you in a way. And what I mean by that is that if you, if you think about long term goals and how you want to build up your book, hopefully that you're a sales manager, the company you work for, the ISO shop also wants you to think about it that way. 2:42 Because there are shops that say don't look at it at it that way. They want you to close deals, not tomorrow. Right now it's all about the short term, how important you've been to a lot of shops, how important is the alignment between the reps and the sales managers? 2:59 Speaker 2 It, it's such a great point because I have, you know, reps messaging me on, you know, Instagram or emails and they say that, you know, they want to use these techniques, but the shop owners don't want them to, or the managers. And it's like, exactly like you said, I'm, you know, they might be looking at it more as like what can get done today? How much can we fund today? 3:15 Whereas I'm looking at it as like long term business. And I, I would rather sometimes maybe not fund somebody specifically now to work to get them something better when a lot of people disagree with me on this. And then usually what ends up happening is you, you gain this client for life and they're in your book of business. 3:31 So whenever they do need capital, they end up, they end up coming to you. So I, I think it's huge. I think a lot of the shops that I go to, the guys that are really, you know, on the, on the cutting edge, some shops they have that, you know, their sales doesn't have to be so good because they're marketing so high. 3:46 Like I'm working with shops that do 300,000 a month in Google ad spend and meta spend. So it's like they could really care less about developing their people. But I find that, you know, the the more the better your sales are, your marketing doesn't necessarily have to be on point because you're so you're so good at qualifying and then selling the deal, selling the relationship that you end up doing more business than you would just by share marketing alone. 4:09 But yeah, to answer your question, you know that it's it's a top down situation. If you're a shop owner or manager and you're just in the back office all day, you know, no wonder they're not performing, you know, Or if you know they're just in cubicles all day dialing, you know, really cold data and there's no leadership and culture, then you know, it's tough. 4:26 Speaker 1 Right, Yeah. So you have to be kind of on the same page from the get go because if you know, if you're thinking to yourself, I'll make 10 points tomorrow and your boss is saying I'd rather you make eight points today because that's money in the bank today. You're already kind of at odds right with with what you're trying to achieve. 4:44 So I feel like alignment has to has to be important because every shop runs completely differently. I'm sure you've seen a million different. I've never run a I've never run a sales floor, but I, I've seen situations where a sales manager has been very, very aggressive about it. 5:01 Doesn't these things don't matter. Reputation doesn't matter, You know, book of business doesn't matter. And it's not always coming from a bad place. I find that sometimes when you get these aggressive sales managers, they're not doing it because they're necessarily bad or don't have the merchants interests at heart, but they're actually looking at their ISO shop as a small business themselves, right? 5:25 And they're thinking they have to pay rent, they have to pay for marketing and they're looking at it from how do I keep this going? And so eight points today is better than 10 points tomorrow, because I need cash in the bank. So when I'm talking to my Rep, I needed you. Do I need you to close this deal right now? 5:41 I don't care because I need I not because, you know, I want you to be a crazy in your face closer, but because it's important for me for the shop to run to get to get cash in the bank right now. And so you kind of have to work within this framework of the world, right. 5:57 And so being aligned, I feel like is definitely an important component to executing. I think your book mentioned like you kind of have to do all the different pieces for things to work, and I feel like alignment with whom you work for has got to be a part of that. 6:16 Aggressive Sales Through Understanding Merchant's Business Yeah, and it's you're exactly right. And it's not necessarily, you know, the not to be confused with saying that, you know, not to try to win deals and not to be aggressive 1000%. I train people and reps to be aggressive and sales managers and closures. But the difference is, for example, like a lot of times people will be brought in under false pretenses so that they're whether they're clicking an ad or maybe they the person on the phone said they have a, you know, 1% thirty year term type of product that is, you know, insane. 6:41 It's not real. And then so now you're at the point where you have an approval, even if it's an, you know, an A paper funder approval, these guys don't want to take it. You know, it's the hardest close in MCA I think is an A paper person that knows they have access to conventional financing in banks. And in those situations, it's all about the relationship and the purpose of what they're doing with it. 7:00 So, so usually what happens is they don't take the MCA, write it right away. Like they come in, let's say 3 or 4 weeks later and then someone usually lies to get them in the door. They say, take this, I've seen these 700 K line of credit contracts. So, so my thinking is educate them, you know, find out what the purpose for the capital is. 7:16 And then if they are going to take an MCA, they're going to take it from somebody that's not trying to like, you know, jam it down their throat, Someone that's really understanding their business. That's why we train, you know, the industry specifically to know like if you're in construction, you're waiting between jobs or you know, if you're a restaurant, maybe there's, you know, payroll gaps, whatever it is, vendor supplies where the business owner doesn't feel the pressure. 7:36 A lot of reps, they feel pressure when they're dialing and then the business owner feels pressure. You know, a lot of times like, you know, they wonder why that they're getting ghosted on the phone, Why why won't they answer my call? And it's so it's so black and white that the merchant feels that you're trying to sell them something. 7:52 And in that type of an arena where they feel the pressure, it's, it's going to be a hard time where when there's sales resistance, they're not like Jeremy Meyer, he's a sales Turner. He talks about sales resistance. And when the sales resistance is high, they don't want to have a conversation. But if I have a conversation with you, not desperate where I'm just looking to find like your, whatever your situation is, how can I help? 8:11 Let's say it's construction. Let's say you have a job that's going to pay you 100,000 and the materials are 50K and the labor and all that and the payback on 50 is 75. So most would be like what you know, 50%, even though obviously it's factor rate, it doesn't make sense. 8:27 But in that situation, they're still going to expand their business, make a profit of 25 K and still, you know, pay their employees and their people. So it's all about structure versus just saying, hey, I have 50K for you with a payback of 75K with no structure and positioning. It's tough. 8:43 Speaker 1 So in that example you gave, it sounded like you knew things about the merchants business, right. So and so when you were able to, when you were communicating the cost, you're using a real world example of something that they actually were going through, right. So how important is it to ask merchants about their business and what they're using the money for? 9:03 Speaker 2 Huge. I'm giving away the secrets here for you, Sean, but this is this is what we train. It's something that's so overlooked to have an expertise on every single industry. It will, it will, it'll fund so many more deals than than even the line and the bait and switching. 9:19 If you talk to a construction company and and you're speaking them, what's the, what's the purpose for the capital? What do you need it for? Whether it's for equipment, whether it's to cover payroll, whether it's to get materials and you say, OK, nice. You know, how, how long do you go between jobs? Do you get paid on net 30s, net 60s? Are you a general contractor builder? 9:35 When you ask these questions immediately, they, they respond to it like they, they relate to you and they know, oh, this guy, Sam, he's not just trying to give me something, he's trying to understand my business to help me position something. And I'll say flat out, and again, people hate me for this, but I'll say, look, maybe a merchant cash advance isn't the right fit for you. 9:54 Let's see if we can qualify you for something better. And nine times out of 10, they don't qualify. You know, it's unfortunate, but but if we can educate them on why they'll go with the MCA because they know that you took their time with them. You know, the same goes for trucking. If you get a trucking client and you say, OK, nice, what do you guys haul? 10:11 One of my mentors, you know, literally showed me that question. It changed the trajectory of whenever I have a trucking deal, I say, what do you guys haul? How do you guys get jobs? You're on a job board, a contract. Do you get paid on net sevens, net fourteens? And just instantly you're this expert where they want to hear what you have to say because they don't feel the pressure that you're trying to give them. 10:29 Speaker 1 Something right Yeah. So if you feel like, hey, you know, we're kind of on the level, you know, we're talking about, we're talking about your business. We're just talking about business in general. Let's see how we can make something work within the, the context of, you know, how you operate probably comes across a lot better. You mentioned competing against people who offer this, the line of credit. 10:49 It's basically a scam, right? It's a, you know, I'm going to give you $1,000,000, a 1% interest. It's a line of credit first. You just have to do this other thing, right in order to get it. And it's a very common scheme that people have to compete against. And I think there's a reaction to say we need to immediately get these people out of the picture in order for the business to run ethically. 11:13 And I, I agree, I get it. The problem is it could take time for these bad actors to disappear. And the problem is you have to work within a world in which they currently exist, right? We can just wish that they'll all be gone. And I'm going to report them to some agency and they're all going to disappear. 11:31 But right now, today, when I when I call merchants, not me, but when, you know, when a broker calls merchants, they're going to have to deal with it today. 11:38 Educating Merchants Against False Line of Credit Promises And so how do you compete against people who are doing this particular, running this particular scheme? Is it a matter of education? I mean, how do you defend yourself? Because we see merchants fall for it all the time. We see merchants literally say, I'm not taking what you're offering because they're offering me a huge line of credit, low interest. 12:00 And you know, you're saying it's not real. You know, it's a stamp, right? And it sounds almost, depending on how you react to it, it could sound like sour grapes that you lost so badly. You know, you react so defensively, you know, and, and the business owner's like, well, it's just too bad you lose type of thing. 12:19 What you know, what do you advise? How do people can compete against this? 12:23 Speaker 2 That's a great question. That's one of the main things that I would hear and and you're you hit it right on the head where if you if you start like beat like, you know, bad mouthing the competitors, it lowers your status. You, you sound like, like you said, sour grapes. So the way that I found it's very simple, but but you go, let's say they say, first of all, let's look at whatever the approval is. 12:42 OK, So let's say they they're like, oh, well, the broker told me that, you know, they have a 30 year term. That's that's, you know, 6 or 5% interest. The first question now mind you, and I know you know this your time as an underwriter, you know, no one's giving them money below prime rate, right? So that's one ace in the hole that I have. 12:58 If all else fails, I'll say go to Google and look at the prime rate. This is the money the Federal Reserve lends to banks. So unless you're Chase or Wells Fargo, so you know, you're not going to get a conventional term loan at this rate. But before going to that, I go, oh, nice. So, so when did you send them your tax returns? I'm giving away the gold here. 13:14 But like, you know, the merchant always says what? I never sent them any financials. And then you explain to the merchant that to get approved for conventional financing, they have to analyze your tax returns, you know, whether it be two years or three years. And 99% of the time they were never asked that. 13:32 So right away that disqualifies the offer as not real, you know, and also I know there's some there's some marketing things like let's say on cold emails or SMS. Well, they'll say, you know, you're pre approved for XYZ that I'm OK with because as long as you get the right deal for the business owner, I'm OK with because I look at it like, like, you know, a car commercial might say, come into our dealership 0% APR. 13:55 But in the fine print it says for well qualified buyers. So if you're sending mass emails saying we offer, let's say SBA rates or conventional rates, and then when they come in the door, you qualify them and they either do or they don't. I'm good with that, but it's like you said, where they're telling them before even seeing a shred of financials. 14:11 I've got $1,000,000 / / 30 years. And it's unfortunate because these business owners are desperate, you know, and they're, they're praying on the desperateness. These are guys that, that you know, that, that run their business tip top shape. They know their industry, they know their craft. But when it comes to finances, they just fall prey every single time because of how how desperate they are. 14:31 Speaker 1 Yeah, I can see that. Maybe maybe let's switch gears a little bit. Let's think about, you know, I told you before earlier, a lot of people ask me how did I get into the industry? 14:43 How Young Brokers Gain Confidence Through Tonality You know, they think I came from a event planning or journalism if you're new to the business, right? And I get it if you don't know me and you haven't followed me for a while, but I was an underwriter for two years and I was a broker for three years. Now this is a long time ago, so I won't pretend to be a sales expert anymore. 14:59 You know, I listen and I defer to people like yourself and the people who who do it every day. But I have have experienced doing that and I've also visited a lot of shops over the course of 20 years. It sounds crazy to say, but over the course of 20 years. And one thing I find younger people struggle to grapple with is that when they're 2021 years old, they have a little bit of an insecurity. 15:23 Some of them, some of them are overcompetitive, but some of them are a little insecure when they're talking to a business owner, say a business owner that's 50 years old, been doing their crap for 30 years and they get on the phone and they say, I'm going to help you with your business, right? 15:40 You know what I mean? It's like, who are they, you know, to say that? And your insecurity, I think sometimes it bleeds through the phone, you know, anything because they're like, it's like they don't, they don't even believe it, even though they, they're trying to believe it. And so, you know, you speak about confidence, I think, and you know, in, in different aspects of your, your sales trainings. 16:00 How did the 20 year old get confidence talking to someone who's been in business for 30 years? 16:06 Speaker 2 That's no, that's a great question and I hear that a lot also. How do you get the confidence? Now, there's a few ways that you can kind of manufacture this. Number one is to be detached. You know, people are thinking that and reps think that the business owner, they feel the pressure that you're trying to sell them something. But we forget that the Rep feels pressure also, whether it be to bring in an application to fund deals, whatever it is, if they take off the pressure and become detached, naturally they'll start to sound better. 16:30 And I don't mean to necessarily get in the weeds, but a lot of it is your tone and and your tonality. So a lot of younger people when they talk, they talk in an upward inflection like this. So I'm not sure. And gives off like a rookie kind of tonality versus when you're more experienced and you know, a business like someone like yourself, you naturally talk in a downward angle, like a downward tone. 16:50 And the human body reacts to tone way more than it reacts to words. Like I could take a really bad script but with the right type of tonality and make it sound good. A lot of people make the mistake where they dial with a super salesy tone. Hey, how are you doing today? 17:05 My name is Sam with XYZ Capital. I'm looking to fund you and the business owner just they completely clicked off 5 seconds ago. So I'd say tonality and being detached and becoming an expert like most people think when you dial to just start pitching right away, whereas I'm looking at him to qualify. 17:24 What did you need the capital for? What do you, you know, how do you look on your financials? How do you look in your revenue versus 99% of everybody else called and say, hey, you know, I'm a direct lender. I got your file submitted to me by brokers. How much do you need? And I did this pitch myself when I was first coming up until I found like a better way. 17:40 But I would say tonality, product knowledge, and being detached will go so far for someone that's 20. 17:46 Speaker 1 I feel as though tonality is understated in terms of importance. I know that there's like AI trainers and stuff now and people keep saying that like tonality, it'll it'll grade your tone. I'm thinking how important is tone? 18:01 But it sounds as though it's tone is really important. 18:04 Speaker 2 Oh, yeah, absolutely. Because it's like they talk about the limbic system, the brain. Jeremy Miners, it's a sales trainer that I like. And he has this good example of when you go into a store until you walk into the mall and a salesperson approaches you immediately you go, I'm just looking without even having to think about it. 18:21 So this is your subconscious, you know, this is your mammalian brain, you know, perceiving a threat. So when you cold call someone and they see, you know, they see the number, they don't recognize they're they're already turned off. You know, the pressure is super high. So you have to disarm them. So that's why we talk about things like like pattern interrupts. 18:38 So when you make the first, you know, initial, you know, the first second of the call you're saying, yeah, hey, Sean. Yeah, I was looking for a little bit of help with something. Immediately the pressure comes down, they become more focused. And then then you go into your pitch. Yeah. It looks like you guys were, you know, XYZ, looking for capital. 18:54 And it's like it's tone is so important. And women naturally have tone like built in. It's the craziest thing. Like women naturally have tone whenever I'm doing sales trainings. So they have like an advantage on that, on that side. And some guys, I wish I could show you this video of this kid Odell that I trained. 19:10 He has a really like a really deep voice like this. And it's very like it, it's, it can close people off. But now after training tonality, he has the inflections, the up and down and it he now he's a top producer. He was bottom 10% and now he's top five in the company. And I think a lot of its tone. 19:26 Speaker 1 He trained on inflections and that made a difference. 19:28 Speaker 2 Absolutely, yeah. 19:29 Speaker 1 A long time ago I was working in a sales room when I was a broker and there was a guy, new guy, who was at first he started at the junior he was, he was 20 years old. He looked like he was 15 and it sounded like he was 12. And we all thought, this isn't going to work, right. He's going to get he's going to get killed out there. And he actually ended up doing really good. 19:45 He was extremely confident and he didn't try to act like he was older than he was. He embraced himself. He knew he sounded really young, even for his age, and it worked. It ended up working for him, right? A natural success story. 20:02 But I also see people who are like 20 years old, who they put on, you know, a persona you were talking about like coming across as like 2 salesy. I've seen people literally put on a persona like that. They play a character on the phone and the most common one is, you know, they're Mr. Wall, Mr. Wall Street, you know, like they just watched a movie, you know what I mean? 20:23 And they just watched some training that. Fed into the movie, and now they're like, you know, I'm calling you from the New York Stock. Calling you from the New York Stock Exchange. I've literally heard that. Yeah, yeah, yeah. You know, we're right across the street from the New York Stock Exchange, you know, as if that's going to impress. 20:39 Maybe it does. I don't know. Do you think merchants care if you're across the street from the Stock Exchange? 20:43 Speaker 2 I don't think so. And it's funny that you mentioned that because it is a trap. Like I think everyone reacts to other people certain ways. Like I know, like, let's say if you're, if you're on the sales side, when a marketer talks, you want to listen. You know, if you're on the marketing side, when the sales guy talk, you want to listen. You know, the merge, the business owners, when they hear that stuff, they get turned off by that. 21:01 You know, like, like for me personally, I love the New York stick, you know, I love the the fast talk. And it's like, for me, I like, I love it. But some of these business owners, it can be a turn off, you know. So I think your example of this kid is a perfect example. Like he's authentic. He was living in who he is and he's not trying to come off like something, you know, and, and the tonality is it doesn't necessarily have to be something that you put on. 21:23 It's more like just being conscious of of how you speak at certain times and and that along what will carry so much weight. 21:30 Speaker 1 How do you suggest one practice tonality? What is, is there like a way to practice tonality and inflections? It's like, how do you go about that? Do you do it to yourself and like in the mirror, like do you listen? Do you record yourself? Like how does one do that? Practice it. 21:45 Speaker 2 You can absolutely do it in the mirror. You can practice it. What's weird is to have to do it like all the time. But but I would say practicing on the phones where you have, let's say your script and let's say it says you were looking for capital for your business, you know, and you're talking a downward tone, then you just practice that and just keep running it. 22:00 Another way to do it is to use your body. If you're trying to make a confused tone and you furrow your brows, naturally you'll have a confused tone. And that's what unlocks the brain of the prospect of the business owner of whoever you're looking to have the conversation with. And this goes back to, I think like Aristotle would talk about surprise and novelty, what would create focus and, and attention. 22:21 And that's all you're doing, let's say with a pattern interrupt, but with tonality. Yeah, it's, it's, it's just, it's repetition. You know, you're, you're looking to, to say things in a downward angle or in an upward angle or in a, in a, in a curious way and, you know, or an empathetic way. Like where if let's say a business owner says to you that their credit score is 500. 22:39 OK, this is a huge mistake I see from reps This is like the, I would say right above rookie to intermediate. When the business owner says they have a 520 credit score, they'll just go, Oh yeah, man, that sucks. Anyway, so, so you're not going to get approved XYZ first is the professional. When they say A5 20s credit score, they'll go, oh, OK, and why is it like a 520 score? 22:58 And with that empathetic tone, they instantly feel that I'm relating to them and they want to open up more to me because I'm showing that I care, you know? So definitely body language and just repetition. 23:10 Prioritizing Value and Trust Over Just the Rate So one thing that's very common that most people struggle with, especially if you're newer, is that it becomes this whole business, if you're on the phone becomes a rate game. You're competing against a huge marketplace of different products. Now, now, not everyone has the luxury of offering SBA loans and, you know, true lines of credit and stuff. 23:31 Some of us are kind of locked into a narrow set of products. It's just how it is. You might work for a shop. It only offers MCAS, right? And so with that in mind, some people get a little insecure about the cost and the rates because when they're pitching merchants, the merchants might say the rate. 23:49 And so you start selling the rate and you start getting all caught up in the rate. The rate, the rate, the rate, the rate. How important is the rate in the sale? 23:58 Speaker 2 So, so it's twofold. So when they're talking about the rate, this is classic sales psychology. The buyer is in is in price and you need to get them into value. You know, for example, if let's say you're you're selling fitness coaching, you know, you're not selling the meal plans and the workouts. You're selling the feeling of having ABS on a beach. 24:15 You know, if you're selling a car, you're not selling the Lamborghini you're selling, how are you going to feel driving it? So with capital, it's the same way. So you're not necessarily selling the rate, you're selling the expansion that they're going to do or you're selling them covering payroll. And so you're either going to have an ROI or you're going to have an opportunity cost. 24:31 We're just speaking about that, that you know, if they if they if they do the expansion, let's say they make an extra 5000 thousand, they employ more people, get more jobs, etcetera. If they do the payroll, they're avoiding the opportunity cost of not of let's say losing their employees. This is super important when it comes to rate because now it's not a question of the rate, it's more of what are you looking to do with the capital? 24:51 So for the same reason that the construction worker if the materials and everything like if you just say 50K with a rate of a 149. So 50K payback 75 sounds horrible, but if you structure it to what they're looking to accomplish and the caveat here is truthfully qualifying them. 25:07 And I work with a lot of shops that don't like SB as don't like term loans line of credit. They only want to sell MC as then it's it's all about the the purpose for the capital. So many times I hear reps making calls, they never mention what the purpose for the capital is or if they say what is the use of funds, they'll give them one word answer working capital expansion, and they just kind of move on the. 25:25 Speaker 1 Working capital, What do you think of that as an answer? Working capital. 25:28 Speaker 2 So I'll dig deeper. OK, nice. So Sean, what type of working capital and then I'll usually get the answer. 25:32 Speaker 1 So you don't let them off the hook. You got you. You drill down another level. Working capital. What does that mean? Yeah, that's what you asked them. 25:38 Speaker 2 Yes, because usually you'll find a purpose because if you don't do this critical step, now you're selling rate. And a lot of times like I'll talk to business owners and I'll do a deep dive on their credit and why their credits low, which usually it's utilizations. And by me knowing that stuff and how to talk to them, they'll want to give you their business because they know they're talking to an expert. 25:56 You know, versus someone saying if if you just battle rate like this one shop in Hollywood that I that I do some training for merchants are calling them with a spreadsheet of other offers, a spreadsheet. I've never seen this. I mean, people are shopping like professional level where they have 10 approvals on a spreadsheet. They send it to the guy. 26:12 They're giving me 32 weeks at 142. And how do you compete that? And then that's purely in in the price mode. Now, don't get me wrong, like if, if let's say you're battling somebody and you have to come down by all means. But if you have the conversation from a value standpoint, what is the, what is the purpose of the capital? 26:28 You'll you'll win a lot of times. 26:30 Speaker 1 Now I believe you and this and what you're saying is true because a long time ago when I was a broker, there were times I lost deals to other brokers and my deal was legitimately the best offer. And I think we're quick to say the merchant just didn't understand that my rate was better. The merchant knew the merchant, the merchant had a better rapport with the other broker. 26:48 The other broker asked better questions than I did. So when I lost it wasn't it's easy to just say the merchant didn't understand, you know what I mean? And I blame the merchant for not getting it. The problem was me and I recognized it was first first few times I blame the merchant, but after a while I recognized that it was me. 27:07 I'm like the merchant understood, And I still lost the. Yeah. How did that happen? It's because of all the other components. These people are. They're really drilling down into their business, talking their language. And I was just out there selling the rate, you know, thinking that was going to win, and it didn't. 27:22 So it's true that if you are, you know, if you're a young broker and you're thinking I got to sell this high rate, how am I going to do it? You know, it would be a lot easier if I had a lower rate. Sure it would, of course, you know, But you can go down lower forever. There are, there are companies out there that are selling legitimately 10% interest rates and stuff like that who are still losing to somebody else, right? 27:42 And so you got to keep that in mind. In fact, it was a guy who used to work for Lending Club. He did a podcast, I think it was like 2 weeks ago with a law firm or something, but I happened to catch it. And he said, Lending Club, this is Lending Club, they're a bank now. 27:59 They made a blunder. Their blunder was they looked at the entire MCA landscape and they figured we're just going to charge a lower rate and that's it. We'll be the lowest cost small business lender in the country, right, besides traditional banks. 28:16 And they went out and they sold the hell out of of their low rate. And they said they were still losing deals left and right and they couldn't understand it, right? And they're like, is it because the merchants don't understand, right? They just, they just assumed if we come in lower, no matter what, we leave with that, we always win. 28:36 And it didn't, it didn't work. This is lending home. They're a publicly traded company. All the best minds got together in a room and said rate wins and it didn't. So there's, there's almost like proof of that right there. If you're out here saying how am I going to compete with this? People are already beating those guys. 28:52 You know what I mean? It can be done for sure. 28:54 Speaker 2 Yeah, there's and just like you said, I mean when a Rep comes to me on a close and they'll say how do I, how should I pitch this approval? I can't hear I'll go, OK, what's the purpose for the capital if they can't tell me the purpose for the capital? You have a you, you don't have a chance on a close because that's how you use it. 29:09 You know, you're, you're that people forget that this is they're using this capital for an objective and and that's the only reason why I would make sense them to pay these higher rates. And I, I love MCA. I cut my teeth with with MCA is not on SBA. You know, people were telling me that SBA didn't exist and terminals didn't exist. 29:25 And then I ventured out and found it. So that's like another story. But I, I love selling MCA, especially when they work for the client and then they become a huge renewable. And just like you said, if, if someone has a rate that's low, someone will just come in lower than that, you know, so if you're, if you're battling by rate, you're kind of losing. 29:41 I like the idea of being the consultant. These people want to feel that they're talking to someone that's not desperate and that knows their business, you know, bless you inside and out. So like, that's, that's totally the way to win by being an expert, knowing their industry. I promise you, if you have two, two calls, one of them is saying they're a direct lender, they'll get you the lowest rate wholesale. 29:59 And the other one is, is doing a deep dive on their business. The deep drive on the business or win? 30:05 Speaker 1 Your book, The Game of Trust focuses on trying to gain the merchants trust, but it seems to me based on the amount of merchant fraud that happens out there, that it's a two way St. How much do we need to rely on trusting the merchant? 30:21 That what they're telling with you, what they're sharing with you is, is accurate for you to be able to do what you do, what you do. Is there a way to gauge their truthfulness? Is it about just asking the right questions to find out if they're telling you the truth? Because let's be honest, merchants send in bad ones, send in fake documents. 30:39 They'll tell you their credit is 800 when it's 400, right? They'll they'll mislead you because sometimes they're testing you because they want to hear what your best offer is, even though they know they can't get it. They'll say that I have 800 credit. What's your rate if I have 800 credit? And if you're put on the spot and you give them a number, now they've heard a number and then later on when you find out they have 400 credit and you're pitching something else that's saying what happened to this other number? 31:01 You know what I mean? It's like they they kind of conned you into hearing this number that they were never going to get, but they're going to hold it against you. But even even if sometimes sales is, hey, you know, you called the merchant. So maybe the burden is on you and the merchants can kind of just say whatever they want because like, well, you call you called me, right? 31:19 But trust still has to be a two way street. I mean, how do you how much weight is given to trusting the merchants in all of this? 31:28 Speaker 2 I would say more so than not that, you know, the quick fix to answer the first part about how when they say they've got 800 credit and they're sort of just kind of taking your temperature is to just really quickly come back with ranges, OK. Well, based on that type of credit and then profitability tax returns, you know, we have rates from as low as 10 1/2 interest and then we also have high risk class products. 31:46 What were you looking to do with the capital? So what I just did was I that was a frame where they said that and now I'm taking the frame back and then coming back with the question. I definitely like what you said. Like a lot of funders will do that. Like they'll play Kojak and they know the answer to the question and they'll ask them just to see if they're honest. And I know funders that will know they're a situation even before asking if the merchant lies. 32:05 They don't want to do business because of that. So, so I like to just give ranges for sure. And then I take back the, the controller conversation. And then, yeah, like you, you learn as being a broker, and I know you did too, that you don't really take things at face value, especially if it's like halfway through the month and you, you ask the question, you know, are there negative daily balances? 32:23 Have you taken any other fundings? And if they say to you, no, I just had too many deals die in underwriting to just go off their word where I'll say, OK, well, let's look at a transaction list, a month to date list and kind of just confirm everything before I'd say before sending. 32:37 Speaker 1 The merchant tells you, look, I've got 5 calls, three of them say they're a direct lender. They said don't work with brokers. Are you a broker? 32:45 Speaker 2 Yes, absolutely. 32:47 Speaker 1 Aren't your fees going to be higher? Why should I work with a broker? 32:50 Speaker 2 Well, I understand the concern, Sean. And you know, what people miss is that if you work with a, with a direct lender, straight up, they might hose you, you have no idea or they may not approve you. When you work with a broker, you know, my goal is to develop a relationship with you and I know which specific funders to go to, to get you the exact capital you need. 33:07 Now I'm going to go into it from my discovery, Sean, I know this this capital was for for payroll and you need it by tomorrow. I know which funder specializes, let's say in, you know, in restaurants so we can get this done. And I know where to go to without digging your credit. You know, if you go to to if you just go online and type in business funding and you apply a bunch of places, there's a very low barrier to entry. 33:28 So you're not really sure where your files going, who's hitting your credit, God forbid some type of fraud that's happening with me, I'm going to get you what you're exactly looking for and know where to go. So it depends if they're asking you if you're a broker versus direct lender, I feel like you've kind of lost already because then you're on your heels having to defend yourself. 33:46 But, but in the beginning of the call, if you go into discovery the right way and like ask the qualifying questions and do the deep dive on the business, it won't matter. They'll be like, oh, this guy knows my business. But if you're on your heels like that, another good thing is to detach. Like, you know what, this might not be a good fit for us. If you'd like to, you know, try your options at a direct lender, you know, be my guest. 34:04 But again, they're, they're, they're, they're not going to look out for your best interests. 34:08 Speaker 1 OK, You went right. 34:11 The Importance of Post-Funding Communication and Relationships You went right into the role play right away. Natural, right? Yeah. Yeah. How important are social signals? So a long time ago when people would say, how can I trust you, it was a matter of communicating that it was what you said. 34:30 And maybe to an extent it's still like that. But today we do have, you know, Trustpilot in Google reviews and maybe you have a LinkedIn account or or something. Do social signals or reviews online. Do these things come up? Are they important? What do you think? 34:45 Speaker 2 I think it, it definitely depends you will get it a percentage of very hesitant buyers that are, you know, that are looking online and stuff. And if you do have a, you know, LinkedIn, if you have Google reviews or trustpod, I think it can't hurt and it might, you know, get you the nudge that you need. But they should know by your conversation, you know, like they should know 100% that you're an expert and you know, this business, you funded this type of business 1000 times where there's, there's no question, you know, so I like the idea of developing it over the phone. 35:11 But definitely if you, if you, I have the option, like I remember 1 shop that I worked for, we did have like a really good Google My Business review. And so after every time we'd fund, we'd send them to do the review. And I'd say, look, you can check us out on Google. We have a five star review from 100 people. I think it definitely helps, but I'd be more focused on development, developing it, you know, on the conversation. 35:31 Speaker 1 For merchants that you've funded already, how often should you stay in touch just to just to monitor them? Because everyone worries that their merchant's going to go and talk to somebody else, get funded by somebody else. It's either going to be a stack that hurts you from being able to renew, or maybe you could have renewed it and somehow they ended up somewhere else. 35:54 How important is communication after the fact? 35:57 Speaker 2 You got the best questions. This is great. OK, I'll never forget one of my team leaders taught me this. He was telling me that whenever there's a holiday, he would send out a message to his renewal book and he would say, you know, happy holidays, you know, don't be bashful. If you ever need capital, reach out. And and it's stuck with me and I can show you examples of this one merchant where every holiday I would say that. 36:16 And she's like, OK, thanks for reaching out. I don't need it. I don't need it. Hey, by the way, happy Labor Day. You're up for renewal. You could be eligible for 50K Boom, let's do it. And it's all about staying in contact with them and, and, and being at the top of their inbox. You know, I would say if you have funded deals, reach out at the minimum once a month, depending on, you know, gauge your relationship, if you have a good relationship right away after the funding. 36:37 Hey, Sean, just, you know, just calling you back here to make sure things went well with the funding. Any issues with the payment, everything good? OK, great. I'll check back in with you in a week or so. And if you keep doing that, then whenever they do need capital, they'll they'll remember you. 36:48 Speaker 1 Do you need to give them any type of warning that they may get calls from competitors just to give them a heads up so they don't get confused? Because, look, there are some brokers out there maybe, maybe not the good actors that will try to kind of play themselves off as the company they're already working with. 37:06 You know, you talk about the merchant remembering you, but maybe they don't really remember your company name per SE. They remember the experience. And then someone else calls 29 days later, hasn't been that full month yet. You haven't checked in. And they said, hey, we're calling to do your renewal. 37:21 I just want to make sure everything's, you know, going well, we're here to give you additional funds. And they're like, oh, OK, you know, and they're like, they're in the middle of 10 things. So they're not thinking, is this the same company? Is this Sam? Yeah, maybe they work for Sam, but I'm, I'm busy right now. 37:38 Do you give them, would you give them any type of heads up? You may get called some other people but make sure it's me type of thing. 37:43 Speaker 2 I'll I'll literally show you examples of like where they send me the e-mail that say, hey, I'm a partner with Sam on your file. We're looking for SO. 37:50 Speaker 1 They they literally say. 37:51 Speaker 2 Literally say the name. Yeah yeah. Insane. And look, I, you know, I've, I've done things when I was first starting out and I didn't know any better. So, so I, I get it if you don't know the better way, but, but you're absolutely right. Yeah, it's, it's staying in contact with them and becoming a, a, you know, an advisor to them. You know, like my, the merchants that I work with, they're telling me about their families, about where they go to the gym. 38:09 They do CrossFit, you know, another business that they want to open. There's this one I'm thinking of in particular, a restaurant. And when you have those relationships, they don't feel, you know, ashamed or bashful to reach out to you, another merchant. Like I could literally show you text messages where she's sending me the BS approval and saying, Sam, is this real? 38:27 And I go look, you know, unfortunately it's not. And she she learned her lesson because she didn't ask me first one time. And they almost scammed her out of five grand. They just wanted to get the board a check to hit her account and pull an ACH. And ever since then, you know, it's it's wild. Yeah. And ever since then, she always confirms with me. 38:43 But I I would say it's having the relationship, not just looking at it like a one and done. You know, what are you looking to accomplish with the capital? I'm going to check back in with you in a week or two weeks or three weeks. How's business going? How are the holidays, current events like when Trump got elected, every merchant I was speaking to you that day was Can you believe it? 38:58 You know, thank God Trump got elected, right? And I did get the the Kamala Harris one who was like, no, I voted for for Harris. 39:04 Speaker 1 You're like, oh. 39:04 Speaker 2 Yeah, exactly. Yeah. But it's just having the relationship where people forget that this is a relationship based business, you know, people that are funding one and these are single reps that are doing 1 or $2,000,000 a month. That's the renewal book. You know, it's not all new business. 39:20 Like I would say 50 to 70% is your renewal book that you keep tabs with it and you always try to help. You know, one reminds me of this, that restaurant, this merchant, he had a low credit score and that's what was prohibiting him from getting conventional financing. And we dug a little bit deeper and his his utilizations were really high. 39:38 So I was like, you know, do you have a family member that has a good credit card? And his dad had a great limits, great credit score. So I said, have your dad add you as an authorized user on his account and your score will immediately bump up. And it brought a score to 720. And like within 30 days now the guy loves me. 39:53 You know, besides trying to help him with his other business ventures, it helps him get qualified for better things. 39:58 Speaker 1 OK. Wow, that's AI. Never even thought about it as a little a little trick there. That's a good one. Yeah. So you were talking earlier, this is like 20 minutes back, but you mentioned something about like, not like kind of slamming your competitors type thing. So a long time ago when I was a broker, one thing I did because I was very much self-taught and I wanted to hear what my competitors were saying in order for me to understand what they did. 40:22 And if I need to adjust, you know, and maybe they had good, good things I could borrow or maybe they were lying and I had no idea. But there happened to be a lead source we were using where we were basically competing at the same four companies in every single call, right? So it would kind of became repetition where I kept hearing the name so and so offered me this, so and so offered me that. 40:42 And I was always hearing the company name, but never the individual Rep. I didn't even think about it asking about the individual Rep, but somebody else or two people had gotten wise and basically found out who are the other reps that they were competing against. And then they decided to work that into their pitch. 40:58 And I had gotten killed on a few deals in a row. And I was like, I got to hear what these guys are saying, right? So I basically put in my information. I said, you know, Sean's deli right to the lead source. And they got blasted out. And I got it out the lead and all that stuff with the approval of the company I was working for. I said, this is an experiment. 41:14 I got to find out what's going on here. And two of them said you're going to get a call from Sean Murray. Just want to give you a heads up. He's a liar and he's a scam artist. So be just be very careful. You know, I just want to make sure that you knew, you know, it's just someone you need to be to be watchful for. 41:29 And they're like, oh, OK, thank you for letting me know. Now, when I would talk to the merchants, this never came up. But it was a seed in the back of their minds that I I didn't know I was fighting against, right? And I said, you know, wow, right. 41:46 You know, you know, it's look, maybe it's a dirty tactic and maybe it hurt them. Maybe it made them look bad by saying it, right? But it was happening and now I had no choice but to think about what can I do here? 42:01 You know, what's my strategy here? What would you what would you do in a situation like that first? 42:06 Speaker 2 Of all that, one is brutal. That's brutal. I would say one of my mentors always tells me is like when people are lying about you is like, listen, you keep lying about me, I'll keep telling the truth about you. And it's like, that's kind of how I would relate to it. I would go into a super detached frame where it's like if they're thinking that I would go into what you're looking to accomplish with the capital and then I would win the deal by being the expert. 42:31 I would talk about the things that I guarantee no one's talking about. No one's really doing a deep dive on the credit score utilizations, increase, late payments, charge vax collections. No one's really doing a deep dive on their financials. Are you profitable and you're an underwriter or you've done that, so you would know, you know, you probably tax returns as their owner compensation. 42:47 Are you on, How do your PN LS balance sheets look? When you speak like this, everything else becomes noise because you're actually understanding things in the business world. They might not know themselves, you know, like when I first started selling conventional financing, I would sell term loans and what would happen is I would send the the package to to the term loan person and I'm just like waiting in the wind. 43:06 I got no idea. I don't know anything to do with underwriting. I'm just waiting on this guy that I sent it to who's brokering it out to, to give me the answers that would that's what led me to learn the stuff myself. But so now by knowing this stuff and you educate the client, they're, they're going to know that you're the real deal, you know? 43:22 OK, well, well, so I know a lot of times there's a low barrier entrance, you know, Sean, and people might say specific things, but putting all that aside for a second, what were you originally looking to do with the capital? And then I go under their credit score. Oh, it's good. OK. How do you look on your tax returns? Have you paid yourself a salary, etcetera? When are you looking to do it by and by having this frame of like an authority they they you know, they really feel that you're trying to do them a best service. 43:45 Speaker 1 I think that it probably hurt the person saying it more than it hurt me in the end, but it was it was something, you know, it I'm like, I didn't realize I was competing against that, you know what I mean? And merchants go into the call think I heard about this guy, right? 44:01 But I would never I'd never bashed anyone else either. I'd say that's not a not a bad company. You know, I don't know why they would say that about me, but you know, not a bad company. And I don't know that I was as elegant and, you know, trying to convert that call in my favor, but it was definitely something, you know, to to think about for sure. 44:18 Speaker 2 Yeah, and you you probably won deals by just being like, you just said that so detached, like you probably weren't even aware of your tonality right there. You're like, oh, you know, they might be, you know, and we're like somebody else that would be so forced and like, oh, they're scumbags. Yeah. But like, you know, 11 key tip for this when you're battling someone else is I like to say, oh, when they say I already have an approval or have a broker, OK, you know, is he taking care of you? 44:39 You know, yes, OK. Why haven't you gone with it versus saying what is the approval that they have? Because now you're sort of on the offensive. So it's just like you, you literally just textbook or this super chill tonality relaxed. It came off detached. You weren't any, you know, I wasn't sensing pressure. And that stuff wins more than any script. 44:56 Speaker 1 OK, well. 44:57 Speaker 2 Thanks. 44:58 Speaker 1 Time to hit the phones. Yeah, right. You mentioned earlier I wrote this down somewhere. You mentioned holidays. You know holidays. Send the merchant a quick note, right? Be, you know, be kind of present. This was something I came up with on my own. 45:15 I have no idea if it has any place in today's world. But for every deal I funded and for deals that I came close to winning but lost, something I would do and the company I work for, it didn't tell me to do this and I did it on my own dime. Is that on the holidays, I would send them a holiday handwritten holiday card in the mail. 45:32 It might be a little old fashioned, but and I would actually try to think about what is their religion because I would connect with them even more Merry Christmas or Happy Hanukkah, or if I wasn't sure, a happy, happy New Year card, right? And I would handwrite it, even though it was a pain. And I'm doing a hundred of these things or whatever and I'm putting them in the mail and I'm paying for all of it. 45:51 It was a little thing I thought might, might give me an edge versus just random people on the phone. You know, you never know what they think about people on the phone. Not everyone has the best impression of phone salespeople, right? And so I felt like if they got, you know, a holiday card in the mail and, you know, Realtors do this stuff, you know, Realtors do it, stockbrokers used to do it. 46:10 So this industry is not really any that different. You know, we don't have to be just a voice behind the phone. So a little a little thing I used to do and maybe I got a couple of deals out of it that I otherwise would have lost, but I used to do I used to do the holiday cards. It's like my little my little nugget to try to win people over. 46:28 Speaker 2 I think that's genius. I think I mean that that little, the amount of effort that takes versus what it wins. I mean, now the person, whenever they do need capital or any advice that they'll remember, I think that's golden. 46:38 Speaker 1 The other thing I used to do and maybe maybe this is not a good idea because our time or brokers time is valuable is now look I didn't have any training when I was in sales. So a lot of it was trial and error. Teach myself, call my competitors and see what they say. 46:55 I had underwriting experience, so I didn't come in completely unknowledgeable. I knew my product, but I was not the best of sales and I, I had no base salary. I was Commission only. So every deal I had was super important to me, right? We're talking about, I care about 200 bucks. I care about 500 bucks. 47:11 We all hear about the the deals the broker made $10,000 and all that stuff. I was OK with taking a $500 here, $500 a year, couple 100 bucks. Every deal was very important to me. I didn't want to let any of them go. And one thing I I would do, I'm like, what can I do to be different? 47:28 You know what I mean? Like I'm competing, what can I do? If the merchant was in the tri-state area, you can tell me what you think I would say. Look, yeah, yeah, you know, I'll come by, I'll come by. You know what I mean. You don't want to send me your statements. You've already sent it out to three other companies. 47:46 Now, look, this is kind of before e-mail and stuff, so a little bit of a real hassle to send a document. I've already sent my documents out. It's even a hassle now for people. I've already emailed my documents to three other people. You know what I mean? And now they're going to be in more hands. And I'll say, don't even send me your documents. I'll come by. 48:01 I'll come by. I'll take a look. I'll give you, I'll give you a pre call. I'll give you a range. It's not going. I'm not the underwriter. A couple merchants took me up on it. OK, I'm like, all right, where am I driving to? Right? But I would, I would go. I visited a couple merchants and, you know, a guy did the prequel in person because I was desperate to get anything and I didn't want to lose. 48:23 If that could be the difference maker. Is it worth the time doing things like that or is that a waste of time? Should we be just more focusing on the phone? 48:30 Why Honesty and Learning from Losses Builds Business I would say, you know, like it reminds me of this story one time this the dialer went down at this office I was managing and it was down and they were waiting for it to fix. And I was like, let's just go to the avenue and just knock on doors and like go to business and we handed out Flyers. I think the same type of thing. It shows like your entrepreneurial spirit. 48:46 I think it's great if you have the time to do that. I know a lot of people that, you know, they have big deals where they've already funded them and they'll meet with them for dinner, They'll meet for them, they'll go to their house or go to their, their their business and, and see them. I think for the relationship is great. And I think that doing that in the beginning, it really shows how much of A, you know, how much like you're, you're willing to do to get the business. 49:06 Speaker 1 Yeah, Well, I mean, I was willing to do. I was willing to do anything, right. So I was really trying and I wanted to show the people I worked for. I'm like, I will do anything. I will do whatever it takes. You know, there's no sales training, but I'll figure. I'll figure it out. So that was one thing I threw in there with merchants. I'm like, you know, you're on the Upper East Side. I'm just going to come by. 49:21 Speaker 2 Dude, that's so great. That's like, no wonder you're so successful like that right there. 49:27 Speaker 1 Some merchants were just, you know, really surprised, but you know, it also it brought a face to this, you know, faceless world of people on the phone that someone was actually going to come. And also and if you're lying on the phone, it's going to be hard to face these people in person. Now you have to consider it. Some merchants might might be in the neighborhood and say, hey, look, I'd like to come by your office. 49:46 That happens. I'm in the neighborhood. Didn't you guys say you were on Long Island or something? Or, you know, is it OK if I come by? Like, if you've been lying to them this whole time about everything, about your office, where you are, you know, who you are or whatever, it might really work against you. You know what I mean? 50:01 When they come face to face with reality. So I had to make sure I was always telling the truth, you know, even if it didn't, even if it wasn't the best product or whatever, just give them the straight, the straight answer. Because I'm like, I might have to if I meet these people in person, I better match everything that I said. 50:17 It's just a a feeling that I had. 50:19 Speaker 2 Yeah, no. And that's like, that's like the mature way of thinking about it because like I, I talked to a lot of reps that are young and you know, I, I can only imagine being, I wasn't dialing when I was 20. I was in other businesses, I was doing sales, I was in person like in an office belly to belly sales. So I, I know it's tough, but like, you know, your, your renewal book and your book of business. 50:36 So like people see that the shiny object of let me just lie and I can get this 100K deal, this 100K deal, this 100K deal versus the guy that's being honest, that knows his business. Maybe they're not pulling in all those files. There may be funding, let's say half or even a quarter, but as the months go on, every single month, the guy that lies starts at 0. 50:54 No one wants to do business with him because they, they lied, you know, and it put him in a bad position. Meanwhile, the guy that's sort of just been chugging along 25K deals, 50K deals, 100K deals, but being honest, his book of business grows. So now in six months or a year, the guy that's been building the book by being honest can literally stop dialing and just follow up with like 10 or 20 people every month and make a killing versus the guy that lied is constantly on that that hamster wheel. 51:19 Speaker 1 Yeah, that's true. And I think renewal books are under under appreciated for people who are newer because, you know, it's a lot of times we're told this could be a 7 figure opportunity, you know what I mean? And you're going to get a residual income and it's going to build up over time. 51:37 And that patience and waiting till you get to the book is hard, a hard pill for a lot of people to swallow. And so, but you actually have to put in the work and that type of thing does happen, right? You do. You will build a renewal book and that will happen over time if you're doing it right and you don't just go for the short term. 51:54 Speaker 2 Absolutely, yeah, yeah. And by, you know, it might be just like I've taken like, OK, there was a guy that came to me. He was in a file. He was he he defaulted on a funder and he's looking for like a super high risk funding. OK, nobody wanted it. And he was also looking for a reverse the next time. And I did both these fundings for him. 52:11 Oh, I'm sorry. I got him the the approval. He had a 0 balance letter with the funder. Got him a 25 K approval. Killed in final underwriting. OK so I I didn't win the deal. Someone a new funder on the block funded him because they wanted to put their name out. And then like two months later he comes in looking for reverse. 52:26 And I mean this guy is stacked to the gills. Anyways get get him a reverse by down selling. Three months later refi the reverse with 12 points. This is like a 300K reverse and then, you know, kept continue on with different fundings and then got him to do a 215K and then and then working to get him something conventional. 52:43 So it goes to show like if you do the right thing by them, that the deals just grow. Even if they're small, they they end up growing if it if it's helping the business owner and you're being honest, like the Sky's the limit. 52:54 Speaker 1 Do you ever ask merchants or do you think it's advisable to to ask merchants if you lost the deal, maybe why you lost the deal? You might have an idea of why you lost it if you asked the right questions. But you know, back when I was doing it, I lost sometimes, well, I lost a good amount of time. 53:10 And when I lost in the beginning, I was just bitter about it. And eventually I'm like, no, no, no, no, no, no. I got to ask them why I lost. What can I change? What can I do different? So now all of them are going to talk to you because sometimes after they've gotten their funding and they they've talked to maybe four or five of you, they're not going to give you any more time after the fact, right? 53:29 They're just going to say, I got my funding, please. The rest of you just go away, right? And that's going to happen sometimes, at least I believe it probably happens. But for those that will talk to you, do you feel like it can be valuable after the fact? Like, how did this, you know, how did we not get your business here? 53:45 What went wrong? 53:46 Speaker 2 I think that I think that's such a great question because that's like the introspective nature of, of sales in this type of, you know, career is like those are the ways that it now it win you 10 deals in in the future. Like there's situations where the merchant might ask me something, I don't know the answer and like I'm frozen and I come off immediately, come off like a rookie and maybe I lose a deal because of that. 54:05 Now I, I, I go to my desk and I have all the objections and I do not leave until I have the answers for the next 1. And that's how I win deals in the future. Like I'm thinking of examples that you know, why I lost deal. OK, so one deal, I was battling somebody else. The merchant needed the money and we needed his EIN letter. 54:22 OK. And he didn't have a copy. And this other funder, if I remember correctly, was being very aggressive and didn't need the EIN letter. And, and through this whole process, I learned there's a way that you can order an EIN letter same day from the IRS, faxed to the business owner same day, like within an hour faxed. 54:39 Yeah. And like, you can still do this today and like, but I would never have known that by by being in that situation. So I tell brokers and reps all the time, like if there's some specific thing going on, it's like a blessing because now you know how to deal with it, you know on the next one. 54:54 Mastering Calmness and the Power of Silence in Sales Yeah, people, that's that's a good, that's good advice there. One thing, this is from an era that's now gone, but people would do couriers, they would order a Courier to pick up the contract. If they were afraid that the merchant wasn't going to send it, they would say, look, I'll send a Courier to come pick it up from you. 55:14 I just thought that was like, you know, like how do you even know where that Courier is? You know what I mean? You just have random couriers all across the country that will pick up contracts for you. Whatever. How much does that cost? Right? And what if they don't come through just in random couriers? But yeah, that's it's funny that the IRS will fax you something, because that sounds like very government faxing. 55:35 Speaker 2 Yeah, yeah, yeah, yeah. So I mean, the the play is like you have it, they fax it to the business owner. You're basically setting up this appointment for them. You're not going into too much detail, but you're setting up an appointment to get it. And then they call the business owner and verify it to them and stuff and then they'll fax it to them. But like little things like that or like the Courier, I know back in the day people used to fax, you know, the bank statements to get approved way back in the day, right? 55:56 Speaker 1 Yes. So, you know, and I don't want to talk too much about what things are like back in the day, right? Because for someone who's in it now, it just sounds like, OK, you know, Yeah, you took, like, a Stagecoach to work. But it was really difficult. Like when you would tell merchants to send you their statements, often times they didn't have a fax machine. 56:13 They would have to drive to a Kinko's and fax them. And then you get them. And then you find out they faxed them upside down and they got messed up in the printer. And I'd say, I know you left Kinkos in your back, but you faxed them upside down. It's all blank pages. I needed to go back. And they're paying a dollar for a page, right? And it's a whole big thing. 56:28 And the pressure, you're talking about keeping the merchants calm, right? This was hard to do when they're driving 45 minutes to send you a fax and you're like, Oh my, you know, like, you know, you're trying to remain calm because you don't know if they're going to do it. 56:46 But being calm, it sounds like an important part of a sales call. Just being being calm on the phone, not being overly anxious, right? 56:56 Speaker 2 Yeah. Oh, yeah, absolutely. Because people can just sense, they can feel the emotion. And, and one of the things one of my old partners used to tell me to do is to imagine you had the money that you want to make in your bank account while you're dialing. And it's like a weird kind of like, you know, mental flip. 57:11 But I used to take a piece of paper and I'd write on it a number and I put it by the computer. And when I'm dialing, I would think I have that in my bank account. And it just all the pressure came off because all the pressure stems from you needing to make money. And we know it's Commission only and you know, you might need to, you might have a family, you might need to pay bills. 57:28 And that the the catch 22 is you'll be hungrier to work harder. But if you're not in control of how you sound, your tonality, you know you'll you'll come off desperate. They can smell the desperation. You know, it's like, it's like my dad taught me in the car days. It's called taking the candy away where if you're really battling someone tooth and nail, you go, maybe this isn't a good fit. 57:47 And every time you pull back, like I've never had someone not lean in when I, when I say that they go, Oh no, no, no, I want to do something. But you know, XYZ or whatever it is. And little things like that can really move the sale forward and make you come off calm. You know, a lot of times people don't know the product and they think on their feet and just BS and that the merchant can sense that, you know, when someone over explains, over justifies versus like a professional closer. 58:11 Like imagine if money wasn't a concern, you wouldn't be justifying everything you said. You know, you go, Oh yeah, the payback. The payback is 74995 on 50K and then you'd be quiet versus a rookie will go yeah the payback is 74995 but I can throw an early prepays but if you pay it off soon this and but it's the best way because XYZ whereas the calm person doesn't have to over explain and then naturally the business owner will gravitate to that person. 58:37 Speaker 1 So you don't necessarily need to throw in your butts. Do you feel like it right? Is that what you're saying? Yes. Do you feel like if you put it in your butts, you're almost revealing that like, hey, I don't feel as confident in what I just told you. You're offer is X but if you do this as if like wait a minute, should I be suspicious about the offer? 58:55 If there's, you need to put a butt in there. 58:57 Speaker 2 Yeah, yeah, exactly. It shows. It shows like the like not having the confidence in the approval. You know, like I've tons of my videos that blew up. We're talking about whoever speaks first loses again. This is something my dad taught me from the car business, you know, So like, if you give the approval and you can't sit through that awkward silence to get the true objection, you're going to constantly be over analyzing and over justifying and you sound like a rookie. 59:21 Speaker 1 Yeah, there was one video I was watching of you, it might have been recent, where the merchant actually said, are you there? Because you, you literally put them in a position, you know where who's going to talk first. You know what I mean? You're like, I'll just wait them out. He's like, are you still there? And you're like, yeah, I'm still here. 59:36 Speaker 2 Yeah, yeah. You know, a lot of people are focused on the marketing side, whereas they're not really focused on their team and the training, whether it be not even just myself, but just giving the time to your people. Like I just spoke to, I don't want to call them out, but I had conversations recently with shop owners where they're like, you know, I don't think sales is a big deal. 59:56 Sales training. I give them the, you know, I give them the leads and this and that. And it's like, this is a sales based business and, and somebody will win. Just like your, your, your perfect example. I might steal that example about Lending Club, where it's not just about the rate, it's about the relationship. 1:00:09 Speaker 1 Publicly traded company got killed. 1:00:10 Speaker 2 Insane. And that just goes to show that it's not that people want to deal with somebody and work with someone that they they, you know, they have their best interest. So like this is all classic sales, you know, like I've had deals where, where the objection to let's say the daily payment or the weekly payment, like, like if I didn't have the rebuttals to that, I would have lost deals. 1:00:30 And now knowing what I know, if the merchant says to me, I'm not taking a weekly, I'm only taking a monthly. I, I get excited when I hear that because I know I've been down this road so many times, you know, or like when let's say they're pitching the approval and the merchant says they're going to go with it. 90% of reps have this problem where they'll say, I give them the approval and then the merchant goes to me. 1:00:50 What do I do, what I do differently? And we didn't smoke out the real objections first. And I mean, you know, this where you're saying to them like, OK, so if I do get you the capital today, Are you ready to move forward now? I use the power of silence and, and just be quiet as long as it takes, you know, and it's awkward at first, but once you do it, it's a tool and it's not awkward at all. 1:01:09 And, and they go, well, I like it, but the daily payments too high, I like, but the payback is too high. Now whatever they say to you, now you've got the real objection. And now you can hash that out on the phone versus they just said yes to you and hung up and now they never speak to you again. 1:01:26 Speaker 1 So you mentioned that not every shop owner you know believes sales is that important, but it obviously is that important. You you bolt it down to a science, you give training on on how to do it. And recently I was asked kind of off the cuff this is that our event in Miami, what is one thing I, I hope funders recognize about their brokers or something, something of that nature. 1:01:49 And I said that the funders should, should respect their brokers at the very least as they're equal. And we tend to look at this industry, some people tend to look at the industry as sort of like a hierarchy because like broker, funder, investor, right? 1:02:05 And so sometimes brokers will say that their funders are direct not to mislead, but because there's a sort of certain insecurity attached to I'm just a broker, you know what I mean? They're insecure. And I'm actually a direct, I'm actually a direct lender. 1:02:21 But I think that's that's wrong to think that way. And that's because there is no hierarchy. You know, it may be a hierarchy in public perception and ego that people think that way. You know, I'm just, I'm just a broker or something. But in fact, the brokers are the ones driving the rest of the industry, right? 1:02:42 So, and I, I said this kind of off the cuff, it was with Daniel and Nevsky on his little podcast. I said, you know, you got to take the hierarchy and you got to, you got to flip it, you know, horizontally or whatever. And it's really the, you know, broker funder, syndicated, We're all, we're all in the same level. 1:02:58 And I think it's important for brokers to carry themselves with that sense of importance that they are essentially just as, if not more important. Let's just say we're equal in importance. 1:03:10 Recognizing the Broker's Indispensable Value in the Industry The value they bring, none of the rest would exist without what they do. I mentioned earlier that I was an underwriter when I was young and I was the director of underwriting. I was young, in my twenties, 24 years old, director of underwriting, you know, mom's so proud. 1:03:27 He's the director of a finance company in New York. Unbelievable. Goes and tells everybody, people who know me, he's the director, right? And then I gave it all up intentionally. How did I, how did I go from that to becoming a sales Rep? That's the term we used back then. Rep. 1:03:42 I was just a Rep on the phone. I was not running a sales floor. I gave it up to be Commission only Rep. How did that happen? First of all, I have the ability to take ego out of anything, and everyone else needs to as well, right? It was about what was best for me, and I don't care what anyone thinks about me. 1:04:00 I saw that as the biggest opportunity in the industry because that's where the deals came from. As an underwriter, I was just underwriting other people's deals. They were doing all the hard work. Underwriting is hard, but I wasn't the hardest part, right? 1:04:17 You can drill it down to a science. You can get your analyst in and your algorithms and your people in San Francisco who said, you know, we have an API to do all this stuff. But at the end of the day, right, you're not going to have any of that stuff to use if you don't have a deal. And it all starts with talking to the merchant. 1:04:35 And that's where I wanted to be if I was going to be for me, being important or being valuable or having opportunity was being involved in the hardest part of the business and having the opportunity to earn what I put into it. 1:04:51 So when I was an underwriter with a salary position, a little bonus, got a salary increase, it was nice, not going to not going to lie, but that's all it was. And there were people who were making triple what I was making and their title was, you know, account executive. 1:05:07 They didn't even have a title. There's No title guy on the phone making more than I was by multiples, right? And I said, and the war stories they had, you know what I mean, the things they had to go through. And I said, you know, they're applying things that I didn't have to apply as an underwriter. 1:05:23 And they were learning life skills that you just wouldn't get anywhere else. Talking to people. Sales is the glue of everything, right? You can sell in one space to kind of you learn a skill that you can use anywhere for life. And so, you know, for me, I guess that was a big part was the surrendering ego and going into sales and being a broker. 1:05:42 And I think that other brokers should recognize this about them. There isn't necessarily a stepping stone where one day you have to become a direct lender. Some of them hold that out as like the next step, one day I'm going to be a direct lender, right? 1:05:57 Or I'm just going to be an investor in all this. The value comes from being on the front lines, talking to the merchant. That's the most important part because none of the rest of it exists without you. And it doesn't matter what your job title is. What brokers do is the most important, most valuable part of the whole thing. 1:06:18 That's just, that's just my feeling. So when you go out and you train these people and you say there's, you know, there's a way to do it, a right way to do it and a wrong way to do it. Thank you for providing this service Because a lot of people are doing the data science on, you know, the whether or not something will default and all that stuff and all that stuff is needed. 1:06:36 But there's also a right and wrong way to do things. Just in sales. There has to be. And some people will say it's just, you know, you either got it or you don't sink or swim and you'll figure it out. If it doesn't work out, we'll get somebody new. But it seems to me that there's a real science to making this work. 1:06:54 And if you put in the time and the effort and you you apply the right strategies, you can actually improve your your throughput. Is that right? 1:07:01 Speaker 2 Oh, absolutely. And it's, it's a, it's a learnable skill. You know, it's, it's an absolutely trainable, learnable skill. And one of the things you said is, and it's so true that it's brokers might feel a low status when dialing. And I look at, I try to train them the opposite that, you know, you guys have access to capital unprecedented. 1:07:18 You can pick up the phone and you can put $1,000,000 in someone's account like within a couple hours. So like that should raise your, you know, your status and if the brokers only knew how they're viewed by everybody else. I mean, the brokers, like you said, are the lifeblood, are the lifeblood. If you told a company that one, you know, 1 aspect of their business wasn't going to show up today and it was the brokers, it would be, it would be all hella break loose because they understand that the guys on the phones on the front lines are the ones that that are, that are bringing the deals in. 1:07:47 You know, whether you have good leads or bad leads, you know, you can have bad leads, but really good brokers and sales, they're going to bring in deals. And the same with, you know, if they're good. And you know, if you're, if you're in this day and age, I feel like if you're losing deals to very common objections like the rate is too high, I don't want a daily payment. 1:08:03 You know, someone has a better approval, the rate's better elsewhere. It's like you're, you're doing a disservice to them by not getting them trained, you know, because as you know, you know, even if it's Commission only shops might be spending four, five, $10,000 per seat just to have someone employed there, you know, so it's like protecting their investment. 1:08:20 Also it's hedging their bets that look if we even get one deal to be 1 because the the the broker had a sales ability it it'll pay off in space. 1:08:29 The Evolution of Cold Calling and Sales Technology Is cold calling still alive? 1:08:32 Speaker 2 Absolutely, yes, 100% yeah. There's there's, you know, every single month there's a new thing Apple just released the, the call blocker and the, the transference thing where it would, it finds out who you are first. But there's, there's always, you know, cold calling and, and bringing a business like that, it might go more towards, let's say SMS and then maybe e-mail or, or your really good tech. 1:08:52 Like some of these shops invest so heavily in their technology where they have these dialers, you know, they're constantly scrubbing the phone numbers to make sure they're not spam, constantly getting the best tech to, to e-mail and, and leave voicemails, whatever it is. So you just kind of have to adapt the days like when I was dialing, I just had a, a spreadsheet and I was using my cell phone. 1:09:10 And then like 2 hours later I found out that's not the way to go. I'm getting blocked on every call. So now you just it's just, you know, adaptation, getting the best dialers, the best tech, getting, you know, text blasting services that are that are that aren't going to sue you really following strictly the the TCPA violations where if someone says to you do not call that you actually take them off the list versus trying to, you know, get them back again. 1:09:32 But but cold calling, Yeah, for sure. 1:09:35 Speaker 1 I this isn't the best person to learn from, but Jordan Belfort Wolf of Wall Street, he was actually asked recently. He was, he was asked about his cold calling. It was cold calling dead. And he said not for B to B OK Yeah. So it was interesting to hear that perspective. 1:09:51 You know, maybe if you're like you're selling stocks or over the phone or vacuum cleaners over the phone, you're selling to a consumer. He's like that kind of stuff is, you know, maybe a little bit more difficult than it used to be. And he would say maybe that part of it is gone, but he's like not, not B to B. So it was interesting to hear that perspective, you know, for someone who used to sell on the phone all the time. 1:10:12 And it sort of has a reputation in the world that B to B is not dead. You know, so you said there's all types of technologies out there to try to help facilitate this is does that mean if you own an ISO shop, you need to be, you need to be paying attention to the latest technologies that I assume you can't just say you can't be blind to it? 1:10:34 This is like an area of focus. 1:10:37 Speaker 2 I would say so. And I do see a pattern with it with the top guys that they're, they're constantly doing that. And I don't necessarily mean like Willy nilly just throwing money at stuff, but I mean like doing deep dives on on, on what is the new latest and greatest stuff. And you know, some shops I go to, it's crazy the stuff they have, like they have these phones specifically built to their CRM where the merchants are inbound calling this to me because when I was, I'd never even gotten close to that. 1:11:01 I've gotten close to like maybe getting a text message where they say, OK, what are your rates? And then they ghost you, whatever it is. So having the ability to have deals incoming is like, it's like you're a wizard. And so I've, I've just started seeing that in shops where they're really spending money. And the, the one pattern and caveat I see out of all these guys is they're not afraid to spend money. 1:11:22 You know, it's just like any sales, you know, this was sales like the, it's like the really the most, the, the most least expensive option. They'll grind you up the most and the people that are buying the high ticket, they'll just agree and they'll be the easiest clients to work with. So it's like the same for shop owners. If they're kind of, if they understand that they're going to have to spend to, to try, let's say self generated Google ads or meta ads, or you know, pay more for a new dialer. 1:11:46 Or they might have to go through a shift where their, their sales come down because they're implementing a new CRM. Because you see that a lot. Like one shop I work with, they implemented a new CRM company and their sales went down for like a month and a half. Because whenever you implement new tech, it's kind of things get slow and kind of get muddy. 1:12:02 But like the ones that are really crushing it, they, they, they know it's about, you know, they know it's about putting money out there, trying new things, trying new tech and it's, it really pays off. 1:12:10 Speaker 1 What about for broker buys leads Nothing closes. Broker called the leads company. Your leads suck when the company says the brokers can't close. How do you find out who's right, Who's wrong? 1:12:25 Do the leads suck or do the brokers? 1:12:27 Speaker 2 Suck. The leads are weak. 1:12:29 Speaker 1 Right. 1:12:31 Speaker 2 So it's, it's so funny you say that because it's like people don't know. They have no idea if the leads are good or bad. They think that they're bad. Like I've seen so many of the complaints to the top data companies. And if you look under the hood, it's like, no, it was the broker that made the mistake. Like this happens all the time where someone will buy leads. 1:12:47 They don't know the business. They'll sign up with all the high risk funders. So they'll have 20 funders, but they're all high risk that will never go a day over 100 days and all their deals are 1499. And so let's say they buy leads. They've got a guy that has an approval for 80K for six months and they're like, oh great, this is a great lead and they lose it to somebody else. 1:13:06 The reason being is that the other competitor has the a paper funders that this person needed this business owner. So they're losing deals just off their funder list, you know, so. 1:13:16 Speaker 1 I They were blaming the leads in part because they just had the wrong funders. 1:13:20 Speaker 2 Saying those leads. 1:13:21 Speaker 1 Suck, but it turns out they don't even have the right funding outlets for them. 1:13:24 Speaker 2 It's one of the most classic things I see because besides the sales training, I get a lot of people that are new to the business, they want to get in the business. They ask how do you do it? And the first thing I'll say is what does your funder list look like? And they'll show me a spreadsheet and it's literal just C&D paper, which nothing wrong with high risk. That's like a majority of the business. 1:13:41 But if you're sending, you know, a paper files, let's say you're sending a, a medical company with an 800 credit score, profitable on tax returns, they do 500 KA month, you're sending them to a high risk funder. You might get a huge dollar amount, but the term would be no longer than 100 days, 120 days versus the shop that has the better relationships, the funders, they'll send them a two year, you know, approval or 18 month deal with biweekly payments, you know, because they're they're so good and that's kind of where they lose the deal. 1:14:07 There's so many areas where it's like usually to get to the bottom of it, It's it. That's usually the crux of it. 1:14:13 Speaker 1 So you encounter that when you visit a shop, you're like, you're like, hey, let me see your funder list because you're saying your throughput rate is is maybe lower than you were than where you want it to be. But the reason is because you have no outlet for your your A paper or your BPB paper merchants. 1:14:29 Speaker 2 Yeah, a lot of the time the ones that are on that make it to having like a brick and mortar, they usually have that figured out. It's a lot of the ones that are starting online and my heart goes out to them because they, you know, no one will tell them this, you know, like the it's not in the best interest of us somebody to say, oh, you don't have the right funders because the the right funders, you know, they they need let's say referrals, they need to see time in business. 1:14:51 So, so a lot of new people in the industry, they get around this by super brokering, but new people in the industry, they just can't get signed on with the a paper. And if I'm selling them something, what I want to tell them that they're not going to work. No, I, I, I want to sell it to them, you know, So whether, whether that be anything tech lead CRMS. 1:15:07 So so yeah, that's that's definitely a big one. 1:15:11 Speaker 1 So over time, funders have tried to essentially eradicate brokers. 1:15:15 Funders' Increasing Dependence on Skilled Brokers They've said if we could, we'd rather just all be direct and not have brokers in the picture. And that's, that was the sentiment for a long time. But what has happened over time is that they've actually become more dependent on brokers, not less dependent. 1:15:31 Now we're not talking about the fintechs, right? Your Stripe capital and your Square loans and your PayPal working capital, sure, they're, they're direct, right? We're talking about just maybe a straight up MCA funder who 5-10 years ago was like, if we could, we cut out brokers and we, we just do it ourselves. 1:15:47 But it turns out it's really, really, really difficult to do that. And they found that they were just better at pricing deals. And turns out sales has some type of magic formula to it. And some of it I think stemmed from what we were talking about before, was that they had one, essentially one product to offer. 1:16:07 And so they're hiring an internal sales floor. It's, it's like, not like you're going to get rid of salespeople. You were still going to have them. So they had them, it's in their office. And then these people were literally offering a single product with no way to no way to do bounce anything off, not even the leverage. 1:16:24 They can't even go to, you know, to other companies say this guy's giving me this, I just need a bump up of 5K. There's no one else. It's just that one company. So here they are telling the merchant we're direct lenders, blah, blah, blah, blah, blah. Your offer is X. You know, they didn't shop them around to get them the best offer. 1:16:41 It's just X. And So what has happened over time is that funders have become more dependent brokers. And the only reason I'm bringing this up is that I think for a new person starting out, it's 20262026 right now, right? So you may be coming in thinking, am I coming in at the end of something, right. 1:16:59 People talk about the glory days is sales is different, the phone is different, the call transaction is different. But what has actually happened is that brokers are more important than than they used to be. So you're kind of getting in at a really good time versus coming in late in the game. You're coming in with the industry is established, Most merchants are aware of this product. 1:17:21 They probably get lots of calls already. So you're not finding yourself having to explain that there is money available from a non bank. Assume merchants are probably past that part of it, right, where they know they can get funds outside of a bank. 1:17:36 So you kind of have that that part all figured out and now it's just about becoming the best at what you do as a broker coming in at a great time. There's even, we used to say, you know, there's no regulations. Now there's some regulation that's actually good. You can tell you can use that as a selling point, I assume to a merchant. 1:17:53 Hey, look, this is a somewhat regulated business, you know what I mean? I have to do, I have to do right by you, right? So I'm going to go out and get you the best deal. This industry has been around 2526, however many years, right? So almost like a point of authority to speak from. So if I had a choice, you know, Strawberry from D Bank, if I could have started as a broker today, you know, would I do it 100%? 1:18:16 I would if I wasn't doing D Bank. And I don't mean this just to feed into I would totally be a broker more than I would be a funder, more than I would just be a syndicate. I'm not really the passive type. You know, I'll put some money out in the street, you know, whatever and let it all take care of itself. No, I would rather be a broker. 1:18:32 The amount of tools available to brokers now versus back then, tremendous, you know, the amount of trainings and and stuff that are out there. Oh, you know, I wish, I wish I had all that stuff. What a great time to learn, what a great time to, to try it out. You know, it's a lot of the unknowns have been taken out of the process. 1:18:50 There is some regulation now. It's been recognized by courts and States and government. We all know it's here. Merchants are aware of it and it's probably just their job to win the deal or communicate their value. So just just kind of giving you my opinion that now is a great time from my perspective to be a broker 2026 and beyond. 1:19:12 We hear about things like AI and all that other stuff, and there's definitely a place for it. But what I've seen so far is that brokers have become more important, not less important. Have you heard anything in regards to how important brokers are to the funders they work with? 1:19:27 Because if you go online, you see brokers are like, hey, we just got this gift from XYZ company or we were taken out to dinner. It seems like the brokers are are pretty important. 1:19:37 Speaker 2 Yeah, and I think it's great that you're, you're, you're shining a light on that. You know, like all the shops that I work with funders every single day are paying for their lunch. They're they're sending them this. They come and visit them when they come to your shows. You know, the shop, one of the shops I work with, some funders stop by the office, you know, for your convention. They were in town. 1:19:53 And like you said, they're, they're seeing that they're the lifeblood, you know, of the industry and it, it cuts both ways. Like I remember hearing funders talking about how they want to get into brokering and you would think it, you know, it would be the opposite. But the upside is just is huge. And like you said that the technology that's available today, when I was dialing, you know, there was no CRMS, there was RingCentral, you know, and I mean, that was like a luxury. 1:20:15 A lot of people are still kind of dialing off of a spreadsheet these days, but to have the technology where? You know that the, the file, the lead comes in, they responded to an ad and you have their, you know, their information from you, not, not from, let's say a back door, but from yourself. It's next level. 1:20:31 And you know, one thing about the back doors is that I think it kind of corrected the market in a way, like a knock off effect unknowingly was that it made it more competitive and made it better for the business owner. Because before, like they might be working just like we're talking about with one guy that is trying to fit a, you know, a square peg in a, in a round in a round hole. 1:20:49 And now they know that there's other options, other products, and like people that were going to get bamboozled or got a bad product ended up getting something better because of that. 1:20:58 Speaker 1 Yeah. I mean, yeah, right. They have more options that maybe they didn't invite, you know, but they now they have more awareness of all the things that are out there. And so, yeah, knock off of that. Interesting to think that they could have had it, could have had a secondary positive impact, but also probably upped the game of some of these brokers, right, Because you have to, you're competing. 1:21:17 You're just competing. Yeah, you're just competing. Yeah. It's not like am I competing or, you know, I'm just competing. I'm just competing. And so kind of custom teller, what you say around the reality that somehow or another merchants may encounter another voice, whether it's illegitimate means or illegitimate means that there are other voices out there. 1:21:36 It's just you're not alone in this, in this, in this world, right. So you don't have total merchant control. You can try to convince them, but I think your videos just say, can I have exclusivity for like 2 1/2 hours or three hours or something like that. 1:21:52 Does that tactic work? If you have yeah, you ask for a commitment from the merchant and you say, can I have some exclusivity from you? Does that type of thing work? 1:22:01 How to Qualify Merchant Urgency and Avoid Deal Loss So I learned that from one of my old business partners and and yes, the answer is yes, but it's all in the tone and delivery. See, because at first blush, when you hear that, and you might not, and let's say no about the industry, you might think that sounds desperate. You know, you're asking them for that. So you're like, why would you ask that? And the answer is that you want to frame it as, look, my time is very valuable and I know yours as well as a business owner, I can't waste time going to underwriting at these funders and get you the best approval to, you know, to, to get you the expansion you need when there's ten other submissions coming in. 1:22:31 So I don't want to waste your time. Are you able to, to work with me here for the next 2-3 hours to get you something good? And when you frame it like that, where it's like you're trying to not waste your time versus 99% of other reps where they're just on their knees, you know, they're just like, I'll do anything you want, I'll get you this, I'll get you this. Just get the app in, it definitely can keep control. 1:22:49 Speaker 1 So part of that was your time is valuable, right? So I was sitting with a broker, this had to be like 2 years ago and he was on a dialer. He's making like 1000 calls a day and he had a real big lead and the merchant didn't send the app. 1:23:08 The call was so good, but the merchant didn't send the app. And when he tried to call him for whatever reason, he couldn't get in touch with the guy after the fact. And I'm like, get his phone number, go to his website, you know, is there another number or anything? Nah, you know, like, you know, why should I waste my time? 1:23:23 My time is valuable. He's not interested. He's obviously avoiding me. I don't need to talk to him now. I'm not sure if if maybe that was the right approach. I don't know when you draw the line where you're really chasing the merchant who's never going to, who's never going to do anything, because you could chase merchants forever, I guess. 1:23:43 Right. But he had he had drawn a line of a sand and he was no longer thinking about it. Is there a line in like, where do you draw a line in the sand and say, I'm not going to chase this lead anymore? It's pretty clear he doesn't want to work with me now. 1:23:55 Speaker 2 That's a great question. I, I would say that, you know, for me personally, I've gotten so many licks in to this certain like a set point where I know it's not worth my time. And I actually have a video about this where there's someone that's a professional shopper. And before I went through the whole bamboozle of getting his statements, getting his application, I asked him a couple quick qualifying questions on his revenue, his most recent fundings. 1:24:15 And I straight up offered him. I just did a mini underwrite in my head and I saw it like I think last month, let's say he took like a 60 K 32 week deal. So I said, OK, if revenue is consistent, I might be able to get you somewhere between 50 and maybe 60 for around the same term. 1:24:30 That's best case scenario, Sir, 3030 weeks. If I'm able to get you that, could that work? And, and he said no. And he was, you know, he, he was looking for something different. And I didn't waste my time with it because I know what happened. But the, the caveat is most people will just take the order of the person and they, they won't ask critical questions like in my scripts that I train, I go when are you looking to accomplish the expansion or the payroll? 1:24:51 And by that question, you get the urgency. So many times people that are inexperienced, and I know this from doing it, they'll, they'll get the application, they'll go to the funders or get the best prime, you know, a paper approval. They save the business owner. This is what I have for you, XYZ. And they go, OK, well, I don't need to do it till next month anyway, so I'll let you know. 1:25:08 Boom. And they're crushed. And it's such an easy fix. Hey, Sean, by the way, when were you looking to accomplish this? Oh, oh, next month. OK, now I can rebuttal that objection. But at least I know not to be running around like crazy. 1:25:20 Speaker 1 Because then you look bad to the funding company, especially if you if you pulled strings to get that offer, right? You said, I promise this is the last time, just one exception, right? You get it and then you go to the merchant. He doesn't need the money. 1:25:35 Speaker 2 Yeah, yeah, yeah. But like, you know what, these are the things that we were just talking about where like where these little mishaps will train you now on the next one. Now you will never forget to ask when are you looking to do the the funding? 1:25:46 Speaker 1 Yeah, yeah. Because that mean if you make that blunder, right, and you run around and you get the best offer and then then your closing rate with that funder goes down, probably less likely to be attentive to you if you've created maybe urgency with them. And then you, they're going to ask you, you know, your close rate is low with us, right? 1:26:05 And then they're going to wonder why. And it's because you didn't time it out to find out when the merchant actually needs the money. 1:26:13 Speaker 2 So this help, I mean it really helps being more educated and sales trading in turn helps funders, you know, they don't get their time wasted. You know, imagine the amount, I mean you could probably shave off an hour of at least an hours of, of an underwriter's job every day on files that like have over 5 or 6 negative days, don't meet the revenue requirements or restricted industries, you know, So it really helps everybody. 1:26:36 Speaker 1 And it could really come to it could backfire on you if the merchant doesn't need the money for let's say a month or so and you've created all this urgency, you've gotten them pre approved or and now the ponder has the file. What if in your ISO contract it says they can take the file if you don't close it within 30 days? 1:26:52 Now the merchants told you they don't need it for 30 days. Yeah, you're like, oh, right now if you have a good relationship, that might not come back to bite you. But if this is maybe your first deal with that funder, this is your first deal, You signed up, I'm going to do all this volume with you and you're like, I got this great merchant. 1:27:07 They didn't take it. And then 30 days later they're like, this guy sent US1 deal. It didn't fund our ISO agreement says we can take the file after 30 days recalling the merchants pre approved and the merchant goes with it and what happens? Broker says I was back doored. You know, the economy, blah, blah, blah. 1:27:23 You sent one deal, you didn't close it and your ISO contract says they can do it. But you said you were back doored. You weren't really back doored. You kind of did you kind of shot yourself in the foot, right. So maybe that's another way, another kind of aspect to to thinking about it, like if if you don't, if you don't ask that question and down the road you lost the deal. 1:27:45 Yeah, legitimately right. They had the right to take the file away from you. And so you could have just said I'll not send it to them right now because the merchant doesn't need it right now. I'd be putting their information out there. Doesn't need to be out there. 1:27:59 Speaker 2 Yeah, yeah, I mean, I, I'm always assuming no matter where I send it, I, I assume if I hit send on that e-mail, it is out there. You know, like we're saying how it just kind of, it just is what it is. It's in the universe. And if you ask the urgency question, this is a little bit more advanced stuff, but like you can build them, You can you can build their urgency. 1:28:16 So like for example, if they say to me, I'm not going to do it for a month, OK, Then I dive deeper into what is the situation. So for example, there was this, there was this guy opening up a second Kava bar and he wanted the money to renovate the building. So we found out he's paying 9 grand a month in rents. 1:28:32 And so I'm like, OK, so why do you want to wait a month? Oh well, XYZ. So it sounds like if you don't do this every single month, you're losing 9 grand in opportunity cost. And and so with that being said, that kind of moved him further in the sales process because even if they don't want to do it, you can usually find something to build the urgency. 1:28:49 Speaker 1 It's like, sure, maybe the money is expensive, but it's also really expensive to not do anything. 1:28:53 Speaker 2 Right now, exactly. 1:28:54 Sean's Personal Experience with Difficult Bank Financing Yeah, a lot of people, you know, want to know about how to, you know, what's the best, what's the best way to pitch. And I really believe that that going into the qualifying, like you said, as an underwriter of the diagnostic is the total is the total way to go. Now, some shops, they have like 90 people, 100 people, these big guys where it doesn't matter, it's all volume and they can play a volume game. 1:29:15 But to the individual Rep, you know, you really want to maximize every single lead. And I think the way to do that is to find out what they best qualify for, what is the purpose for the capital, and then do your best to fit them, you know, in whichever box. 1:29:28 Speaker 1 For sure. One thing I learned, so I'm a very hands on type of person, like if I'm going to, I like experimenting with everything. It's kind of like I was an underwriter and I was a salesperson. So if I can talk about underwriting or sales, I have a frame of reference to, you know, I have experienced doing it right. 1:29:46 And one thing I learned being in the industry that you were kind of taught to say banks aren't lending or you can't get money from a bank or it takes too long to get money from a bank. And it was like a catch phrase and you were supposed to say it, but I didn't know if it was true. The Internet kind of said it. It kind of made it feel like it. 1:30:02 And if he asked around, sort of the conclusion you got. But if you're like a 20 year old broker and someone says banks aren't lending, it takes three months to get money from a bank, you're just going to take him at face value, right? And if you talk to a merchant and you say that and then they tell you different, you're going to be like, you know, like, oh, I, I don't really know, you know, and it's like, you come across as sort of like just not know, not knowing, you know what I mean? 1:30:26 You kind of get caught in that moment of like uncertainty and, you know, not being an authority on the subject. And so one thing I had I had done when I started debanked was I want, I wanted to get down to the bottom of this. Is it really hard to get like a bank line of credit or like, what's the deal? 1:30:44 Because that was what I was saying. And sometimes I was called out on and I'm like, well, I don't know. You know, that's what they said on CNN. 1:30:50 Speaker 2 Yeah, yeah, yeah, exactly. 1:30:52 Speaker 1 Banks aren't lending or it takes three months to get a loan. And I was saying it and I just wish I knew for a fact. And so here at D Bank, we're we're business, you know, we're business. So I said I'm going to apply for traditional financing and see what happens. 1:31:09 And it turns out it's actually really hard to get traditional financing. It's hard to get money from a bank. So just to give you kind of the abbreviated version of it, I went to my bank and said how do I get a loan for my business? And I had to meet them in person and bring my tax returns and all this other stuff. 1:31:26 And I was like, OK, that part is true. You know, you do have to meet in person and you do have to bring your statements and it is going to be a whole thing. And then they told me I was going to have to wait and then someone was going to call me. And then they said, well, you could do an SBA or you could do an internal line of credit with us at the bank. 1:31:46 And they gave me the pros and cons. The SBA could take up to six months, but you might not get it. The bank line and credit is more guaranteed. This is the legitimate bank. Bank line and credit is more easier to get. You know, you're going to get less money, higher rate. So I'm like, I'm the merchant, you know what I mean? 1:32:01 And I'm like, but OK, this sounded sounded like a lot and I didn't have an urgent need, but I was like, OK, but I'm going to see, I'm going to see it through to completion. They actually talked me out of the SBA loan and they said, let's do the line of credit. So I had to meet them a second time, bring more. 1:32:18 I had to bring more paperwork. I had to talk to my talk to my accountant. This is a real thing. Talk to my accountant. And eventually then I didn't even hear anything. And I was like, are you still working on my file? Like what's going on? And then they said, oh, I think we think it's declined. And they had like, they thought, like, I wasn't current with the Secretary of State. 1:32:36 And they're, like, always the wrong edit. Oh, like, even them. Oh, the guys. Yeah. Guys. Yeah. Yeah. And you didn't even think to call me? Like, what is this? And they said, well, if you want to reactivate your application, you got to come back in. So I came back in and they're like, now you're approved. And then someone will call you to give you the terms. 1:32:53 Did it over the phone. And we only take a wet signature for the contract and only in person. You have to sign the contract in person. And it was like 100 pages. I was like, aren't I supposed to send it to my accountant and lawyer to review? Well, you could, but we'd have to schedule an appointment for you to again do the in person closing. 1:33:12 And I was like, this is weird. This is the legitimate bank and you've made this as hard as possible. If I had any type of urgent need, there's no way in hell I would have ever done this. I don't care what the rate is. I care about the rate, but I don't even care. This is absurd, right? We ended up getting the line of credit. 1:33:29 Can you get a bank line of credit? Yes. By the way, I have 800 credit, right? So I am, I am the I was the the perfect merchant of the time. And I had to jump through all those hoops. And it was, it wasn't even enough. It wasn't even the amount that I was trying to get. 1:33:45 So it was lower than what I wanted. Yeah, the rain was pretty good. Took too long to get there. For me, it was the most validating thing I'd ever gone through because I knew in that moment, this is a waste of my time. I'm different than the average person running a storefront retail business. 1:34:01 I'm in an office. I have more time as the owner. If I'm working with customers, the retail, I'm going to the register and I'm helping. I don't attack for this stuff. No time. And if I had any type of urgent need, no way. Even if I could have waited. The confidence they gave me in this happening was I felt like it was an uncertainty. 1:34:23 It died at some point during the deal where it said always decline and nobody told you and you know the whole thing. So I thought, wow, this is really unappreciated. I don't even think banks get it. I don't think regulators get it. That here I was. I've worked in the world of MCA. 1:34:38 Yeah, underwriter broker. I've set all the lines. I was always truthful. I've set all the lines. I recognized that the project I was offering was often times more expensive. And we're proposing an alternative to small business owners that we say, is this, that and the other thing. But and the alternative is legitimately difficult to get. 1:34:56 It was a true hassle and the uncertainty if I had to do something for sure, right? Let's say I needed the money for something. I had to close. I had to close. If I had to close on the money, would I take the risk that the bank was going to tell me it wasn't going to happen just to get the lower rate? 1:35:15 Hell no. No way, right? I was going to go with the guy who said he was going to charge me more because he said it was a lot. Really good chance of it happening. That's just the truth at the end of the day, that's the real world, right? 1:35:32 It isn't all about right, You said it yourself, right? You know, what's the, you know, what's the real objection, what's the real thing? A lot of times it's like I need the certainty that this is going to happen. Is this going to happen or not? So I think it's important for for brokers to recognize, especially new brokers, because you're told something on your first day, maybe you did research, you watched YouTube videos, Banks are lending, it's hard to get a bank loan. 1:35:55 You're going to sell this product. You know, we're, we're working capital for people who can't get it. All that stuff, it's real, it's real. The alternatives in the market are really and truly hard to get. MCA is the legitimate product, not just MCA, but the unsecured working capital loans that are out there. 1:36:12 These are legitimate products in the market that I myself is having worked on every side, being the merchant, the underwriter of the broker, or recognize that the merchant of course will take an MCA. Of course, it provides something that you just can't get in the real world for real world problems. 1:36:33 And I think a lot of being a broker is believing what you say. It was always important for me to believe in what I said, not just say it because my boss told me to say it. You know what I mean? Or it's the catch phrase or it's going to work. I wanted to feel it. Now, what I'm communicating is the is the right and true information. 1:36:51 And so having been on all sides of it, would you tell them, would you take a 149? I might. Yeah, I might. Yeah. It's truly I might. Yeah. Right. And I think once you realize, hey, I would do that in the right circumstances, that tells you everything you need to know. 1:37:10 And if you can communicate that to the merchant, if they have those circumstances, it's a, it's a, it's a legitimate service to the world. 1:37:19 Speaker 2 Yeah, that was beautiful. 1:37:21 Selling 149 Factor Rate Deals from a Merchant's View Seriously, though, I mean, like, is that like couple couple things that stood out? Was that like, like you said, you don't want to be a broker saying the wrong things? Like I've left sales offices because I was like wet behind the ears. I didn't know. And I would they would say things like, Oh well, if they do this, we'll get them this at the future night. I wasn't sure. And then I went on my own to find out the truth. 1:37:38 And it just you see how that, that a lot of this stuff that people are just BS ING, even though it's real, they just don't know why it's not real. Like just by knowing why someone wouldn't qualify will win you, even though that you know, they, they think they might qualify and that that expert, you know, coming off like that really makes such a difference. 1:37:56 Speaker 1 There was a line I used to use. I don't know that I would use it now, but I did a number of 149 deals. I also did a lot of lower factor rate deals. The cost of deals today, some of them are cheap, some of them are expensive. People talk about MCA in general as if it's a cost. 1:38:13 It's just a mechanism, it's a product, it's a procedure. You can get an MCA with a 101 factor rate. You can get one with a 149. You can get one with a 2.0. You know, technically you could make a factor rate really anything if you want. So when people say Mcas as a whole are expensive, it doesn't make any sense because you're talking about a mechanism or, you know, a, a procedure, you know, versus an actual cost. 1:38:40 You can go to Stripe Capital and get like a, you know, 104 factor 8 MCA, but that's not that expensive, right? You can get a 149 MCA. That's the number that people tend to throw around in MCA world. They tend to throw around the 1/4 nines. 1:38:55 Now, 1/4 nines had been around for a long time. It's a number among varying degrees of numbers. But people say, you know, why would a merchant take a 149 dozen that set 50%, right? 1:39:13 And not even annualized. That's just 50% cost of capital. And now if you take an APR, it's just that and the other thing and it's even more. But at the end of the day, if you just take the APR out of it, it's just essentially 49% or 50% cost of capital. 1:39:29 And so I used to be pretty well known for doing low factor 8 type deals with merchants, but I had to do 14 nines. And so I had to talk to merchants that were that was the only thing they qualified for. There was no Commission cutting. There was no buy rate. The deal was 149 or nothing. 1:39:46 And usually when they were getting offered a 149, it was in the very high risk category, at least for when I was doing it. And so I had to level with the merchants when they sometimes they would get a little bit of sticker shock and maybe they knew it was coming. 1:40:02 The most common one I would get was, you know, 149. This is not a great deal. And if I try to convince them that it was, I felt like I look bad, right? And so in the beginning, I was trying to do all that. Oh, and it's actually a good deal. The 149, but after a while I, I said, let me just let you know, level with them a little bit and say like, it's not great. 1:40:24 It's not great, right? But you know, you told me you wanted to do XY and Z with the money you do have, you know, 480 credit or 520 credit. So there's not a whole lot of options. It's not a great deal. 1:40:39 It's, it's a, it's a deal though. It's an opportunity and you can do the things you wanted to do with it. That's what it comes down to. And that's, that's what I'm, that's what I'm offering you the chance to do. It's a chance to do the things you said you wanted to do. Sure, I wish you could get more money too and you can down the line, you know, legitimately the way you'd have to. 1:40:58 You have to start somewhere. This is this is the way to go about it. Now. I imagine when you train brokers and you're at broker shops, people are probably pitching varying degrees of rates and stuff. Is there any way, surefire way to sell the more expensive type of deals maybe versus doing the lower? 1:41:20 Is it a different sales called, you know, doing it versus the lower cost deals? Like if you're doing a 149, do you go in with a different type of approach or is it the same approach, you know, where you're simply asking the question of like what do you need the money for? You know that type of thing? Are you just doing your your regular questions? 1:41:37 Speaker 2 That's a great question. I would say it's, it's pretty much the same for all of them. I would say on the opening where where you're, you're kind of diagnosing and like you were speaking about like on underwriting where you're trying to find out what are they looking to do when they need it? By how much is X going to cost? Are they going to make on it? Are they going to make a revenue or they going to avert having some type of catastrophe. 1:41:55 Then I have all those lined up. Then it might make sense where a 149, you know, depending on the structure of the deal really does make sense. You know, we're like, let's say that, you know, let's say that their, their daily balances are are, you know, $5000 every single day. And they're, they're waiting to get paid by, they just finished a job and they're waiting, it's been a month now and payments are coming in late and they're getting that payment next week. 1:42:19 And, and the pay and the payroll is 20 grand. The payment's going to come and it's going to be 50 grand. You know, they, that totally makes sense where they'll get the money like this and there's very little underwriting and they can either early prepaid it next month or carry it to term and with their daily balances like it all fixed. And what I would say is, look, let's say they're super qualified for the conventional, I'd go, you know, we can, we can definitely look at those options, but they're not going to get done inside of a day. 1:42:43 Unfortunately, that's just, you know, not how it goes. So, so when you frame it like that, it's all just a question of framing. You know a lot of the guys that that are 1/4 nines, they already know the situation, they know the deal, they had multiple funding. So it's a lot easier to sell. But when, when you come at it from all the aspects of like knowing every different type of product, like I haven't heard recently someone or just just people think SBA, they take six months to get done or they never get done just by knowing, you know, like an SBA express program, what they can pay off, what they can't pay off just by knowing the timelines, even though the person's not approved, they respect you because they're like, oh, this person actually, you know, took the time. 1:43:18 But I, I always look at it like, like the positioning of the deal matters more than than than necessarily. Like how you pitch it. It's like you have the problem. I have the solution here. Let's see if it's structures, right? Can we time it around the times or you have, you know, draws or or whenever you're getting paid towards the end of the month or or the beginning or whenever it is where it makes sense? 1:43:39 Speaker 1 Yeah. And I, I think it really all comes down to whether whether or not it just makes sense, right. And there are those who looking from the outside in to say 49% the cost of capital, that's just too high. Who in their right mind would pay that? But if you're a business owner, you understand things like profit margins. 1:43:56 And you might say, I can make more than 50% if I had more inventory and I sell it for more than a 50% markup, I make money on the deal. Maybe it shrinks my profit margin, but I still have a profit margin on it, right? There's also the opportunity cost, like let's say your competitor is going bankrupt and they're liquidating all their stuff. 1:44:15 And if you know, if you acquire your stuff versus your other competitor, you're going to be in a way, way better spot, right? Like they're selling off the stuff, they're selling off all their trucks or whatever it is and they're just going to, he's just going to sell off the yard. You know, it's not even an official auction. I got to walk up with cash, you know, and I'm going to, I'm going to win and it's going to be good because I'll be able to do more and my other competitor won't, you know, the opportunity cost of losing to the competitor who's going to get stuff off the yard, right? 1:44:41 And so you might look at the money and say it's 49%, but if I don't take this, you know, over the course of ten years, my business will suffer dramatically because I didn't do this deal. The only thing that matters is winning this this offer. Sure, it's expensive, OK, still makes sense for me to do. 1:44:57 And it's guaranteed versus the person's like, hey, you know, wouldn't you like a low cost of capital line of credit that's going to take three months to do? No, I need the money tomorrow to do this other thing. I don't, you understand, it's 49%, yes, I get it. 1:45:12 And I'm, you know, I understand that the cost of capital is high, right. But there's things I need to to do with the money. And so I think once you look at it from a business owner's perspective, there is a lot more to the world than just what's the APR, you know what I mean? 1:45:29 Like not to say that that's that component isn't a factor in any type of decision, but you know, even I have been in a situation where I'm saying if I move on something, I get X, but if I don't move on something, I'm screwed. And it's it's about whether or not I move on it and I have the money to move on it or I don't have the money to move on it, right. 1:45:48 And it's all about the long term play. And if someone tells me like, well, you should watch out. The cost of capital is too high. I would take a 149 if the situation called for it. That's just the truth. I'm not just saying it to make people feel good, you know, about the industry, I would do it. So I think that just as you said, you go into the calls the same, you know, as the as the other calls because at the end of the day, it's really about the circumstance, the circumstances that the merchants are in and whether or not it makes sense for them to do. 1:46:17 Speaker 2 Yeah, no, exactly. 1:46:18 Sam Kaye's Book: Insights into Merchant Finances and Sales And I mean, if you really do a deep dive, the banks get their money too. I mean, if you look at a a term loan, let's say at 15%, I'm being generous. I see term loans at 20% these days carried out to term 15%, seven years to pay back on 100K, it's like 160. 1:46:34 So this is a little known thing that like the banks get the money to you. If you look at a 500 KSBA, I haven't done the numbers recently, but a 500 KMCA, I'm sorry, A500K SBA loan, the prime best thing everybody wants carried out to term over 10 years, if it's 10 1/2 percent interest to pay back is like 1.1 million. 1:46:52 So like, you know, the banks get their money as well. MCA, it's just, it's just, you know, I like to use the analogy, would you rather get shot or stabbed? MCA is going to happen quicker. You're going to get it quicker. It's going to be paid back quicker. The bank, it's a slow bleed. Obviously the payments might make more sense, but it's it's, it's, it's really all the same. 1:47:08 Speaker 1 Yeah. And you know, I think there are those that would say, well, wait a minute, you know, you're forgetting about the element of time. And then that's paid off over a much longer period of time. And there are multiple ways you can look at the same the same set of numbers. 1:47:23 You could say, you know, from accounting perspective, well, it's still cheaper to do that over a period of 10 years, time value money, blah, blah, blah, right. But I think for a lot of us, a lot of business owners, it's cash in, cash out opportunity versus, you know, taking advantage of an opportunity versus not taking advantage of an opportunity. 1:47:41 And we don't always think about APR to make every decision that we make. You know, I think business owners are smart enough to make the call in whatever context they prefer. 1:47:56 They may choose APR as the defining figure that matters to them. They may choose the length of the term, they may choose the payments. A lot of times they're looking at, you know, the daily versus the weekly versus the monthly and that that how they think. But it's interesting if people would say a weekly versus a monthly writer or a daily versus a monthly because we're not really talking about cost of capital in that conversation, are we? 1:48:20 We're just talking about frequency of payments. And so it seems to me that a business owner in that circumstance is saying that is the most important thing to me, not necessarily the cost of capital. So would you, would you agree that when you know, when you're hearing merchants talk about maybe daily versus weekly versus monthly that that's the type of worldview that the merchant might have for how they handle like their finances? 1:48:46 Speaker 2 Sure, yeah, yeah, in a very like because these are these are you know, these are huge decisions and you know, if you don't have if you don't have all the knowledge, make the decision. And let's say, let's say you don't you don't try to do your due diligence and do a little background info investigating on this, then who knows, you know the type of business that you're running on face value. 1:49:01 Now, obviously the goal is that you you provide such good customer service and and such a good relationship and education that they they go with what you're saying. But I mean, yeah, if they're talking about, let's say daily or they're giving you a daily payment objection, a weekly objection, that's why I like to always isolate what the situation is. 1:49:17 So is it about the payback or is it about the payment frequency? Now let's say they say it's both. I don't wanna pay daily and I also don't wanna pay 50% back. So then I handle one at a time. Then I go into the cost of the capital, the speed, why it's high risk and why they might not qualify. 1:49:32 And then I go into the daily or weekly, you know, I'm like, look, no one wants you to not have this money and do well with it. Everyone's happy when when you use this money and deploy it, if you don't have a way to make a return on it or to save some catastrophe, no one's going to be happy. But looking at your daily balances of of 2003 thousand, we have this priced out where it's going to be very, you know, you're not going to feel it or etcetera. 1:49:52 But that's kind of like how I like to to sell it. But but to answer your question, absolutely. Yeah. I mean, it really can show sort of how they do their finances. 1:50:01 Speaker 1 All right, so Sam, I mentioned earlier that, you know, I bought your book unsolicited. You know, you didn't tell me to buy it. I just went to your website and I bought it. And I liked that it was easy to read. You know, it was very, very straight to the point. I've read a lot of books about sales in general. 1:50:16 What's the great way to talk to a prospect in general? But I liked that it was sort of a, an MCA type of specific thing. What inspired you to write a book? 1:50:26 Speaker 2 So what inspired me is, you know, just so little information on this industry. I mean, it's it's so guarded and in turn there's so much misinformation and BS and it's got such a bad name. I would go to parties and I'd say I'm an MCA. And then someone would go, Oh yeah, I hate that business, putting business owners out of business. 1:50:44 And truthfully, in all the businesses that I funded and the millions of dollars in funding and the the brokers I've trained, that is such a rare occurrence, you know, only when you're really doing like bad deals for the business owner. So I kind of wanted to change that and elucidate kind of like, you know, how to sell the right way. 1:50:59 I see tons of people learning the bait and switch way, which again, as we spoke about kills your renewal book and it it burns people and it gives them a bad taste versus the expert way. And the only way that I knew the, you know, the expert way was like through just, you know, trial and error. You know, I used to send my files for SBA and they would never get sent back or they're all declined. 1:51:18 And I would go on Reddit and I would say, how does an SBA get approved? Someone give me underwriting, etcetera. And I went to one SBA bank, then another and then found someone I liked. And then I learned, OK, well, you have to have these qualifications. So now when you speak to the business owner, instead of instead of waiting two weeks to hear their a no, you just ask them, by the way, are you profitable on your tax returns? 1:51:37 You know, what does your debt service coverage ratio look like? How do you guys look? Are you, you know, do you pay yourself a salary and these little things? And it just upped my game so much. And people were just constantly asking me to train and we're like, let's just, let's just do a book. And now we have a second one coming. 1:51:50 Speaker 1 You have another book. 1:51:51 Speaker 2 Another one that's going to go really, really in depth on some of the industries and also like a like a broker playbook they can have by their desk, which gives them bullet points on, on how to sell, how to pitch, how to qualify different products. Because you know, you're really at you're at the whim of the business owner. 1:52:07 There's people that do zero training. They give you a script, they give you the leads and then like you said, it's at sink or swim and then you have shops where they spend days training you before you go into it or bring people like myself into train. So it's like, it really is still like the wild, Wild West, you know? 1:52:22 Speaker 1 But it's at the end of the day, those who have training and have been educated have an advantage. 1:52:27 Navigating the Broker Career Path and Industry Stability Absolutely, yeah. Say, what do you think in terms of people coming into the industry? What like do you see like high expectations and not a lot of like preparedness or do you see people like, because there's such a turnover of people like real estate, you know, we're only, you know, maybe 20% of people are doing deals. 1:52:44 Do you do you find people coming in the street and not know and then kind of wash out or they end up converting? 1:52:50 Speaker 1 You come from the outside and you say I'm going to start a funder with no experience in the game. That's going to be really hard because first of all, you're not going to know how to how the broker industry operates and it's going to throw you for a loop when you find out how it works, right? They're going to send you all their worst deals first to test you out. 1:53:07 All these deals are going to go bad. You're going to wonder what's going to what happened? How come this didn't work if you started as your own ISO, an ISO owner from the very beginning also hard. You really need to spend time on the phones, on the front lines. Think people will respect the owner if that person has been on the phone doing the deals? 1:53:30 That might not be true for all shops, right? I don't want, I don't want to say if you own an ISO and you've never done it, you've never done it, then you don't get it. You might be a really good business person and you have what it takes to train other people, but I think it will give you a lot short of a learning curve. 1:53:46 If you've been on the phone with merchants and you had that experience before you start an ICE, an ISO shop, before you start your own shop. I also believe you don't have to make the goal to start your own shop. Like I said before, with the hierarchy. 1:54:02 Oh, that's broker and it's funded its investor. We all, you know, there's this perception of hierarchy and you have to move advance up the chain. Right now I'm with this, now I'm with that, now I'm with this. You can just be a Rep of a broker salesperson, regular salesperson forever. 1:54:19 The next stop doesn't have to be opening your own broker shop. Running a broker shop is extremely difficult, very hard, right? You need, sometimes you need outsiders to come in and train the sales sports, right? It's very difficult. It's hard on cash flow. You become a business owner, you become the merchant, right? 1:54:36 You become the merchant and then your pressures, you start feeling you. You realize you're in the same position for the people you're trying to help. And you might think that's an advantage, right? But you sign up for a different game by owning the the broker shop versus being the broker. 1:54:52 And here's a mistake a lot of brokers make when they start to think I could be running this place myself. I can start my own broker shop. The first thing that the first mistake these people make, if they say I'm going to take all these my whole book and I'm going to leave with it and use all this and renew it by myself. 1:55:13 Well, you've just told yourself that you can't do it without taking from the company you work for. And in many cases leaving with that book of business is the no, no, and whatever agreement you have with the company you work for. So you have to think I could be, if I, you know, I could be doing this myself. 1:55:30 Can you do it with throwing your entire book in the garbage and starting over from scratch? Because if you don't think you can do it from the first day, you can't do it. Such a good point. You can't do it. So you have to be able to start fresh. 1:55:45 Think about it, if you couldn't even use the lead sources, I know where they get all the leads from, throw those in the garbage because you have to, you have to realize that some of the things you had at that broker shop are really privileges of working for that particular shop. 1:56:02 You had it because the owner had a relationship with a certain vendor, right? And all of a sudden you find out how come I can't buy the leads from the same company and how come they won't sell them to me. You know, you realize that you're, you're starting completely fresh and you don't need to run. 1:56:18 You don't need to own the broker shop. Being a broker is great. You just get to focus on your craft. You don't have to be the merchant, right? You just get to focus on your craft. You just get to practice your calls, practice your rebuttals. 1:56:35 You just get to think about what diagnostic questions to ask, work on your inflection and your tonality, improve your confidence, become an expert at this one thing and not worry at the end of the day about I got to make payroll for this whole sales floor and I got to pay for all the leads we just bought and we're supposed to move to a bigger office. 1:56:57 And now you know this. The funds aren't coming in for that. You don't need that headache. Maybe you want to sign up for that and maybe that's in the cards, but I don't think that's the future that every broker on the phone thinks they need to advance to. Everyone thinks that's the next step. 1:57:13 I could be running my own shop. If you're a broker on the phone, that can be what you do for all time and you can make a ton of money doing that. 1:57:25 Speaker 2 Yeah, get a team, you know? 1:57:27 Speaker 1 Like you can be leading a team on, you know, you don't have to run the whole company. 1:57:33 Speaker 2 That's a good point. And people like even today, I try to, you know, try to let people know, look, the second you decide that's actually, I've never thought about the great point of how if you can't do without burning the bridge, what can you really do? And also that now you're talking about marketing, about expenses recruiting, whereas like, you know, just because you're a really good closer that necessarily might not translate well. 1:57:53 And one of the shops that I train, they have four or one 2-3, they have three teams. And all the team leads left started their own business. And then they ended up coming back because of how brutal is it? But also it shows that the loyalty and trust of the of the broker shop owner. But it's like, yeah, it might not. 1:58:09 The grass isn't always greener. 1:58:10 Speaker 1 The grass isn't always greener. You now you have to be aligned with the company you work for. It was something I said in the very beginning, right when you're, when you're training, when you're training a sales floor, it's important for everyone to be on the same page. 1 broker isn't doing their own strategy. 1:58:25 That's, you know, antagonistic to what the actual company is trying to accomplish, right? Or that it's adverse to their own goals. So if you work for a company that you're aligned with, there's no reason to leave the industry, you know, and you know, you appreciate when you have a good thing going and you know, think about whether or not what you have going reflects how you approach how you approach life, right sometime. 1:58:59 And also put put your merchant hat on your real merchant hat of what it's like to go through their day-to-day life. And there are those who come in and say they look at it like they look at it without ever having talked to a merchant and say, I'm going to help the merchant. 1:59:19 Oh, I'm actually going to help the merchant. I'm going to charge them less. And they, you know, they go in and they lead with rate and they work for a company where they work for the company where the rate was too high and it was hard to sell because the rate was too high. And they just never realized that rate wasn't even what mattered. 1:59:37 It didn't even matter. It's kind of like that example I gave you with Lending Club earlier. They're like, we're going to help the merchant, we're going to charge the lowest rate. And they're like, we didn't even win the deals. You know, what the heck happened there? So just because you work for a company where the the products you offer, the cost is high, it's not any type of negative reflection of the type of character the owner of the ISO has. 2:00:00 Capital just cost a lot in this world. The cost is just high and you just have to get over it and realize that if you ask the right questions and you solve a problem for the merchant, that's all that that's all that really matters. You know, it's it can be expensive, that's OK. 2:00:18 And if as long as you're aligned with the company you work for, there's no reason for anyone to wash out, you can work in this for the rest of your life. The best part about the industry now is that you can be confident that it's going to be around forever. The hardest part about 20 years ago was everyone telling you this thing was going to blow up in a year and to get out now. 2:00:37 Don't ruin your career by doing something that's on the verge of, you know, getting regulated and going out of business. That was what people were telling me. They said get out now. You're going to sell what over the phone, right? Is that regulated? That's all going away. 2:00:52 That uncertainty was baked into the whole the whole business, whether or not you stayed in it. For those that stayed in it, they're really happy they stayed in it. And now for the new people who are in, you're actually in a better spot because if you were working in, if you work in real estate or securities and stuff, you're like, well, of course it's going to be around because you can get a securities license and I can get it. 2:01:12 You know, I can become a real, I can become a realtor and regulated business and you have the confidence of recognition, acknowledgement. If you talk to somebody who's trying to buy a home or a car or a stock or whatever, we all get it. And I'm a car salesman or I'm a stockbroker. I'm a realtor. 2:01:28 It's a thing. You can be literally a business loan broker or an MCA broker. Now that's a thing permanent, right? There are certain states that require the owner of the company to have a registration or have some type of qualification that didn't exist before. 2:01:44 Now it does. That's certainty. If you're 20 years old and you're looking at the business of can I be doing this for the rest of my life or am I wasting my time, You have more certainty now than you did a long time ago. I wish I was starting out right now because looking back, you know what a whole lot of uncertainty that I had to go through that other people had to go through to get to where we are now. 2:02:06 So I think once you're in this business and you become good at it and you get it, truly get it, there's no reason for you to ever leave. 2:02:16 Speaker 2 So solid. Yeah. Yeah, right. Love that I look up to you and I respect you, you know, and just and just really the having the knowledge again, just being able to have a source, a database where all the industry like nothing competes to that. And like if I if someone says that something's on debanked, you know, it's real, you know, and some of these, you know, random things where it'll talk about, you know, I remember seeing one about Vox and they have this new credit facility. 2:02:39 It just helps you in your day-to-day conversations. It's like a secret plug of information of industry information that you know, obviously you've cultivated that I just think really helps. So I'm just so, so honored to be here, man. 2:02:50 Speaker 1 Thanks, I appreciate it. And and you know, to that end, I just wanted to say people ask me how come, you know, how come I'm not a broker in it? You know, if you liked it so much, how come you're not in it anymore? 2:02:58 Sean Murray on Building Industry Infrastructure with DeBanked I think it's a fair question. When people ask why don't you do this thing that you used to do anymore? Now you do conferences and you know, you run a little, you know, blog or trade journal or whatever. I think we have to look back as to what the industry was. First of all, we say the word the industry. 2:03:14 You ever say the industry, you know, we could call the MCA industry, you could call it a business, loan broker industry, small business, finance industry. But we use the word industry, right? That word is thrown around in my industry. In this industry. A long time ago when we said the word industry, there was no industry. 2:03:31 There was a bunch of companies that did a random thing and when you would talk to merchants about this industry, they would go and say what is this industry? And there was nothing to find when regulators would say we're hearing about little small companies offering capital and stuff. 2:03:46 Where do I go to learn more about your industry, huh? I don't know. They're like, well, what where can I go? What kind of what kind of show can I go to a conference? Where's your trade show? Well, we don't have those. OK, well, you know, where can I read your your trade magazine? 2:04:03 We don't have that, huh? This industry lacked serious infrastructure. It was it an industry I was in the I was at the point where I was like, it's missing something. Big payments has it, equipment financing has it, factoring has it. 2:04:20 They have this industry and it's cohesive. And the reason why they have education and they're rooting out bad actors is because people are communicating with each other and putting information out there. It's a real need. If this is going to work, we're going to have the pipes, you know what I mean, that every other industry has for it to work. 2:04:35 So we need, we need a conference, We need like a trade journal. We need news for people to know what's going on. And then when we complain about bad actors and education, at least there's a central repository for information. At least there's a conference where you can go and meet the other people. 2:04:51 And anyone looking out for me outside in can see, oh, it's an industry. They have a trade, they have an industry trade show now they have an industry trade magazine. So I think it's a, it's, you know, the reason I do this now is, is because back then we didn't even have that stuff and someone had to do it. 2:05:12 It was going to be someone, right? If not me, it was someone else. And I just felt I had the best chance of fulfilling that need when the industry needed it, right? And so I jumped on that path. At that time, I was an underwriter, so I knew that I was a broker. 2:05:30 So I knew that I even dabbled with selling leads and stuff a little. So I kind, I kind of knew that whole world and I had been to other industry trade shows. I said this industry just really needs this and so that's why I went and I and why I am where I am now. 2:05:45 Speaker 2 Genius idea. I mean really, you know. 2:05:47 Speaker 1 It's a simple idea too, right? It's a very simple idea, but I do yearn for the days of being on the phone with purpose. You know, it's I became I became the merchant in a lot of ways, you know, running this run an office now people work here and stuff and manage things that merchants think about, But it's put a lot of perspective on what it's like to be the merchant at the at the end of the day. 2:06:09 And also I can kind of celebrate brokers more in a way that maybe wasn't being recognized before. They're undervalued and I think underappreciated. 2:06:24 Maybe their funders appreciate them. But I think to the public, the public perception business loan broker, right? You could read news stories online that say some very negative things about these people. You know what I mean? 2:06:40 And I'm like these people. It's just a regular industry of people helping other people. Truly, at the end of the day, there's nothing that shady about it. You know, that's shitty about it. We're all here. We're all just trying to help people. And me being able to just facilitate that part of it. 2:06:58 I don't have to be on the phone. I would like to be on the phones, but I'm just playing my role in trying to make it better for everyone else. 2:07:07 Speaker 2 Yeah, which I think definitely you cleared a path, you know, for. And like you said, someone had to do it. And it definitely helped the industry, shining a light on it, making it a real thing, like you said, even being able to call it an industry, you know, like the repository of all the information, It's great. So sick. 2:07:21 Speaker 1 Sam, where can we go to see some of your your teaser tips and tricks for sales? 2:07:27 Speaker 2 So on Instagram I'm pretty heavy on there, which is at Sam K, sells S AM the letter K and then sells SCLLS. Also the website samksells.com and then the YouTube is cash advance training. I know a lot of shops training. 2:07:40 Speaker 1 Yes, advance training. That's a nice, nice word there. 2:07:42 Speaker 2 Yeah, that was the original name. And like I know of shops that train their reps on some of the free videos. So we actually came out with some good stuff for that as well. But but yeah, cash advance training on YouTube, Sam K sells Instagram, TikTok and Sam ksells.com. 2:07:56 Speaker 1 Awesome, Sam. Thank you. 2:07:57 Speaker 2 Sean, thanks so much. OK.