13 Apr Can ISO’s Compete with Online Lenders?
There is no doubt that technology is changing the way the Merchant Cash Advance space operates. Companies like Ondeck and Kabbage seek to automate the lending process by developing algorithms that can make credit decisions and match businesses with loans. But while this approach has yielded innovation and growth within the industry, it has also somewhat alienated the key drivers of new business: MCA brokers.
That puts ISOs in a strange position, as they too rely on these new online lenders for deal terms that they couldn’t get elsewhere for their clients, but they are in a sense fueling their own demise.
So the question is, what can alternative loan brokers do to maintain their relevancy in a changing industry?
They need a way to get a viable deal for their client, and they need a way to drive down the price. If ISO’s are submitting to small shops, they can’t afford to submit to just one or two, because they may not get the favorable terms they want, or the shop may not be able to handle the volume. That’s why ISOs need to be able to submit to a whole pool of smaller lenders.
So now they are getting a bunch of offers. Cool. But why stop there. We can get an even better deal by leveraging the best offers in a competitive bidding process, where MCA lenders can adjust their bid in response to someone making a better offer than them.
Because you are submitting to a bunch of smaller shops, they’ll be able to cover loan volume. And because they are competing and bidding openly, they will essentially become one large MCA that fights internally to get you the best deal.
So to compete with the big guys, the small guys need to come together and compete openly. And our platform is perfectly enabled to be that place. In, fact it was built to be that place.