Inside Money Today

Lendinero's blog on Growing Your Business

ISOs need to have realistic expectations on Metrics

ISOs need to have realistic expectations on Metrics

 Many ISOs or business funding advisors want to close every transaction. Realistically speaking, that is not possible. A safe metric for the alternative business financing industry is the 30% rule. This means that only 30% of your loan applications will be funded for two reasons: 1. The deals will be declined 2. Your merchant will not accept the terms because the loan amounts are too low or rates are too high What does this mean? If you submit 10 loan applications, expect 3 to close. To build a lucrative business you need to originate about 100 applications per month and expect at least 30% to fund (30 deal funded). Reaching 100 applications is not an easy job. You need people on your team to do this and you need to spend time and or money to do this. Thereafter, you need to calculate your gross earnings, cost of sales (commissions), cost per lead, and your expenses. Running a profitable business funding operation is not only about making profit.

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