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Education

Loan Type APRs Don’t be fooled by your consumer experience, though, just because, for example,
you bought a car recently at 0 percent financing. You might have got 0 percent
Bank 3.25% - 13% because of your good credit, but someone is paying (the manufacturer) the cost
Commercial 3% - 11% to loan you the money to get you into the car. Banks are in the business of
making money and they are not in the habit of lending money to businesses to
SBA 2.4% - 8% lose money. They have to cover their cost to borrow and to lend.
Non - profit 3.25% - 8.5% Learning to question what you hear when it does not make sense is extremely
Medium - Term 4% - 30% important. If we don’t question what we hear, we will inevitably lose potential
Short - Term 6% - 80% opportunities without even exploring them. Allowing erroneous information
to exist in our sales process only serves to delay the sale and frustrate the
I nvo i c e 11% - 60% parties involved. Make sure you know your industry, and get the information
Financing from those that can provide it. This will make you more informed and better

E qu ip m e n t 3.25% - 20% at what you do.
Financing
Merchant Cash 35% - 300% Money is never free. Discovering the cost you sell against is paramount, because
if you don’t know what someone pays for money, how can you replace it with
Advances your option?
Question what you hear
Roger McNamara, president, Guide2Interchange LLC, is a 25+-year veteran of the payments
As sellers of funding, we are often industry, most recently as the director of business development with American Express in the
in conversations with finance types United States. He has sold more than $200 billion worth of card processing and now leads a B2B
about their cost of borrowing. merchant sales training organization. For more information, see Guide2Interchange@gmail.com
Sometimes it seems like an Olympic
sports event where you are told of or call 561-379-3151.
these incredibly low rates businesses
were able to obtain. And with each
call you make, it gets lower and lower.
The conversations go something like
this:
Question: “So, what is your weight-
ed average cost of capital?"
Answer: “Yeah, we are paying 2
percent right now.”

Two percent? Can this be right? you
wonder. And then you think: I am
not sure about this; I have heard that
funds are cheap today; this seems to
confirm that; as a result, I will never
be able to sell this supplier, because I
am a more expensive option for them
to collect those receivables.

Think again. The key with any
financial sale is doing your own
homework. At any rate (no pun
intended) stop listening to the noise
that says money is cheap. Sure, for
good businesses that have great credit
and an excellent history of paying
creditors on time and in full, funds
will be less expensive than for those
that do not. This is just the same as it
is in the consumer world.

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