September 2020

Welcome to JKE Management's simple back office access. As we grow, we are constantly seeking new ways to optimize our operations to be more partner-friendly. Right now we are undergoing a complete back-office build for partners that will integrate with our lending/syndication software to offer complete control over your financing portfolio. Your investments are important which is why tracking performance is essential.

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Conference Table

The need for capital is there, however, merchants still seem to be a little unwilling to move forward on fair and just offers. This reluctance is most likely due to the government's low-cost PPP and SBA options that flooded the marketplace a few months ago. Because of this, merchants have had unrealistic expectations on loan/funding costs with delusional demands that they know are unable to be met by the lender.

In a sense, they have forgotten where they came from. Clients that have funded MCA's in the past, even multiple MCA's are not recalling the rates or terms of their previous deals and this has been really frustrating for many of us. We are seeing this get better as each week passes and the industry settles into the "new normal" of alternative business finance.

 

Because of the changing marketplace due to the global pandemic, we have slightly changed the way we are underwriting our files to focus more on the activity of the consumer as opposed to the activity of the business/business owner. This means, just because a client has a credit score of 750+ and has been in business 10+ years doesn't mean they will qualify for 7% - 15% rates if the business is generating under $25,000 per month or has decreased revenues since COVID-19. 

The client and business may have a great profile/history but if the current consumer behavior shows reluctance to buy then that could only mean lower deposits, ledgers, and higher risk for the lender due to a questionable payback period. MCA's advance capital based on the client's future receivable income, not on their business and personal reputation. If the future receivables of the business are questionable, unknown, or threatened then it means larger risks for the lender who is cutting the advance.

The standard rates we are seeing for 9 - 24-month options are between 17% - 28% with an average commission payout of 6.8 points for each funded deal. The important thing is to set the client's expectations when qualifying and really dig into the struggles they are seeing in the marketplace. We are offering advances, invoice factoring, and credit lines at the current moment and able to match the industries lowest rates on all of these options. We do everything to put together only the best deals for our clients and put our focus on a long term relationship to ensure the success of their business. - In a sense, we are like angels in this marketplace and that is not common. That's one reason why our renewal rate is above average and another reason to be proud of what you offer, don't let these merchants bully you.

 

Some Will. Some Won't. Someone Is Waiting.

Many good things are coming out of this change and it is important for us to notice the opportunities that are now surrounding us.

A lot of mid-sized businesses that normally wouldn't have qualified for SBA options are now qualifying for SBA loans and government funding. We are now seeing the opposite side of the spectrum with our applications, whereas now, large scale businesses that were either declined for PPP / SBA or their credit lines revoked from their bank are starting to enter the alternative finance market with MCA's, factoring, and LOC's as their only option for capital. We are seeing clients that have never applied in our space before and there are some very interesting new opportunities available - It's similar to the 2006 - 2010 funding boom where we get a lot of clean 1st position files on A-paper businesses with revenues over $2.5M.

These larger businesses are in desperate need of equipment, unsecured capital, and future credit lines. They want reliable relationships that they can trust and that are not going to abandon them when the economy gets tough. Because of our commitment to our clients and require less paperwork than banks with less strict underwriting requirements, it makes these options simple to fund with merchants having access to capital within 24-hours. Once funded their account is managed in a way that puts the clients near-term and long-term goals in mind with calculated plans of action.

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Pro-Tips

Our saving grace during this time has been renewals. 

 

During August about 48% of our revenue was due to renewals. Our large construction/contractor deals have been our strongest performing clients during these months and our main focus in the upcoming months as we carve out a new niche in today's marketplace (More updates on our niche later).

RENEWALS, RENEWALS, RENEWALS!

September - December are the best months in funding! The need is there and we are exiting a pandemic, focus on building your pipelines and managing the clients you currently have. See if they need funding, equipment, etc. - Stay on top of everything!

These months are the best for immediate deals as clients need financing for the holiday season. In addition, anything you fund during these months will be eligible for additional funding within 30-days and scheduled for renewal once 40% paid down. Secure those deals now and start writing your renewals for 2021.

JKE Management is opening its leasing platform and training to partners through JKE Leasing during the month of September 2020.

 

Equipment financing and leasing is a very lucrative industry that creates relationships with vendors that leverage their sales force to generate clients while granting them access to our banking platform so they can finance customers and sell more equipment.

  • 50% commission on ALL equipment deals!

  • $5 per pipeline submission (50 monthly min.)

  • Now paying $20 per lead submission!

What You Can Expect In September...

  • The primary focus in essential businesses; mainly construction, contractors, trucking, and manufacturing. 

  • Reps to be trained by JKE Leasing - Reps will learn how to reach out to vendors to offer "vendor financing" for equipment purchases. This will build reliable repeat business on equipment financing and leasing transactions.

  • Additional commissions for equipment sales - We have a lot of equipment that needs to be sold (trucks, trailers, heavy machinery, forklifts, manufacturing machines, etc.). If you're client purchases/leases one of our equipment pieces earn double commissions! - One for the lease, one for the equipment sales $$$$$!

  • 50% commission on ALL equipment financing transactions during the month of September.

  • A merchant checking account through one of JKE Financial's banking relationships is now available to clients and offers credit lines and no fees.

  • New LOC options.

  • More ways to earn commissions!

No More Announcements

Please check in later for more announcements.

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