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Crash Course Part 6

Cash Flow Mortgage Note Brokers Learning Factoring

Cash Flow / Mortgage Note Brokers

Note brokering is a very popular home business and is especially popular among those involved in real estate transaction such as “fix & flip” and wholesale purchasing.  Private owner financed mortgage notes offer flexible financing for many home buyers but sellers taking back and holding such paper often fine they need to sell early due to unforeseen circumstances.

Many mortgage note brokers add other products to the consulting business such as business notes, annuities, structured settlement, inheritance advances, and more.  One of the most popular areas of addition for cash flow consultants is to add commercial finance transactions for business owners such as factoring and asset-based lending. 

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Questions & Answers

Does IACFB Have Cash Flow Broker Training?

Yes, we do supply an introduction to that industry in Factoring 303 for our Freelance Consultants.  However, we recommend brokers truly interested in that industry contact one of the excellent industry trainers such as “Note Queen”, Dawn Rickabaugh. 

Additionally, WordPress Factoring Broker website templates at DataMax can be easily expanded to include the various Cash Flow Products, although we recommend a separate website for each set of industry services.

Are Cash Flow Product Commissions Residual?

No…all of the product areas in the cash flow industry pay one-time commissions in “points” with a point being 1% of the amount advanced or amount purchased.

Do you need a license for Cash Flow Industry products?

For most, no professional license is required so long as you strictly act as a “finder”.  For mortgage note brokering, however, you need to check with your individual state authority.  Your Cash Flow Broker / Note Broker trainer can tell you more.

What Is the Cash Flow Industry?

The “Cash Flow Industry” is a consumer products industry that focuses on notes (private mortgage notes in particular) as well as certain other obligations such as…

  • Structured Settlement Annuities
  • Lottery and Vegas-Styled Gambling Award Annuities
  • Private Business Notes from the Sale of a Business
  • Inheritance Cash Advances (Cash Advance on an Inheritance held up in Probate)
  • Advances on Pending Legal Settlements (Pending Cash Awards for product liability, wrongful death, or similar cases)

Similar to factoring consultants, independent brokers operating in the consumer-based Cash Flow Industry earn a “finder’s fee” when they refer an individual to a specific lender that will purchase a particular cash flow product, such as a private mortgage note, and provide the seller with a lump sum of cash.  The lump sum “cashout” is always at some discount to the total value of the future payments.  The broker (finder) then receives a commission percentage of the total lump sum cash disbursed.

Factoring Transactions:  A Natural Add-on for All Cash Flow Brokers

Brokering factoring transactions is a natural (and powerful) product add-on for all of those individuals operating in the Cash Flow Industry.  Much like the standard products found in the Cash Flow Industry, factoring is also a “discount” transaction.  But there are some additional differences and benefits…

  • Factoring is commercial in nature rather than consumer.  This means there are never any professional licensing issues to be overcome
  • Because factoring relates to business owners, locating prospects could not be easier.  Virtually every business owner (whether operating in the U.S. or abroad) is a prospect for factoring or some other form of related alternative commercial finance product.
  • Commissions paid in the factoring industry are residual and for the life-of-the-account.  A single factoring client placed through IACFB can easily generate a monthly commission check for 3 year, 5 year, 7 years or longer.
  • It is very easy to utilize inexpensive networking as a lead-generator for factoring clients simply by attending meet-up events sponsored by local organizations such as Chamber of Commerce, SCORE, and any local SBDC.
  • Adding factoring as a new Cash Flow product area is very inexpensive and usually only involves adding a page or two to your active Cash Flow Broker website and picking up a copy of IACFB’s Factoring 101 broker training guide.
  • For those wanting to become a little more “aggressive” in their marketing efforts, IACFB Campus Annex marketing material templates and marketing aids (flyers, brochures, cover letters, cold call scripts, mail stuffers, postcards, letterhead, envelopes, business cards, etc.) can be easily subscribed to.

CRM…a Critical Component

Although Cash Flow Brokers can typically operate without a CRM (Customer Relationship Manager), those taking factoring seriously cannot simply due to the ease with which you will generate prospects and leads.  If you are a career-oriented factoring consultant entering the industry, one of the most critical “essentials” you will require from day one is a CRM.  Pipedrive™ is a near-perfect CRM for factoring brokers at a very affordable price of just $15.00- $25.00 per month and Cash Flow Brokers will also find it to greatly assist in managing the consumer side of the industry.  Cash Flow Brokers adding the factoring product will be “filling the bathtub” and building many lists of prospects in their first 30-60 days and you cannot possibly manage marketing to these lists without a quality CRM.  At IACFB, we provide a link for a FREE 30 Day Trial of Pipedrive™ at the IACFB public website.