Is Nearly Every Merchant You Talk To Stacked with MCA Debt? Here's What To Do...

Have you noticed that no matter how hard you pound the phones, no matter how many "fresh" leads you buy, no matter how sophisticated your digital marketing methods (Facebook, Google Ads, LinkedIn, etc), and no matter which acquisition channels you target, all you get is dog shit? Merchants stacked with 2, 3, maybe even 4 MCA positions? If you're tired of fighting for crumbs, then this post is for you. Read on...

Hey I'm Sean (the owner of this site), and after talking with loads of ISOs and MCA companies and generating inbound leads for them from the SAME channels that the big companies like Ondeck target, I found a common problem.

No matter how great our digital marketing was... Most of the deals we would get were merchants who already had MCA debt, and some were even stacked with multiple positions. And this was true no matter how much we filtered their revenues, and no matter how thoroughly we qualified them through our marketing funnels.

So the natural question arose...

What if this industry is reaching complete market saturation, and is ripe for disruption by innovators?

To give you a bit of an analogy, let's visualize the alternative lending industry as a trend that started back in 2008 with good intentions... And the trend can be seen below as a pendulum. All movements and trends usually behave in this sort of cyclical way...

In the diagram above, you can see that the pendulum has gone way too far to the right when it comes to Merchant Cash Advance debt. What started off as a benevolent movement designed to help business owners get access to working capital when banks denied them, has somehow turned into a malicious and predatory trend, where now we have merchants out there with extreme levels of Merchant Cash Advance positions. Even when I was running ads to get leads from the freshest lead sources, we were running into merchants who were stacked to the ears with MCA debt...

4 Specific Reasons Why I Think the Merchant Cash Advance Industry has Reached Complete Market Saturation

These are just 4 reasons I came up with off the top of my head, but I'm sure there are plenty more we could find if we really dove deep into the subject...

Reason #1: Everyone and their mom is a business loan broker nowadays. It seems to be a tradition especially in NYC that everyone should be aware of this opportunity. With movies like "Wolf of Wall Street" creating a frenzy of people excited to become high-ticket salesman. That movie romanticized the boiler room type of atmosphere that is all too common all over NYC, and that is what drives so many people into the MCA industry. It's filled with people just like Jordan Belfort who consider themselves "alpha closers" and want to be seen as a "Wolf of Wall Street". So basically, it's clout and status chasing as usual driving more schmuck brokers into the MCA and similar industries.
Reason #2: The economy is in the gutter and it's only going to get worse. People are desperate, so they are flocking towards industries like MCA and Real Estate and Recruiting, which offer large commissions in sales. When people can't afford to make their rents, especially in expensive cities like NYC, Miami, Los Angeles, Chicago, they will flock to industries like MCA and you will face more competition because the barrier to entry is so low to get started.
Reason #3: Sophistication of marketers entering the space has increased significantly since 2018. These dudes are saturating the space even more with MCA debt. They know about "Clickfunnels," they know about marketing funnels, they know about "HelloSign", they know about CRMs, they know about email marketing automation, they know about systems and processes, they know how to use technology to get the bank statements without chasing clients, etc.
Reason #4: There are dudes like Oguz Konar creating online courses for "how to become a business loan broker" and he has A LOT of members in his course. His course is pumping new brokers into the market at unprecedented rates, creating a race to the bottom for ISOs who work in this industry (and not just with MCAs but also with other financial products). I have nothing against Oguz and I respect his hustle, but you have to admit that guys like him are adding fuel to the fire when it comes to market saturation for the merchant cash advance industry. The main problem is that there is a low barrier to entry in this industry and anyone can become a business loan broker.

The Light At The End Of The Tunnel...

It finally hit me when a client whom I had previously worked with to generate deals for them had completely changed their website to focus on Merchant Cash Advance debt restructuring.

When I saw their new website, I realized that the industry is shifting and that there is a potential blue ocean opportunity here for ISOs and Merchant Cash Advance companies. 

And if ISOs like you don't take this opportunity to innovate, then there are money hungry lawyers and debt settlement companies who will.

Disruption to this industry is definitely coming, and you want to be on the right side of it.

What is a blue ocean opportunity?

In his book Blue Ocean Strategy, W. Chan Kim describes the business landscape as consisting of red oceans and blue oceans, where red oceans are competitive spaces where competitors are being torn apart by each other, creating a red, bloody ocean.

A blue ocean is an entirely new uncontested market space where you have no competition and are the first to market. The book talks in depth about the concept of value innovation where you disrupt the status quo of the industry by doing things that make the competition irrelevant.

A core principle of Blue Ocean Strategy is Value Innovation

So basically, value innovation is where you're creating more value for the buyer while simultaneously cutting your costs for delivering the value. And of course, the value is delivered in a way that runs tangent to the industry standard (no one in the industry expects the value to be delivered in that way).

Keep this concept in mind as we continue our discussion of the alternative lending industry and why I think it's ripe for the application of "value innovation" through debt restructuring and consolidation.

Most ISOs are Competing in a Red Ocean with Diminishing Returns

Contrary to what most ISOs told me on the phone when I was asking about their lead problems, there isn't an infinite supply of A and B paper merchants.

On the phone, ISOs would tell me "we're always looking for new lead sources" or the all too common "we're always looking to diversify our lead sources." 

When I dug a little deeper, I realized that they have no clue what they're doing when it comes to this industry.

They really do believe that there are "new lead sources" out there that will bring them A and B paper deals FOREVER.


These guys are mainly just sales guys who have been doing sales all their lives and think a lead is some magical piece of paper with a name and number that appears out of the ether.

All they do is pound the phones and hope to get some merchant who is blissfully unaware about all the greed from shady actors in the unregulated alternative lending industry.

This greed translates to stacking debt on top of debt onto merchants (even if the merchant's business cash flow cannot support it).


Because most ISOs only care about making money and not about actually solving problems like a true entrepreneur does.

Blue Ocean Opportunities are Emerging in the MCA Industry...

The MCA industry is ripe for disruption and here's how...

Method 1 of Disruption: Niche it down and get super targeted, with a focus on MCA debt consolidation

Status Quo: Most ISO's are all just chasing random merchants with no focus at all. They'll work with any kind of merchant who they can fund, because they're desperate to get that next commission.

Cost Reduction: This means that most of your competition is not targeting a specific niche of merchants. Niching it down to only helping a certain type of merchant reduces your costs to target them.

Value Increase to Buyer: Meanwhile the value offered to these MCA debt-ridden clients is enormous. You can consolidate 3 MCA positions with 1 larger position, either through MCA or a collateralized product or any other type of financial product like a line of credit. And you'll make a huge commission on that deal. 

Value Innovation: So not only are you reducing acquisition costs to get access to that merchant, but you're also increasing the value to the merchant and in turn a bigger profit through commissions.

Method 2 of Disruption: Big lenders and ISOs are restricted on certain traffic channels, opening up opportunities for smaller ISOs to gain an edge

Status Quo: Facebook Ads is no longer available to big business loan companies. Doing competitor research on SimilarWeb and other competitive research sites, we can see that the big MCA companies no longer advertise on Facebook as an acquisition channel. This is great. It means they aren't bidding up the prices and making it super expensive to target merchants who need financial services.

Cost Reduction: Lower costs to reach merchants on acquisition channels that were unavailable due to high costs until now.

Value Increase to Buyer: Merchants who are stacked with MCA debt can now receive your debt restructuring offer without so much market noise polluting their Facebook feed, thereby allowing your message to get through more easily and increase conversion rates and therefore commissions on your debt restructuring offer.

Value Innovation: Loan companies can no longer use data on certain channels like Facebook to target small businesses that might be looking for funding. So by advertising on channels unavailable to the big lenders and ISOs (your bigger competitors), you're able to value innovate in terms of acquisition channels, dramatically lowering costs to reach merchants, while simultaneously boosting conversion rates and profits.

Why Focus On and Pursue Reverse / Debt Consolidations?

You vs Your Competitors:

Unorganized vs Focused approach:

Your competition is unorganized, unfocused, and tries to fund everything
You on the other hand, niche down and focus on reverse consolidations or other types of debt consolidations
Niching down reduces your acquisition costs

Small deal size vs Large deal size:

Your competition hustles to close multiple small deals
Your average deal size will be huge because you're combining multiple MCAs into one large position and getting paid 8 to 12 points on it
Your average deal size has just gone up significantly without working harder

So far, you've decreased your costs and increased the value. Sounds like blue ocean value innovation to me.

Here's some more key notes about why you should pursue reverse consolidations:

Creating problems vs Solving problems:

Your competition is creating problems in the market
You on the other hand are fixing the problems your competition is actively putting all their effort into creating every single day

Hard sell vs Easy sell:

Your competition is working hard busting their ass trying to tie the money to a need the business has, so they have to hustle to sell to merchants
You on the other hand have an easy sell. "Get this loan because it will fix your cash flow problems caused by excessive MCA positions"... And your sales pitch does not vary from merchant to merchant. It remains the same Every. Single. Time. This means you could scale easily.

Every single day that you wake up... hundreds of thousands of ISOs and funders are waking up the same as you, choosing to compete in a red ocean filled with fierce competition and are stacking merchants with debt, literally creating new opportunities for you to capitalize upon.

Here's an interesting analogy:

In nature, when things are out of balance, there will be a catalyst of some sort that brings the distortion and chaos back into equilibrium and order.

In the financial services industry, you are that equilibrium and order that balances out the chaos and distortion being created by the rampant stacking of debt going on currently in the MCA space.

This is why you should focus on and pursue MCA debt consolidations.

And once you choose to take that next step and pursue a blue ocean opportunity and differentiate yourself from all the other ISOs tearing each other apart in the red ocean, that is where I can come in and help you...

How Can Help You Develop An Inbound Lead Gen System that will bring in Merchants who are Perfect for Debt Consolidation

Hyper-Focused Niche Targeting:

Niche targeting will lower your costs to advertise to these merchants.

Whereas MCA companies try to target EVERYONE (which increases costs significantly), we will help you target a specific niche of merchants who need MCA debt restructuring and consolidation help.

Traffic Channels:

Whereas most MCA companies are now restricted with advertising on Facebook because of the credit, housing, and employment restrictions that your competitors have to abide by, you will not have to abide by these because you are not advertising credit related opportunities like business loans. This gives you an edge over the competition since they are no longer advertising on Facebook (which is an extremely powerful tool when it comes to targeting).

Marketing Funnel:

Compared to the typical marketing funnel for an MCA, the marketing funnel for debt consolidation will look much different. We will go into what kind of debt and positions they have and what kind of outcomes they might be willing to accept, as well as qualify them on a variety of other factors. It all depends on the specific things you are looking for in an ideal debt consolidation client.

Backend Technology:

Our backend technology will pull any documents like bank statements or applications you need from the merchant before you get on the phone with them. They will probably be much more eager to submit their documents with you as opposed to other ISOs because you're actually trying to help them with their debt problems instead of adding to them.

Schedule a Strategy Session Now

Enter your name and email to schedule a strategy session if you want to work with us to generate qualified MCA debt consolidation leads:

Schedule a Strategy Session Now

Once you opt-in, there's a free case study video that goes over how we generate the freshest leads in the business. You can watch it or skip straight to the next step to schedule a call with Sean.

About the author

Sean Nayyar is the CEO of Lendnet and has been working in the alternative lending space since 2014. Currently, Sean is helping Small Direct Funders and ISOs in the merchant cash advance space to get more leads by helping them develop their own automated inbound lead gen systems.

Sean Nayyar

Founder of


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