Factoring Industry Basics

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Factoring Industry Basics

Also Known As

Funding Structured Settlements

A Product Of The MFN Group -

copyright 2009 by Greg Nichols

Explanation of the MFN Role and Your Role!

A person that funds cash for receivable payments is called a “factor.” A person who sends clients to a factor is called a factoring broker. If you refer people to MFN to fund them, you are acting as an affiliate to a factoring broker. We want to share knowledge with you to help you make money in this field, but we recommend you do not quit your day job, yet! This is designed for you as a passive way to earn, or by default, and to give you one more income stream. It can happen often, or not so often. If you are serious about doing this, take the attorney letter and personalize it, and send it each month to the same 20-30 attorneys (or more). Watch a referral network grow for you, as you earn commissions. The incubation time once you turn in a lead is about 60-90 days, for we at MFN must go through a series of steps, and our sources have a huge process. But when your check comes, it will be gravy money!

Another way besides the attorney letter is to run ads in your local area. Find all the expensive and inexpensive periodicals and price a short ad that we will give you in this e-manual. Run those ads often, or even non-stop. This works, as the need to sell structured cash flows is greater than you might think. Once I started the two procedures I just gave you, I kicked myself for not starting them 2 years before. Once you get a lead, it is so easy, you won't believe it. You ask them a few questions, and you part is done. We and our source must make a deal with the lead for you to be paid, and there are a lot of shoppers, who you'll not be paid on, but this is a numbers game. Our residual part will make up for you attrition locally.

Who might you find to score a big commission?

A sports person in the big money!

A lottery winner in the big money!

A new heir who just got payments! (it is common)

A fresh just paid lawsuit! (this is very common)

Here is an industry beckoning you to come and get your share, for payments are being made in the billions, and a huge portion of those will be sold, and factors and factoring brokers will make loads of money. Factoring has been around for decades, maybe centuries.   People sell their monies owed them in payment form for lump sums of cash, at a discount. Human nature and the constant need for cash keep this industry forever going with no end in sight. New income streams opening up by insurance settlements, like from personal injury lawsuits, inheritance annuities, lotteries and gaming, and many other avenues further creates huge numbers of potential “deals” for factoring specialists.   Another more modern category of factoring is the accounts receivable field. Factoring invoices is popular and companies are using their invoices due them to solve all kinds of problems, such as payroll, growth funds, and even collection problems.

The whole subject of factoring seemed like a very complex undertaking as I first embraced it. I soon learned that I could do it with little or no knowledge of my products, for the experts did not want me to do much selling or explaining anyway. I found that as a broker, I would be required to simply introduce the clients to the funding sources, and they had enough knowledge for everyone.   When I realized that, I then got very excited because I realized my ability to make money would be tied to my ability to market the concept to the public. This is my field of expertise.

A wonderful revelation then dawned on me. As I looked at funding companies while setting up a brokerage, I noticed that each of them specialized and there were many things they did not do. One did construction, another did big industry invoices, another did annuities and lotteries, another did viaticals, and another did mortgage notes. I realized as a broker, I could handle all levels and categories of factoring, and accept anyone as a client, if they were sincere to sell their payments, as long as I became an expert on which funder to direct them to.   So that is exactly what we have done at MFN Cash Flow! We are without limit on who we can serve, and if we do not have an answer or a source, we will find it out quickly. With the issue being settled as to funding, then the next issue was to work on keeping a steady flow of customers, and how we could compete with other brokers in the marketplace. Once we would attract good people, as marketers, how would we keep them and help them to earn money? We believe the MFN resell program and other products it offers are the solution to that problem. MFN provides a very rare source of diverse funders for people like yourself, a one stop shop where your job is quite clear and easy. Get them into us, and we get you paid. You do not have to be an expert, or spend great amounts of time in classes or seminars.

Factoring is like lending without a credit report. The borrower or payment seller is not receiving funds on their ability to re-pay, they are receiving funds based on the one’s ability who is making them payments. If they have an institution paying them payments, then that is a great deal for everyone and the funder will jump on the opportunity to purchase those payments. Sometimes, a private company or individual is selling payments being made by the government, and those are perfect factoring deals, for who is more reliable than the government?  (no comments : ) )

Let’s get right into questions and answers.

Question: When you locate a client, what do you do?

Answer:    You have them fill in the form at our site, or you fill it in for them, and the automatic submission to headquarters does the rest. This takes about 5-10 minutes of your time or the clients. Your name is entered and you receive credit for the fees made, permanently, as long as you are in good standing with MFN. At your option, you may also use the 5 question faxable form included here, which is even easier. Could anything be easier?

Question:   What kind of payment deals do you send in?

Answer:   Anything we advertise, and other kinds also. Let headquarters decide if we can help the client. That makes your job easy. If you try to qualify the deal yourself, you may turn down something we can do.

Question:   How do you get clients?

Answer:    At our ad copy page, you can see ads to run in newspapers. There are other ways. You may think up some, or you may go to sources like attorneys, loan officers, or accountants, and more.   What if you set up about 25 good attorney lead sources who feed you clients? Does your area run television ads and newspaper and yellow page ads for accident injury lawyers? I thought so. These people who you used to cringe about, now can mean money! They are valuable to us. The key is service and caring for the people they refer.

Question:    How much can you make?

Answer: You can really grow this large, and make hundreds of thousands of dollars in this business. Build a client database of referrals and make fee after fee from your daily efforts. We pay 40% of the gross to our referrers.  This can be enormous or small. We anticipate our referrers to earn quite a substantial sum monthly once they get going. It is a powerful home based business.   The key is to do the mail-outs to lawyers, and build the classified ad system up to a large monthly budget!

CURRENT PRODUCTS

Structured Settlements

A deferred payment or payment stream being paid by an insurance company to a claimant from the result of a personal injury accident, product liability accident or death benefit.

Annuities

A deferred payment or payment stream purchased for investment directly from a financial institution or insurance company, paid to an annuitant from the insurance company and owned by the purchaser.

CAT Funds

A payment being received from the result of a medical malpractice lawsuit due to a catastrophic injury that is being paid over a period of time.

Lotteries

Winners of all state sanctioned lottery, both assignable and non assignable.

Jackpots

Winners of certain slot machine jackpots.

Sweepstakes

Winners of certain contests (ex. Publishers Clearing House)

Royalties

A payment to an author or composer for each copy of a work sold or to an inventor for each item sold under a patent. Usually based on performance with a guaranteed minimum preferred.

Trusts & Inheritances

Sums of money due in payment form to a beneficiary and paid upon or after death.

Sports Contracts

Employment contracts between professional athletes and the team for whom they play.

Accounts Receivables/Invoices

Funds that are due to businesses for products or services, and these accounts are sold for advanced funds. The business owner can actually get pre-approved for a credit line on his or her receivables.

Viaticals

This is a very delicate product. A person with cancer or AIDS or a similar disease may actually sell lump sums of their life insurance before their death.

Mortgage Notes – Business Notes

Any collateralized note with real estate as the security, or with business inventories as security.

ADVERTISING

Newspaper

·        Penny Savers & Thrifty Nickels

·        Sunday Edition of a Major Paper

·        Weekly, Biweekly and Monthly Periodicals

·        Organization Newsletters

·        Magazines

·        Tabloids

Posted 4 x 5” Card and Flyers

·        Laundromats

·        Grocery Stores

·        Gas Stations

·        Mobile Homes Parks

·        Military Installations

·        Telephone Poles at busy intersections (Flyers)

·        Check Cashing Stores

Signs

·        Similar to a Realtors “Home for Sale” place at major intersections

Yellow Pages

Radio

·        Rush hour ads

Television

·        Cable

World Wide Web

·        Web Page

Referral Business

·        Chamber of Commerce

·        Toastmasters

·        Debt Consolidators

·        Attorneys (PI, Probate, Bankruptcy)

·        CPA

·        Mortgage Brokers

·        Financial Planners

·        Realtors

Sample News Paper Ads

Our first ad that we still use: (it costs very little and works)

Insert into the "Money to Lend" Section of your local classifieds!

Cash quotes for your insurance, lawsuit, settlement, annuity or lottery payments! Why wait for $$$? Call xxx-xxx-xxxx

(They may require the word BKR for Broker in the ad, MFN will provide a letter to you for any classified ad supervisors who wish to verify this as a legitimate business operation)

Other Ads!

GET INSTANT CASH !!!!

Creditors driving you crazy? Get cash now for your Insurance Settlement or Lottery Payments

$$$$ CASH NOW $$$$

Discover how to convert your Insurance Settlement or Lottery Payments into cash now !!!!

$$$$   GET CASH NOW $$$$

We buy payments from Structured Insurance Settlements, Lottery and Prize Winnings, Trust Funds and Inheritances Call ---------

WE GIVE CASH NOW

Behind in your bills? Get cash now for your Insurance Settlement or Lottery Payments!!!!

WHY WAIT FOR YOUR $$$$$$

Get CASH NOW for your Insurance Settlement or Lottery Payments!!!!!

Flyer or Index Card Advertising Examples*

To be placed on index cards and flyer

IS YOUR PERSONAL INJURY INSURANCE SETTLEMENT PAYING YOU $ OVER TIME WHEN YOU NEED THE MONEY NOW ???

WE CAN HELP BY PAYING YOU CASH

FOR YOUR FUTURE PAYMENTS

CALL (###) ###-####

Need cash? Does an insurance company pay you a monthly or annual payment from a personal injury settlement? We provide cash today. For more information, call (###) ###-####.

CASH TODAY FOR YOUR PERSONAL INJURY INSURANCE SETTLEMENT PAYMENTS IN THE FUTURE

If you are now receiving payments from an insurance company due to a personal injury settlement, you may be eligible to receive a large CASH ADVANCE to:

· pay off credit card bills l pay cash for land or other property

l        make an investment      l       pay for school      l     buy “peace of mind”

Call        your number goes here

* place at bowling alleys, Laundromats, trailer parks, parks, grocery stores, hardware stores, printing companies, churches, diners, etc.   Simply design a card that is printed and cut 4 ways.

Other Potential Products

       MFN will look at IGT (International

       Game Technology), Lottery (non-assignable & assignable),

       Matured Annuity Contracts, Royalties and Licensing Agreements,

       Business Notes, Commercial Notes, many types of non-real estate

       based cash flows.

Practical Points

Most factors do insurance settlements in mass because they are plentiful and easy to find. Other factors specialize in industry invoices and receivables, because they can find them easily and use an aggressive method of combination phoning and letter writing. These two are good areas to focus on as a staple income producer. If you go after these, you will find all the other kinds of payments over time.

Insurance Settlements

Develop a letter or postcard system to attorneys that lets them see your ad and phone number routinely. You will begin to get referrals from them.   They really want their clients well cared for, but it really makes no difference who they send them to. Just do a professional letter or postcard. Spell everything correctly.

Here are potential wordings for you to use on a postcard.

“Let Us Get Your Clients Cash for Their Payments!”

“A Happy Client Is One With Cash In Hand!”

Attorneys are people too, and you will wear them down and they will refer to you. Just keep your phone number in front of them.

We have a sample letter you may use also. Send them this letter, then just send a postcard after that routinely. Just retype it in WORD and insert your information. See the next page.

SAMPLE OF LAWYER SOLICITATION LETTER

(STRUCTURED SETTLEMENTS)

1/15/03

<0Company>

<1Contact>

<2Address_1>

<3Address_2>

<5City>, <6State> <7ZIP>

Dear <14Salutation>:

The purpose of this letter is to acquaint you with MFN Cash Flow and how your clients or yourself may benefit from the services offered by my company. We are in the unique business of purchasing future cash flows that are generated from structured settlement annuities. Most lawsuits are settled by providing plaintiffs with annuities that make payments over an extended period of time.   Through our program your clients can receive lump sum payments to meet current personal or investment needs.

In some cases, attorney fees are also paid over time. We can provide you with cash now for these future payments. We have no maximum transaction amount and all transactions are handled in a most professional manner.

Should you have any further questions or if I can be of assistance, call me at the number on my enclosed business card. We would be happy to discuss any situation and provide you with a quick quotation.

Sincerely yours,

<1Contact>

Steps To Proceed In Marketing Cash Payments With MFN

You may send us clients and be paid on them. The amount can be quite large.

1) Here is the website to see how this service works. You may fill that form out for them. The form is more directly linked below. It takes just a few minutes, but can result in a nice commission for you. The commissions take about 60-90 days to receive.

2) Not every referral will result in a commission. Be careful about thinking that way. The best way to market this is to network with attorneys. Send the introductory letter above to them, and then use a postcard system to them every month or two to remind them. Set up 20 to 50 attorneys in a label database, so you can easily remind them. After 3-4 months, you will have a powerful referral system going.

3) You may run the ads, in your area, but be prepared to get many calls from people you cannot help, who need cash in 3 days, or have an incomplete lawsuit going on, or any other reason. These ads begin to produce well because of word of mouth, but you must run them for 3-6 months straight. That is why we recommend you network with attorneys first, as a launching, since it costs almost nothing except a little printing and postage. Come in right behind the attorney letter with an ad campaign.

4) Guidelines for referring: They must have a done deal, not beginning in 2 months, but a real and already started cash flow. You save them until they start, and then refer them. If they get Workman's Comp, do not refer them. This has all but been thrown out of the cash flow industry due to some court decisions where factors lost huge monies. You cannot help any persons selling WC payments. Every other cash flow, we can help. Tell people when they are referred that they will be called within 24 to 48 hours by people who are prepared to pay cash, and make a deal. The cash is of course, discounted, and most payment sellers know that. People often sell just a portion of their payments, but come back over and over because they spend the money. You will receive the commissions at any time in the future also, as long as you are in good standing with MFN.

5) The right to resell this service and make money is based on the fact that you read this e-manual and

6) Use this URL to fill out the form for clients!

Fill Out Our Form For Cash Flow Quote!

7) If you are at home, or on a cell phone and cannot access a computer, you may ask these questions below. Paste and print out the form here. Fax this sheet to us at MFN at 916-543-3102. If you fill out this form, you have done your referral job well.

THE FIVE QUESTIONS

MFN Referrer's Name_______________________ Phone _____________________

Email address _______________________

Client's GENERAL INFORMATION

Client Name: ________________________________________________

Address: ___________________________________________________

Phone Number: ____________ Best Time To Contact: _______________

1) Is Your Client Employed? YES NO

2) What Does Your Client Need the Funding For?

__________________________________________________________

__________________________________________________________

3) What Are the Exact Dates & Amounts of Each Payment?

___________/Month From: _____________ To: ________________

LUMP PAYMENTS

$: ____________________________ On: ________________________

$: ____________________________ On: ________________________

$: ____________________________ On: ________________________

$: ____________________________ On: ________________________

$: ____________________________ On: ________________________

(Start & End Date of Guaranteed Period: _________________________)

4) What Insurance Company Is Issuing the Checks to Your Client?

________________________________________________________________

________________________________________________________________

5) Is Your Client Shopping For Other Quotes? YES NO

Additional Notes:

___________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

_________________________________________________.

Just sit back and watch the checks come in!

MORE FREQUENTLY ASKED QUESTIONS

Experience & Expertise

1. How do I find prospects/clients? Can I go to the courthouse to do research?

Advertising! Advertising in any way you can. Run ads in newspapers, solicit attorneys by sending letters, constructing websites (ask about our website program), and by using our flyers. We provide many different marketing ideas and materials. Advertising is most important in this line of work.

Going to the courthouse and doing research is very time consuming. Most Structured Settlement marketers that have gone this route felt they had wasted too much time and they did not get anywhere.

2. How many ads should I place when I start advertising?

The amount of ads will depend upon your budget and how much money you allow for advertising.

We suggest advertising in local papers such as “Penny Savers & Weekly Periodicals”. You must be prepared to run the ads at least three to four months. This is not a get rich quick scheme, commitment is key.

3. How much money should I invest in advertising?

The amount of money totally depends on you and your budget. An average consultant spends $300 to $500 a month. The experienced consultants spend $3,000 to $10,000 a month. This is something you can grow gradually.

4. What do I say when I get my first phone call?

Your priority is to make your client feel as comfortable as possible while talking with you. You are aiming to meet an important and difficult need in their life and you want them to feel at ease. Then all you have to do is fill out the online form or the faxable Five-Question Worksheet (included in this package). Let your client

know that your cash contact will be calling them to explain how the process works and discuss the options available.

5. How long does it take for the customer to get funded?

Funding can take anywhere from 2 to 5 months. Once we receive all the preliminary documentation, the file is sent out for a court order. Problem deals and difficult companies can take longer. Anyone who says they get it done sooner is telling you what you want to hear.

6. How am I protected in this deal?

Our policy on consultant protection is the first consultant to put us in contact with the customer gets the deal. We protect you on that deal for as long as the annuitant has payments to sell. In other words, if your name is on an annuitants file and the client comes to us at a later date to sell again, you will still make money on it. We at MFN depend on consultants for our existence and have an invested interest in your satisfaction.

7. When do I get paid?

Consultants are normally funded when their client is funded, and MFN receives their fees.   Your check then is almost instantaneous. U.S. residents must have a SSN on file with us.

Loan officers and mortgage brokers are another source of structured settlement referrals. Here is a letter you may paste and modify to customize it to you.

SAMPLE MORTGAGE CONSULTANT LETTER

Your Logo Here

Tuesday, October XX, xxxx

Name

Company

Address

Dear,

The accompanying information relates to a profitable opportunity in the

structured settlement cash flow business. MFN Cash Flow has designed

a program for mortgage consultants to generate additional revenue with a

minimum commitment of resources.

All you need to do is locate the holders of structured settlements from

personal injury lawsuits and contact us with the preliminary information. You

will find these prospects among your regular mortgage banking clientele.

These structured settlements can be converted to a lump sum of cash for

your customer, enabling them to:

· Raise additional money for a down payment

· Reduce credit card debt to better qualify for a home mortgage

· Generate cash for property improvements or a major purchase

All you have to do is ask the question: “Are you receiving payments from an

insurance company as part of a personal injury or other lawsuit you have

settled?” If the answer is “yes” and the customer wishes to pursue

converting the income stream to a lump sum, simply call me.

When you speak with your prospects and believe you have a product of

interest, just request a copy of their settlement agreement and/or annuity

contract. Fax this information to me at xxx-xxx-xxxx.

What you are committed to achieve, combined with what MFN offers, provides

a great formula for increased income and business success. I look forward to

working with you.

Sincerely,

We will be routinely training our marketers in this industry on an ongoing basis. You may also email us at MFN with questions, mfn1@comcast.net or call us at 916-258-3043 9-5:00 PM Pacific time.