Episode 114: How to Get Paid Quickly, Get Paid More, and Get Paid More Often

Mike O'Neill: Welcome back to the Get Unstuck and On Target podcast. I'm Mike O'Neill with Bench Builders, and we help companies solve the people problems that are slowing their growth and hurting their profits. Joining me today is Todd Aaron. He's the founder of Numerus Capital. If you're a professional service provider, you're gonna find this episode of particular interest.

Numerous capital understands that your potential clients want to obtain your high ticket professional services or products. They want 'em now. But they might need some help overcoming budgetary constraints. It's Todd and his team who offers their clients a new way to purchase your high ticket professional services and products.

And they do that by fighting a, an affordable, fixed monthly payment plan without having them make any upfront investment. This is a topic I've never have had a guest on, and because I've never had someone who has expertise like Todd until today. Welcome, Todd.

Todd Aaron: Hi there, Mike. It's a pleasure to be with you today.

Mike O'Neill: So let me elaborate a little bit for those who know. As host of this our business is in the service sector. We sell services. Some of the services we sell are high ticket items. What caught my attention about you is that you are doing something that listeners might not even realize could apply to them.

We know that you go to certain places, they offer financing. But what you've opened my eyes to is that you could make available financing to a wide variety of industries, people who are selling services and products, and the list is pretty long. Am I correct that you are a third generation of offering financing services to clients.

Todd Aaron: Yes, That's correct. So in 1932, my grandfather had eight or nine radio stores, the depression hit and he closed up shop. He saw how well people paid during bad times, and he thought the result would probably be better in good times. And so he began buying other companies receivables and collecting on them.

And then my experience is that as a third generation owner operator of a consumer finance company I ran that business with my father for 22 years. My father had the privilege of running the business for 55 years, both with myself and my grandfather. And today we essentially do the same thing that, you know, we did back in 1932, just with more bells and whistles and more IT technology.

Mike O'Neill: It's so unusual to talk to somebody who is third generation of a business, but a third generation of a business that has changed dramatically. You mentioned technology. How has technology helped you and your company, Numerus Capital, what doors has that opened for you and your business for clients?

Todd Aaron: Well, it's made the business scalable. Our company was, Great American Finance Company, was FinTech before the term was coined. And we built a 2 million plus loan origination system that automated all of our credit application inflow. As well as putting algorithms against the credit department to standardize our credit offerings to our customers and got us to a point where we were providing as many as 3,500 credit application decisions a week.

Mike O'Neill: Goodness. So could you provide some examples? The first thing we're gonna be talking about is the service that you offer, which would be customer financing. We'll probably get into some other services, but kinda set the stage, the scope of kinds of folks that you can help. What are they doing? And gives us an idea of the range that could ever very well be.

Todd Aaron: Sure. So at Numerus Capital, we look for businesses that are in need of customer financing as an expansion to really unlock their full sales channel and capability. What we know from experience is the cash sale is typically less than the finance sale, and finance sales on average are approximately 30%, 35% higher than cash sales.

And so, just the way you have folks in the real estate industry. That are providing mortgages so that people can buy homes. And likewise you have lenders in the auto industry so that car dealerships can take loans on cars and people can purchase those cars. We know that offering customers terms to make payment be it, you know, 12 months, 24 months, 36, 48 60, 72, 84, et cetera.

All lowers the payment, makes it affordable for customers and allows both the merchant and the customer to match their monthly payment to their budget and purchase either high ticket professional services or goods

Mike O'Neill: I got you. So for our conversation, just so I can kind of keep a sense of focus, I'm gonna be thinking that the listener might own a business and that some of their services would fit that definition of kind of a high ticket purchase and that there may be a well-qualified person who wants it, but simply can't afford it. And this is really giving a service provider something they may never had before. And that is, would you be interested in possibly financing this? Help me with the verbiage if a provider like myself. As you know, we do coaching and training, and if we're talking to a client who owns a business and they say, oh, I really wanna do this.

I want to do it now, but how would that conversation take place? How would I engage that potential client to make known of the availability of Numerus Capital?

Todd Aaron: Yes, that's a good question Mike, and the answer to that is in dialoguing with the customer, every customer that, or every prospect that is essentially shopping with a merchant has some level of interest in converting and becoming a buyer.

And so what the merchant or the business typically finds out is that the customer has the resources to make that cash purchase, or they've got budgetary constraints that are keeping them from making that purchase with you today. Or with any business. And the whole idea is about accelerating the sales cycle time for people.

And by offering customer financing to customers, it will accelerate that sales cycle and it will overcome the conversation that businesses have where they find out that there's a budgetary constraint or there's sticker shock preventing the conversion of that sale from somebody shopping to somebody buying.

Mike O'Neill: You provided me some information that kind of listed the types of companies, the kinds of services that have taken advantage of this, and it's very far ranging. Can you list just off the top of your heads, the types of folks who have said by making Numerus Capital available what would that include? Beyond the obvious?

Todd Aaron: Yeah. So. Our abilities extend to financing both high ticket professional services as well as high ticket professional goods.

So it could be a furniture store where people are making their purchases. If you walk in and somebody wants to buy an appliance or a bedroom set or what we give particular focus to is the professional services world. So it's not uncommon that we could be supporting a law firm, a CPA firm companies that are doing tax preparation work, people in the coaching and consulting industry.

So, situations where there's not hard collateral behind the loan, unlike a mortgage where you have the real estate or a car where an auto loan, where you have the car behind it we have a team of lenders that we have the ability to process credit applications through that are willing to look at essentially no collateral loans that are based strictly on the personal credit of the individuals trying to make the purchase.

Mike O'Neill: Gotcha. I don't know if this is relevant or not. I was in the dentist chair yesterday. What brought me there was tooth pain. They worked me in, I had the dental appointment and he said, Mike, I hate to tell you this, but I think you're gonna need a root canal. Now I can do a root canal, but you probably don't want me to do it.

You probably want a root canal specialist. Would you be interested in seeing if we can get you in to see that specialist? Now, bear in mind I had literal pain and I've said, of course, I was so fortunate they got me in that day. This was yesterday. I'm in a second chair. And sure enough they came and the, is it endodontist ?

I'm not sure that's the right term, but they did all the things, the x-rays and sure enough, Mike, yes, you do need a root canal. When would you like to do it, And my, of course, my response was, can you do it now? Because I was then and still am in a little bit of pain. The reality is they're gonna do it tomorrow, but they basically said tomorrow, we need you to be able to pay this amount.

And they didn't really give any payment plan options. If we don't have dental insurance, you gotta pay basically cash on hand. And in this case, if you want your tooth to stop hurting, you gotta put up $1,500. I'd be kind of curious. They have a captive audience. You, your mouth hurts, you've gotta get it fixed.

I suspect most people figure out how to make that happen, but it just occurred to me, knowing that you and I are gonna be recording this podcast today is, I'm just kind of curious if they had that offer available, would that give their patients a little more peace of mind that I don't have to put all this money up front.

Todd Aaron: Absolutely, and that's a great question, Mike. And so what happens in that situation? Like you've mentioned, they've got the customer right there, the customer, you know, is looking for a way to, you know, to buy those services and solve that problem. The customer has the, if they have the availability, they can pay by cash.

If they don't have the availability, they may turn to their credit cards or what makes the financing very compelling is that in many cases, people don't wanna put the expenses on their credit card and use up or exhaust their credit card availability. And so they will utilize customer financing as an independent source to make the purchase and receive the professional services.

For us we have access to a FinTech platform with 35 plus lenders on it. And those lenders will service the entire FICO range score. So, They will provide financing to the best FICO score customers. And then there's also several subprime lenders. On the platform. And then there are what we call, and we refer to those as second look lenders.

And then there are what we call tertiary or third look lenders, which will charge a higher discount rate but will essentially approve a hundred percent of the applications. And so, It's incredibly valuable to merchants and businesses as they go to monetize their entire foot traffic of customers that are segmented by credit worthiness.

Mike O'Neill: One thing that kind of caught my attention is, I'm just gonna interject myself into that. So if I had a prospective client who. I want to do business with you. I would like to take advantage of your resource through your friends at Numerus Capital, but once that's handed off to them, it's pretty much between them and your firm and your platform.

But when approved with the assumption is they'll be approved. That means that me, you call, you might call me the vendor, but I would get paid immediately

Todd Aaron: that's absolutely correct, so...

Mike O'Neill: which is important to know, and that is, rather than payment plans, it gets me out of the invoicing business. And I get my money upfront if I could be so brazen in how I said that.

Todd Aaron: That's correct. And so, we have access to both this lending platform as well as lenders that we have built up and become familiar with over the tenure of our experience in this vertical. And so we have specialty lenders in different servicing different industries. And so, we have dental lenders that focus specifically on the dental industry.

We have lenders that focus on periodontics and doing dental implants and other more complex and costly procedures. And so we can generally find a fit for every merchant's business for the type of product or service that they're selling. And what we know to be the case is that selling on monthly payment overcomes that sticker shock, and it allows for maximizing the customer's purchasing power.

So, if you were to consider, know, dental procedure and it was an amount in excess that you have money to cover we could find a lender that would put a program together with the business to make those procedures happen like clockwork when the customer has a budgetary constraint.

Mike O'Neill: You know, we've talked about the, I guess you'd call it consumer finance and how this can be broadened far more than I ever realized. And that's one thing I wanna make sure that our listeners were aware of. This being a vertical for your business, you've got to know the vertical, and that is for those businesses that accept credit cards I think you've referred to it as zero cost credit card processing. Can you tell us what that means?

Todd Aaron: Yes, absolutely. And I'm gonna step back for just one brief moment to talk about the sales finance. Of professional services or purchase of goods. As you mentioned One of the solutions that it offers or the benefits that it offers, is that it extricates the business or the merchant, you in this example, from being in the billing and collection business which is really critically important because it returns that core competency time back to you to perform more procedures. Or sell more goods as opposed to the being in stuck with the administrative overhead of billing and collecting.

And it also does something very important for you, which is it de-leverages any risk that you have in carrying those receivables yourself. So the finance programs, many of them can be set up as non-recourse back to a business so that if a borrower fails to pay and defaults on the loan. There's no recourse back to the business as you've been paid upfront.

And so that's vastly important to many of the businesses that, you know, we interact with. They want to be paid for the services or paid for the goods, and then they wanna be done and have nothing to do with the collections. So on the revenue side with the revenue lever sales, finance and providing customer financing to businesses is critical to increasing sales and maximizing your sales as it typically drives a higher ticket purchase.

But then on the expense side of the ledger, we also do credit card processing deployments, and they can be done in two different ways. They're either done with standard credit card processing where the merchant incurs the fee for accepting payment by credit card. Or we have great affinity for deploying what we call zero cost credit card processing or surcharging services where that fee to accept payment by credit card is passed on to the customer for the election of making payment by credit card.

And in this respect, there are always free channels for that customer to make payment to a business or a merchant which will include paying by debit card or ACH or paying by check. But if the customer wants the business, in essence, subsidize their frequent flyer miles or their cash back miles, that high cost of credit interchange fees will be paid for by the customer. It typically amounts to three and a half percent that's passed back to the customer. And it changes that whole value proposition for the merchant. So here to four, if they've been utilizing standard credit card processing where the business or the merchant encouraged the fee to make payment by credit card.

The value proposition is sell a hundred dollars, keep 96 to 98 cents on the dollar because of the cost of those interchange fees. And with the zero cost credit card processing, it flips that paradigm to become, sell a hundred dollars, keep a hundred dollars for all payments made by credit card.

Essentially what it does is it waterfalls that two to 4% of the interchange fees back to a business's bottom line with the value being that it either puts more money in the owner's pocket. Alternatively, it can provide that owner with those additional resources to make additional capital investments into their business, or hire more staff to grow sales.

So with the compression, you know, from the pandemic on profit margins, it's a great way to kind of level the playing field and, kind of, plump up your bottom line by no longer incurring those fees to accept payment by credit card.

Mike O'Neill: I got you. As we've been talking and we've talked through a variety of potential scenarios, you've already pretty much answered this question in part, and the question is, could you share examples where either you or a client got stuck and how did you help them unstuck? So you've already kinda shared with us, in part, it could very well be that the client has folks that they wanna do business with, but those people just can't afford that high ticket item. So I see you, you're making that available from a financing standpoint. And you've also pointed out the value of looking at credit card processing and that there are some options.

What might be some other ways that you have helped yourself or helped others get unstuck?

Todd Aaron: Yeah, so that's a great example. It comes either proactively or reactively in for both sales, in the sales, finance, customer finance world, as well as the credit card processing world. Typically the in the arena of providing customer financing either.

Somebody, you know, somebody's got a sale, they've got a buyer but the buyer needs financing to close that sale. So reactively people will find us and we'll jump in and get them onboarded with our lenders. and they'll receive, you know, on our lending platform, the platform will deliver anywhere from an approval, anywhere from a couple hundred dollars up to a hundred thousand dollars, anywhere from like a one year term up to a seven year term.

And so reactively, we will sometimes be called in to solve, like, burning issue where there's a business or a merchant and they need the financing to close the sale. , alternatively we do a lot of, you know, soft selling with prospects where we put in their minds the full capabilities that we have to offer financing.

In some cases it can be providing same as cash options or no interest financing for periods of time. Or it can be about getting them a better deal with lower terms, lower APRs longer terms, et cetera, financing. And so we're constantly talking to companies about how to improve their financing stack with the lenders that we can bring to the table.

And then the zero cost credit card processing or the standard credit card processing is really like a the sister component or the second side of that consumer finance coin. It's really the same conversation that we're having, whether it's increasing a company's sales or eliminating or reducing their expenses.

Mike O'Neill: You did a really great job of kind of summarizing how those two, what on the surface might appear to be unrelated, how they very much are complimentary. And so I, I appreciate you kind of walking us through how that can help your clients or help the customers of your clients come out ahead.

That's pretty cool. You know, Todd, we've talked about. Some pretty technical stuff here, but as you kind of look back on this conversation we've had today, what do you want our viewers and listeners to have as takeaways?

Todd Aaron: You know, that's a great question, Mike, and I think that, I think the best answer on the sales finance side is that offering customer finance Can be done for virtually any type of business and it's critically important. There's no reason to be out in the field or the, or in this space doing business and not having both clubs in your bags. The club where you can close a cash sale and the resources available to sell on financing terms to your customers. We know it increases the sale. We know that it expedites the sale.

We know that it de-leverages risk off of the business or the merchant, as well as eliminates the overhead of billing and collecting. If I could get any one point communicated to your listeners. In respect to the sales finance, it's really that offering customer financing allows you to generate more leads.

With that, you're able to tag your advertising with it so that you're maximizing your return on investment for your advertising spend. It lowers your cost of customer acquisition as you're able to close more sales. And that closing of more sales is what's key. So if you have both resources available to you, you know, There's no good not using both.

You wanna be able to service the customers, kind of like Baskin Robbins' 31 flavors. If they wanna finance you wanna be able to satisfy them. If they wanna sell by cash, on cash terms, you wanna be able to accept those payments. And likewise, in the credit card merchant processing world we're constantly doing free cost savings analysis for businesses.

and we evaluate what the costs are for them with their current incumbent credit card processor, and then we'll do a side-by-side comparison for free, which will showcase what the cost would be if they run standard credit card processing programs through us, or if they, what the cost savings would look like if they offered the zero cost credit card processing to their customers.

And so we've been able to In many cases, lower the standard credit card processing costs for a business. It can be up to 30, 40, 50% depending on how they're set up today. And in the sales finance world we've been able, you know, oftentimes to increase company sales by more than 35%.

Mike O'Neill: Wow.

That's significant. I know we started this podcast by pointing out that the topic that we've just discussed can get technical pretty fast, but I also know that you've got resources to explain things, particularly your online resources with your website. Todd, if folks wanna learn more about what is it we've been talking about, what is the best way for them to reach out to you?

Todd Aaron: So the best way for them to reach out to me, Mike they can always reach me on my cell phone at (312)-953-1769. They can get me at on email at todd.aaron@numeruscapital.net. That's T O D D . A A R O N the @ sign, and then N U M E R U S C A P I T A L . net or they can visit www.numeruscapital.net.

Mike O'Neill: Good. We're gonna include all of those contact informations in the show notes, so if you're driving, you said, I didn't get that number. Don't worry about it. It'll be in the show notes. Todd, we met in a community, whereas I was made aware of your services and I think someone introduced us and said, know, Mike, you're in the business that maybe Todd can help.

That's how you and I started this conversation. I've learned a lot from spending time with you today. Thank you for sharing your expertise.

Todd Aaron: It's my pleasure.

Mike O'Neill: I also wanna thank our listeners for joining us today. If you'd like to subscribe to this podcast, simply type unstuck.show in your browser. This will give you access to all the major services, including Apple, Google, and Spotify.

But while you're there, you can also subscribe to our weekly management blog called The Bottom Line. So if you are a business leader and you're trying to grow your business, but people problems have slowed you down, let's talk head over to bench-builders.com and schedule a call. I wanna thank you for joining us, and I hope you have picked up on some tips from Todd.