What is an MCA Platform? How can it help your MCA Company?April 06, 2023
The MCA market is expected to reach $26.3 billion by 2029. This clearly indicates a growing dependency on SMBs on merchant cash advance loans over traditional banks. However, the rapid growth of the MCA industry brings along some unique challenges, such as managing a larger amount of leads, accurately handling the underwriting process, and providing a better customer experience.
Therefore, opting for an MCA platform is a must to streamline these processes and stand out in the market. An MCA platform has a comprehensive suite of features that can help merchant cash advance companies manage their operations with a decreased chance for error.
It reduces manual tasks by automating your internal processes . In this article, we’ll delve deep into the concept of an MCA platform and how it can help overcome the challenges related to growing as a merchant advance provider.
Features Of An MCA Platform
Here are some of the best MCA platform features to help you speed up the loan allotment process:
- Application (Lead) Management & Processing
Due to the high approval rate, MCA companies receive hundreds of loan applications daily. While it’s a great scope for a company to scale up, it’s difficult for human moderators to review all applications and decide their creditworthiness while still providing fast responses to clients and ISO’s the industry is known for. Over time, these factors may increases the chances of missing out on funding opportunities. This is best summarized by Ricky Bobby from the movie talladega nights “if you aint first, your last” .
This is why large funders heavily rely on an MCA platform to review large numbers of deals at a fast paste e. Managing and processing applications is one of the core features of a Merchant Cash Advance CRM. By using advanced algorithms, an MCA platform can automate and simplify tasks like initial data gathering to making the funding decision.
- Underwriting & Risk Assessment Tools
Most merchant cash platforms integrate an underwriting and risk assessment tool to assist MCA lenders with better decision-making. Manual underwriting is a tedious process. For instance, if an MCA company receives 100 applications per day, and a single underwriter is responsible for reviewing them all, you can imagine the pressure they will go through. Besides,
The automated underwriter integrated in an MCA platform takes 90% of the workload off the human underwriter’s shoulder and makes the process a lot faster. The tool is designed to review the incoming applications against the set guidelines of each MCA company and decide on creditworthiness in an instance .
The human underwriter can perform a final review of a potetial deal and can even check intricate data sets against specific odds to arrive at the final decision.
It’s complicated for humans to predict the risk of lending to a particular borrower and make calculative lending decisions. But most MCA platforms include a risk assessment tool which can identify and analyze specific problems the borrower’s industry faces to assess the lending risk, chances of loan recovery, and more. Such extensive data helps MCA organizations make better lending outcomes .
- Funding Management & Disbursement
As stated, an MCA company must handle a lot of data in a short amount of time. Even the slightest discrepancy in this data, especially when it comes to funding management and disbursement, can create a big stir in the company.
But an MCA platform can save you from such data discrepancy because it has a robust system to synchronize data of all borrowers. The tool helps ot create separate profiles of loan seekers where every little detail, such as lending amount, return period, credit history, etc., are stored. And any team member can access any borrower’s profile with a couple of clicks.
This is a pivital tool when it comes to managing funds and disbursements. Also, with this system in place, nobody can easily annotate the data; hence, the chances of missing or misleading information are greatly diminished t.
- Customer Relationship Management
Customer relationship management is one of the key features of a merchant cash advance platform. This feature helps companies manage customer interactions, track customer behavior, and provide instant help to their queries to improve the overall customer experience.
An MCA company usually has a large customer base, and tracking down the journey of each customer while answering their queries manually will lead to inefficiencies. An automated tool makes the procedure a lot easier and faster, helping companies retain customers by improving customer communication .
- Reporting & Analytics Tool
To survive in the competitive MCA industry, companies need to transform crude data into usable and useful metrics to take action accordingly. MCA software integrates reporting and analytics tools to allow companies to track and analyze key business metrics such as customer acquisition and retention percentage, revenue, risk factors, and more.
These insights can help an MCA company to make data-driven decisions and optimize its business process..
- Integration With Other Financial Software
An MCA platform is a highly flexible tool that allows easy integration with other financial software like payment getaways, accounting software, and similar tools to help streamline financial operations and reduce manual labor as much as possible.
Please note that not all MCA platforms include these features. But, these are crucial to run your MCA company seamlessly. Therefore, while looking for MCA software, make sure to enquire about these features.
How Can An MCA Platform Help Your MCA Company
In the age of automation and AI, relying solely on manual operations would be a huge mistake, especially when it’s a data-centric business like the merchant cash industry. Therefore, switching to an MCA platform is a must to achieve the company’s goals and build a profitable business.
An MCA platform can help you achieve your business goals through the following benefits:
- Improves Productivity & Efficiency
When human operators take care of the entire process, from setting guidelines and checking applications to coming to the ultimate lending decision, it becomes a very tedious process. Most MCA companies use siloed applications, and there is a high probability that different departments are re-entering the same information multiple times.
For example, the sales team uses application information to track down the entire sales pipeline, and once they make a sale, the same information is re-entered as customer data in the accounting system. The same process is likely to be repeated again by different departments.
An MCA tool integrates these systems and eliminates the multiple data entry system. The software enters the data once and correlates across other applications. This is how an MCA platform can improve the productivity and efficiency of the team.
- Enhances Customer Experience
Due to the overwhelming response MCA companies receive, it becomes difficult to respond to the needs of each customer. This can lead to a great void in increasing the company’s customer base.
An MCA platform can fill this gap by allowing businesses to personalize their communication with customers. The software can quickly filter out customer queries and allow you to respond to them considering their preferences, purchase history, etc. Such responses initiate a personalized feel helping companies build a loyal customer base.
This tool also helps businesses to set automated workflows that trigger action based on customer behavior. For example, if a potential customer is constantly checking up on the company policy, the software will send them personalized emails, converting them into customers easily.
- Better Risk Management
An MCA CRM prevents loss to a great extent by utilizing better risk management analytics. The platform can analyze the potential risk of lending to a certain borrower by reviewing customer account history, the market size of the borrower’s industry, the amount to be lent and the interest rate, etc.
MCA companies can use these metrics to make informed decisions and form risk mitigation strategies.
- Faster & Appropriate Underwriting
As part of the MCA industry, you’re well aware of the long underwriting process and how it can slow down the entire lending process. We can’t blame human underwriters for this because they are handling the strenuous task of verifying customer data, which takes time.
We have already discussed how an automated underwriter speeds up the process to help MCA companies make faster and more appropriate lending decisions that work in the company’s favor. The automated underwriter helps with quicker and more appropriate underwriting to maximize growth.
How To Choose The Right MCA Platform For Your Company? Points To Note
The MCA platform can greatly impact your business’s financial health, so choosing the right tool is crucial. The following are some points to consider while choosing the MCA CRM platform to get the maximum benefit out of it:
- Reputation & Credibility
Look for an MCA provider with a proven success track record and a good customer base. Research the provider’s history, ask for references, and also check online reviews. A good reputation reflects the credibility of the platform.
- Look For Analytics, Reporting & Other Tools
Enquire whether the tool provides all required tools or not. In-built reports and analytics tools are essential to use the MCA platform to its optimal level. You want the tool to work on multiple areas of your MCA company, such as accounts, loans, customer relationship management, etc. Hence, it has to come with these integrations.
- Flexibility Of Integration
Flexibility is another crucial aspect of the MCA platform. You may need to integrate it with the finance software, and rigid software will create complications. Ask the provider about integration facilities with other third-party software.
- User Interface
The user interface of the MCA platform should be such that it allows even employees with little technical knowledge to run the software easily. They should be able to maneuver through the software without crude technical knowledge.
An MCA platform helps a merchant cash company to handle customer data, improve customer experience, and make wiser lending decisions. Therefore, deploying an MCA CRM is crucial for every MCA company to progress in the business.
If you haven’t shifted to an MCA platform yet, it’s high time you do so. It will save your company from missing out on leads and grab every possible opportunity.