Referral Programs for Small Businesses – Understanding the Benefits
As a small business owner, you may have done research on or taken advantage of the funding options offered by alternative finance providers. During the process, you may have heard some mention of referral programs but dismissed it because you thought it didn’t apply to you. However, you don’t necessarily have to be a banker or lender to participate in referral programs for small businesses. Many alternative lenders welcome referrals from small business professionals such as lawyers, accountants, business consultants, and more. If this piece of information piques your curiosity, it’s time to learn more about how your business could benefit from one of the many referral programs for small businesses.
It can be disheartening to watch one of your clients or business colleagues struggling to obtain funding. Whether you’re a lender that’s unable to provide traditional funding or a small business professional who has a client seeking funding, referral programs for small businesses can be the perfect solution. Not only do you get the satisfaction of helping your clients get the funding they need but participating in a referral program can provide you with a few other benefits as well.
For business professionals outside of the banking industry, helping clients obtain funding may be outside of their normal services. However, going the extra mile can go a long way in cultivating customer loyalty. Customers that feel you are truly interested in their success will not only continue to do business with you but they can become your biggest advocates. Positive word of mouth and online referrals can increase your customer base and boost your brand awareness. By participating in referral programs, you are investing in growing your own business as well as your client’s business.
One of the most obvious benefits of taking part in an alternative finance referral program is getting paid. Commission structures may vary depending on the provider but commission on referrals to alternative finance companies can provide additional income. Even though the Idea of earning a commission on referral sounds appealing, some business owners are leery of partnering with an alternative financing provider, fearing it might become too involved and take time away from their own business.
Types of Referral Programs
The truth is that with most referral programs for small businesses, you can choose the level of involvement you’re comfortable with. There are three basic types of referral partnerships. The first is simply making referrals. This can be the best option for those business owners who want to help their clients get funding without having to take time away from their own business.
The next level of referral program would be an ISO (Independent Sales Organization) program. With this type of program, you work with the alternative finance provider to sell your client the appropriate funding solution and deliver the completed funding agreement to them. While this is a bit more involved, it pays a larger commission.
The third and most involved type of referral plan is platform partnerships. These programs are primarily aimed at banks and allow them access to the alternative finance provider’s application processing software. If the application doesn’t meet the bank’s criteria for approval but does satisfy the provider’s requirements, they pay a fee to the bank and silently provide the funding. The client gets the funding they need, the bank retains the client, and both the bank and the alternative funding provider generate revenue for their respective businesses.
Capflow Referral Programs for Small Businesses
Now that you understand the different types of referral programs for small business and their benefits, all that’s left is to choose the right alternative funding provider to partner with.
Capflow Funding Group is an alternative finance company specializing in factoring. Our referral program is open to businesses or professional individuals as well as banks. If you have business customers who require financing that falls outside of your services and think we could help, contact us today. Let’s work together to get your clients the small business financing they need.