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Show Summary
In this episode of the Real Estate Pros Podcast, Kurt Crandell shares his extensive experience in merchant lending, discussing how he transitioned from the mortgage industry to helping business owners access capital. He emphasizes the importance of integrity in lending practices and the unique approach of his firm, AFG. Kurt addresses common misconceptions about credit scores and loan applications, providing valuable insights for entrepreneurs seeking funding. He also highlights the significance of preparation before approaching lenders and offers resources for those looking to improve their financial literacy.
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Investor Fuel Show Transcript:
Kurt Crandell (00:00)
I have a lot of people, especially my real estate agents, you know, they think that because they’re a real estate agent and their licensing is in their name, that they can’t have a business. They think that they can’t have a business account. And that’s where I, you know, dig into it in more detail in the book. but you know, let’s say that your licensing is to like, my name is Kurt Crandell, you know, well, if I’m a certified, you know, financial fiduciary, it’s to me personally.but there’s nothing stopping you from becoming Kurt Crandell LLC,
Kristen (02:01)
Welcome back to the Real Estate Pros Podcast. I’m Kristen and I’m here with Kurt Crandell. Kurt has been starting companies since the 1980s and is still an active entrepreneur. As the vice president of funding of AFG, a firm specializing in merchant lending, he helps business owners access the capital their company requires. His new book, How Merchant Money Works, is out on Amazon and Apple Books now, and he’s teaching people how to unlock the mysteries of merchant banking. Thank you for being here, Kurt.Kurt Crandell (02:29)
My pleasure, Kristen. Thank you for having me.Kristen (02:31)
Amazing. Well, tell us a little bit about your background and how you have gotten started in this industry.Kurt Crandell (02:38)
⁓ I started in the financial industry, unfortunately, back doing mortgages. My cousin owned a mortgage firm in Michigan. And after taking that position, I very quickly saw the writing on the wall of what it is they were doing. And I told him, I was like, I’m sorry, but I can’t be a part of this. you know, and then obviously the collapse happened and, you know, I had friends making a ton of money, but my integrity.needs to remain intact. So I literally refuse to be a part of the bubble that crippled the nation.
Kristen (03:14)
Absolutely, so then you got started in kind of this line of work, merchant lending.Kurt Crandell (03:20)
That’s a long pathway down. This has been a very, very specific development. I knew this is what I wanted to do and so I just went back to college, finished up my bachelor’s degree and then actively pursued this industry until I found a person that was willing to kind of let me in. It’s a tough nut to crack but once you’re in, you’re on the right path.Kristen (03:43)
Amazing, and what about this kind of drew you to it?Kurt Crandell (03:47)
⁓ I started another company recently. It was a pest control company here in Florida, my partner and I. you know, once I started trying to get my hands on capital for the business, I started realizing kind of the way this, this weird world of merchant lending worked. And, ⁓ you know, it was like, it made me want to help. It made me want to make it available to people that are doing a good job, making good money. They just maybe have not the greatest personal credit.And those of us that own everything we have free and clear, we don’t have personal credit because we don’t borrow money to buy stuff. We just own it. So it’s a way to develop credit for a company. And we already know like the best way to get ahead is with other people’s money. And if it’s a business investment that you’re borrowing, that’s substantially different, you know, than a personal toy or item.
Kristen (04:39)
And then what makes AFG different? Explain a little bit about what you guys do and what makes you unique.Kurt Crandell (04:45)
⁓ you know, the first company that I went into when I, when I was looking at options for this, you know, I, I took, I spent a day with them just to kind of shadow and see what I thought. And it was very much the, the Wolf of Wall Street mentality, you know, old Jordan Belfort, not, not how he is now he’s he’s substantially better, you know, cocaine on the tables, you know, I mean, it was wild. I mean, it was literally like, you know, and they would openly brag about the fact thatYou know, they purposely get people into these crappy loans and then they get them another crappy loan and then another crappy loan, you know, only to then try to get them to refinance, which isn’t technically a real refinance. It’s another crappy loan, supposedly packaged to try to fix the other crappy loans, but it’s just a lot of bad people doing bad stuff. And I don’t respect that. The guys that I’m with now, you know, it’s a very, it’s a boutique, if you will, very tight-knit crew, just good people, you know, good energy. Like they really…
They’ll be the first ones to say, hey, this doesn’t make sense for you. You know, do we make money if you get it? Sure, but it doesn’t make sense for you.
Kristen (06:32)
Absolutely, and I think that probably builds a lot of trust with your clients and some repeat business as well.Kurt Crandell (06:38)
It could, but really that would be almost like we’re doing it with that motivation. You know our goal is to make it where people don’t need to borrow money. Our goal is to get it where they’ve got lines of credit, where it’s available if they do need it. But there’s times we wind up more like therapists or counselors or coaches even. You know like. I’ve done so much and owned so many different businesses over the years that when I talk to a client that’s trying to do a business that I was very successful at.you know it’s just it’s fun to get to help them you know if we make money to the cool but you know if you love people and and do your best for the money comes
Kristen (07:13)
Yeah, absolutely. I think that’s such a great mentality to have. And what are some mistakes that you see when people are trying to access capital? I’m sure you see the same stuff over and over.Kurt Crandell (07:22)
Well, the first thing that happens is that people are so convinced that they aren’t gonna qualify, that they call in with these attitudes that it makes it a little hard to help. You know I mean, they say that a mind is like a parachute, it only works when it’s open. And they’re so convinced that they just can’t get it and their outlook is so negative. And those that are in a good position mentally and emotionally, we can have a great conversation, we can dig into the facts of what it is they’re doing, what are they trying to do.and one thing that we talked about before we got on camera was that
I have a lot of people, especially my real estate agents, you know, they think that because they’re a real estate agent and their licensing is in their name, that they can’t have a business. They think that they can’t have a business account. And that’s where I, you know, dig into it in more detail in the book. but you know, let’s say that your licensing is to like, my name is Kurt Crandell, well, if I’m a certified, financial fiduciary, it’s to me personally.
but there’s nothing stopping you from becoming Kurt Crandell LLC,
which you wouldn’t want to have to answer the phone. Hey, this is Kurt Crandell LLC, how can I help you? So then you just simply file a DBA doing business as your own name, Kurt Crandell, and then you can actually open a bank account in your name, Kurt Crandell, but then it’s a business account. So then merchant lenders can now give you capital based on revenue that you’re making already. You’re just flowing it in a different route.
to where you then now unlock a whole world of financing that’s extremely valuable to have.
Kristen (08:52)
Yeah, I think that’s a good tip. think a lot of people get in their own way and say no before someone else can. What are some of the requirements? I’m sure a lot of people don’t think they have, you know, the best credit score or whatever it is. What are some of those misconceptions?Kurt Crandell (09:07)
Some of the misconceptions are that because they’re applying that that means it’s gonna hurt them because they’re gonna get all these hits. You know, we’re a brokerage firm. We have dozens of partners, that just different products, different capabilities and offerings. They don’t do a hard credit pull because it’s literally, it’s a merchant bank. They can’t give money to private individuals. It’s gotta go to a business. And so it’s no different than getting car insurance.You know, they’re gonna check your credit when you get car insurance and they base your rates based on how good your credit is because that says a lot about you as a person. And people don’t believe me. You know, they’re terrified that it’s gonna just ding their credit and it doesn’t work like that. And if you have a shady or a guy that’s not doing what he says he’s gonna do, they’re like, well, I got a hard hit on my credit. And it’s well, then you didn’t talk to a real merchant lender. I don’t know what he’s doing for lending, but that’s not what I’m doing then.
So that’s one concern is they’re afraid that it’s going to pull, it’s going to do a hard hit, it’s going to hurt their credit. ⁓ For us, it really is simply how much revenue does your company make? These organizations, they want you to win. Another huge one that terrifies people is if I’m dealing with somebody that has a 600 credit score, maybe it’s a 601 and they meet a minimum with some of my top tier options, but they still want them to do a daily payment.
Well, why would you have a daily payment? Well, because this isn’t a deal where you’ve got a 30 % APR. It literally works on a set payback. You know, so let’s say they’re going to give you like a starter offer of like $10,000 to just kind of see how you do with it. Your payback might be 13K. Okay, well, that’s a 30 % interest rate. Okay, but it’s a fixed set 30%, meaning at the end of that, you might have $100 a day payment that’s only during business hours, like literally Monday through Friday. Okay.
no holidays, no weekends. And they’re doing that because it’s like, they want to make sure you can afford it. They look at how much is in your bank account on average. You know, if they’re going to give you a hundred dollar a payment, they want to make sure you’re at least carrying a thousand dollars per day on average that your, your balance never really goes below that. And it gives a lot of flexibility because like, for example, if I was doing mortgages and I have a guy that wants to buy a hundred thousand dollar property, you know, he’s going to have an 8 % rate, right? Or whatever it is.
And then the APR winds up being, you you do the math at the end of it, right? He had a 30 year fixed loan. And at the end of 30 years, he wanted to pay him back $300,000. You know, well, people are like, well, I just still want a long-term payment. I want a monthly long-term payment. And it’s like, yeah, but these guys don’t want to like bet on you for the long haul. You know, they don’t want to wait for armatization. you know, they want their money fast so that you have the highest probability of winning. And it winds up actually costing you the least amount.
but they can’t trust you with a big amount if they can’t see how you deal with a little one.
Kristen (12:30)
Absolutely, I think that makes a lot of sense and it seems like you really kind of work one-on-one with people for their specific situation and kind of figure out a solution.Kurt Crandell (12:39)
Yep. And that’s a lot of what happens to you get people that have like a 525 personal credit score, you know, and the banks are still willing to give them money because they’re making 20, $30,000 a month, overall revenue for their business, but they may be only will give them five grand, just to see like, how do they do like pay us back five grand over the next three months, you know, it’ll be like 60 days, a blank per per day, and they’re like, well, I don’t want a daily payment. And it’s like, yeah, but here’s the thing, like you had two days last month.Your account was in the negative. And they’re like, well, yeah, but if they’re charging my account, then it’s going to make it more in the negative. No, that’s not how they do this. They’re already getting a set payback. So they don’t care really how long it takes. It’s not going to automatically default if you missed a day. It literally just tax on more. Like literally just just rolls over. Like it doesn’t there’s no penalty. There’s no issue. You know, like it’s the least amount of stress you can possibly have with a loan.
because they want to see you win. They want to loan you more money down the road and then you get the reward at the end, like the golden ticket, right, from Charlie, whatever, the movie back in the day. At the end you get this letter that says, yeah, I did good, I paid off my loan. And once you have that, I can show that on your behalf to other lenders. And they’ll literally go, ⁓ crap, cool, they’ve already done this and they did it right, they paid it off. Okay, yeah, like how much did they do? Sure, we’ll give them this much more.
And they ramp up to where they can really start accessing lots of capital. Like, I mean, there’s millions of dollars of money sitting available for people that they’re just waiting to give out for people they could trust with it.
Kristen (14:14)
Right. Absolutely. And what about somebody who maybe didn’t get great advice on taking out a loan? Maybe it was something bit off more than they could chew and defaulted on it. How does someone recover from that?Kurt Crandell (15:06)
Not easily. If it was a business loan, if let’s say they worked with me, just for example, maybe I gave them the best advice in the world and they had a decent payment, but they just didn’t take it seriously. Or they said, you know what, I’m not gonna bother with this. And they shut down their account, right? They shut down the account that this was all tied to. And then they just go open a fresh bank account and they kind of just walk away. Well, that’s gonna red flag, black flag, whatever color flag you wanna call it in the industry.like you, got to take this very seriously. You’ve got to be responsible. You’ve got to see it out. If you did have somebody that, took advantage of you, I’ve got partners that are credit repair guys. I’ve got partners. I mean, there’s, there’s people in our network that can help you fix almost anything that you’ve encountered. Other guys won’t take the time to do that because I don’t actually get paid for, for working through that. But here’s the reality. I want to see you win. I want to see you get a line of credit. I want you to get, you know,
Something that’s gonna be in your corner forever literally forever whenever you need money You just go pull out what you need you do what you got to do you pay it back with phenomenal terms at ridiculously low rates and Everybody’s happy everybody wins
Kristen (16:18)
Yeah. Makes a lot of sense. And before you were kind of mentioning maybe some lenders that are a little bit more predatory, don’t really give the right information. What should people look out for when they’re choosing someone to work with?Kurt Crandell (16:32)
They should just work with me.Kristen (16:33)
Yeah, easy.Kurt Crandell (16:35)
I’m serious,like our firm is growing to the point, I don’t care who you have on this show or who watches it or finds my book, they can literally reach out. My Instagram is literally at, what is it? Merchant Money Man, like literally reach out, let me know and we will put you in contact with somebody that can help you. Like don’t just take it for risk, don’t just, go to Google, like if you’re watching this and you want help, let us know and we will help you.
I don’t care where you are. I’ve got a guy right now that is in, where the heck is, he’s in Columbia. We’re literally helping him fund a project, a real estate investment project in Columbia, but he’s got to tie it to his US bank account. That’s all. You got to have revenue going into a US bank account that’s verifiable at a US bank and we can still help you. Like there’s, yeah, if I can’t help you, then you’re needed to look for a different type of money.
Kristen (17:25)
Yeah, absolutely. And do you see other people kind of offering things that are just too good to be true, just to kind of reel people in?Kurt Crandell (17:32)
yeah,that’s the one I was talking about that was the the cocaine cowboys, they would outright lie like literally like they’d be like, yeah, we’re gonna put you in for an SBA loan. You know, everybody knows about that. Everybody’s been talking about them. They have no idea how hard it actually is to get those. It’s not impossible. People get them for sure. But I’ve personally gone after them for different businesses. I was looking at buying and the stipulations exist like there’s you know, it takes time and a lot of people when they’re in a spot, they want to make a move on things that needs to happen fast.
You know, a lot of those just are not fast. But these guys will lie and say, I’m going to get you this. I’m going to do that for you. You know, here, take this loan for now to kind of tide you over only to then put you in a situation where they’re not taking you down the right path. Like at all. It’s like Pinocchio, being led by the creepy guy.
Kristen (18:17)
Yeah, I bet that happens a lot.Kurt Crandell (18:20)
Unfortunately, I it probably does too. Yeah, so we partner with Lending Tree. We get a lot of business from Lending Tree. We’ve got other online people that are just, mean, literally like, if you go to Forbes, Forbes does a really good job keeping track on that. Every one of the people they mention is one of my partners. like I literally just send their articles to people so they can do their research. Even in my book, I end up citing a lot of sources that are tied to the Forbes articles that they put out about it, so.Kristen (18:45)
Yeah, and let’s talk about your book a little bit. What led you to writing this?Kurt Crandell (18:51)
⁓ I’ve I’ve done other television shows and other different things that I’ve been featured on basically when it’s like I wind up saying the same thing to people over and over and over It’s like, know what like I want to help you but like I’m doing millions of dollars of day and funding I Literally can’t sit here and explain this entire concept to you. Like I’m sorry, but you don’t qualify I want to help you here, you know go to this podcast here go to this book likeyou know, duplicate yourself, right? Like make it where you’re more accessible. Then they can put that book in other people’s hands. They can literally, I don’t just want a referral. Like sure, I’ll help your mom. I’ll help your cousin. I’ll help your aunt. You know, my whole team, like we’re growing so fast. We probably are one of the fastest growing brokerages in the nation in this industry because we do such a good job, you know, but I want it to where they come to the plate, like prepared, excited, ready, they’ve taken the next three, four months. most of my lenders, you have to have three months of good bank statements, minimum.
There’s one that’ll do like two, but you don’t really probably wanna even try there. I recommend it really for some states it’s legally you have to have four. So they’re ready, they know what they need, they know what they’re doing. They’re not putting themselves in a situation where they’re like drowning and they’re hoping this is their fricking donut, their little lifesaver that I’m throwing out to them. They’re making business decisions that are smart. They wanna make moves that are like the big boys. And the big boys have lines of credit, they have access to capital.
you know when they see a thing that pops up they’re not scared because they know they’ve got that piece that that that ⁓ that assuredness that confidence you know that they can do the things that they need to do to make these things happen
Kristen (20:24)
Definitely. And do you suggest that people have a certain type of like preparation before they’re you talking to someone like you or do you help people through that as you start working together?Kurt Crandell (20:35)
I can, but a lot of people come to me so green with business. They don’t even know what an LLC is. They don’t know that there’s a difference between a business bank account and their personal bank account. Like they think they have a business because they set up a website. I’ve literally had people tell me they thought they’re like, well, I’m in business. I have a website. And I’m like, I’m sorry, you know, like this sweet little Korean lady in Korea town in LA today, we had that conversation.Like she gave me her URL and she’s like, see, I’m in business. And I’m like, that’s sweet. You know, we talked and I, you know, it was, was a great conversation. But what I really refer people to a lot is actually the small business association. I’ve got a place in Anchorage. I go to that one for some of my stuff up there. I’ve been to ones all over the nation. They’re just such a good group. Like they’re so smart. They’re so knowledgeable. They put on free classes. They’ll put you in touch with accountants and lawyers and you know, they’ll sit you down and explain how do you do an LLC.
I would much rather people go to the SBA than like Inc. Authority or these other online ones where they’re just sales guys trying to just like shove something down your throat, you know, for their own benefit that you don’t even know what they’re selling you. Like you have no idea why you should have it. The first time I did it, I ended up setting up the wrong entity for what I was trying to do. I didn’t know well enough on what he was talking about. I was like, you know what dude, just let’s just do it. I didn’t care. was like 600 bucks. I’m like, whatever. I don’t even care at this point. And then afterwards I was like,
Crap dude like we did the wrong thing, like that’s not what I needed. So the Small Business Association is a nascent wide organization. They’re phenomenal. People volunteer their time and they’re smart and they’re good and they’re usually tied to like a library. So you’ve got other access to other resources and it’s just a good group to network in to just get to know the other business owners in your area that are like arm in arm with you, like trying to ramp up something and they’re humble and honest. I don’t know what I’m doing. Please help me. That’s really a great first step.
before I can even really do anything with the entity they would have helped you create.
Kristen (22:29)
Definitely and that’s like vetted source, so that’s a really good place to refer people to. Well this has been awesome. You’ve given so many good practical tips for people of how to kind of move forward in this world. Tell people again where to find you and where to find your book.Kurt Crandell (22:34)
Agreed.kurtcrandell.com and then instagram is just merchant money man like it’s a little cheesy but i trying to think of something that would like really dive into what i do like the niche of of where we’re at with that my email personal is just kurtcrandell@gmail you know just send me an email and you know it’s it’s k-u-r-t-c-r-a-n-d-e-l-l or you can just do merchant money man on on instagram and you know it’s probably the easiest thing i’ve got some more trainings to be coming out i’ll be launching stuff on there you know just to keep as
things are coming out when my different lenders are putting out, promotions per se, but there are times that these companies run out of funds. Like literally run out of money. Like they loaned it all out. Like they’re literally like, they’ve got to wait and reset for the next quarter or whatever. So that’ll be a place that I’m like offering when I see cool things are happening. I’m not doing much with it right this second. I’m just ramping that up, but yeah.
Kristen (23:34)
Amazing Well, thank you so much, Kurt.Kurt Crandell (23:36)
You’re welcome. Thank you.Kristen (23:38)
Thank you everyone for listening. hope you got a lot of great information for your own business, some good takeaways. Definitely check out Kurt online, definitely check out his book, and definitely check out AFG. Sounds like you guys do a lot of great business for people. So we will see you back next time. Thank you so much.Kurt Crandell (23:53)
Thank you.
