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I wanted to know what people's thoughts are about funders who also broker deals to other funders. Would you work with these funders or are you interested in only dealing with funders who fund in-house only?
There's pros and cons to both, why would you or wouldn't you work with a funder who also brokers.
I am not a broker. I am a former investment banker. In that role I would never co-broker a deal or call anyone that has capital and acts as a investment bank or merchant bank. If you don't know where to go with a deal anywhere on the balance sheet, you should never engage the prospect. I would target prospects in industries I know well, discover exactly what is needed, and go to no more that 5 to 10 relationships that I KNOW can be a good partner for the prospect. I also ALWAYS had an engagement agreement with the prospect and was paid by them. I always worked exclusively and had a clause in my engagement agreement that I would run the entire process even if a capital provider presented themselves to the prospect.Quote:
Originally Posted by Fetachini
you have to look at it this way if the "funder" you are working with is also brokering out to other funders will cause many issues because you dont know who he is submitting to and what that funder will do with your paper workQuote:
Originally Posted by Fetachini
i don't see any benefit for you working with that company and would stay far away from them
you really want to have the least amount of eyes on your paper work which is why i work with only a handful of funders
Brokers can shop around with their own file, they don't need the funder to do that for them.
If my ISO's saw I was sending out their deals, I wouldn't get another file from them ever.
It's not fair to the broker who is trusting me with his file. Nobody wants their file in too many hands.
Almost EVERY funder has a retail arm that brokers out deals. National, Reliant, Mulligan, Rapid, Fora, ODC, IOU, ARF, and many more companies send deals off to other funder's to monetize their lead flow. Some even go through large marketplaces like Lendio. There is nothing the broker can do about this. As a matter of fact, if you read the ISO agreements, it spells out exactly how they can do this as they state it is "their customer" once you send it to them or they fund it. Many agreements also mention "Other products or services" which means many funder's are soliciting merchants for equipment financing, factoring, merchant services, and many other revenue generating products or services. Than there is the non performing accounts that funder's ship off vs renewing to other funders. Some funder's acquired an ISO and use that ISO as their own arm for sending out deals.
If you send a deal to someone like that jokes on you.
There's a funder for every deal these days - do your own leg work.
Its Water and Fire, can never go together and a huge conflict of interest.
50% of the posts bashing others on this site is only for of that reason...
You can never fully trust a funder that brokers deals to other funders to be honest with you on your deal.
^ than you cant trust anyone because every known brand brokers deals. You can ask the ISO manager all you want at each funder and they will either lie, or, are completely clueless what management is doing. The only safeguard would be to iron out an iso agreement that prohibits solicitation of your file, but, good luck getting a funder to accept your redlines.
what if the funder you think you can trust is shopping your merchants without your knowing. Then who's the joke on?Quote:
Originally Posted by MCAFORDUMMIES
if you have a cause of action (i.e. can prove monetary loss) from their actions, you can sue them if the ISO agreement doesn't allow them to shop merchants you sent them, but, may want to check your ISO agreement