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05-21-2021, 12:16 AM #1
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- Jun 2020
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- 34
Last Chance Funding Suing for Clawbacks
Anyone notice that LCF filed clawback lawsuits vs 9 iso shops this month
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05-21-2021, 12:31 AM #2
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- Dec 2016
- Posts
- 379
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05-21-2021, 07:29 AM #3
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- Jun 2015
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- 3,325
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05-21-2021, 08:42 AM #4
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- Dec 2016
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- 379
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05-24-2021, 11:19 AM #5
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- Jun 2015
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- 3,325
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05-21-2021, 01:39 PM #6
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- Jun 2018
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- 6
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05-26-2021, 06:31 AM #7
- Join Date
- Mar 2014
- Location
- Florida
- Posts
- 2,959
An ISO that generates his/her own leads, secures the proper paperwork, closes the deal - deserves more than 25% of their commission.
IMO - What an ISO should be doing is providing good deals to their funder - NO STACKING - NO MAX OFFERS
Why does the business owner need these expensive funds? What is his/her business plan, how will these funds increase their profits.Dave Lambert, Business Development
dave@fcbankcard.com
Merchant Services Consultant
High Risk Merchant Payment Solutions
SBA 7(a) Loans & Short-Term Funding
T/VM: 727-291-7890
Office: 727-233-1111
Skype: fc-financial
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05-26-2021, 09:10 AM #8
- Join Date
- Dec 2016
- Posts
- 379
So you're suggesting 25 points to the ISO? Us as the funder has all the risk, a massive amount of skin in the deal, and we still have to account for defaults, overhead, employee salary (since our employees aren't on commission), etc.. That would mean that on any given deal, the ISO stands to make WAY more money than the funder, which is completely ridiculous given how little skin they have in the game.
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05-26-2021, 09:12 AM #9
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- Feb 2018
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- 1,349
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05-26-2021, 10:40 AM #10
- Join Date
- Mar 2014
- Location
- Florida
- Posts
- 2,959
Dave Lambert, Business Development
dave@fcbankcard.com
Merchant Services Consultant
High Risk Merchant Payment Solutions
SBA 7(a) Loans & Short-Term Funding
T/VM: 727-291-7890
Office: 727-233-1111
Skype: fc-financial
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05-21-2021, 09:23 AM #11
- Join Date
- Mar 2019
- Posts
- 105
I agree with this entirely. Even though it goes against my personal interests the incentives are totally misaligned in this industry and most brokers could quite literally could not care less about the merchant many times and will stack em till there cooked. If you are syndicating your deals you should be getting paid out as the deal pays in my opinion. If you are syndicating you should get more leeway about getting paid commission upfront.
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05-21-2021, 11:26 AM #12
- Join Date
- Jun 2019
- Posts
- 44
Really? So I paid for the lead, sold the lead, closed the lead and on top of that I should be responsible for them paying it back? If another ISO ends up funding this merchant and over leverages them Im supposed to be responsible for that? Should we show up every day to the place of business to make sure things are running smooth too? Pay me upfront, sorry not sorry
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05-21-2021, 12:07 PM #13
- Join Date
- Nov 2013
- Posts
- 598
I feel your pain but its the same if not worse for the funder at least monetarily. They paid for the marketing, processed and funded it.
I do think the A/R should be aligned with a higher commission payout and frequency, for example get paid 10% on RTR not principle. Get paid weekly on it as funder collects. This way you get residuals and higher profit margins. Interests are also aligned as collections are in everyones interest.
Reverse Funding companies like GFE do this, I personally like it and it has no clawback.
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05-24-2021, 03:19 PM #14
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05-25-2021, 10:17 AM #15John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-25-2021, 03:43 PM #16
- Join Date
- Jul 2014
- Posts
- 92
15 years ago the marketing expenditure per funded deal shouldn't have been more than a couple hundred dollars... now there's shops spending thousands. I think the residual model is great but it will choke out newer and poorly financed ISOs (some can argue that's a good thing).
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05-21-2021, 12:32 PM #17
- Join Date
- Mar 2019
- Posts
- 254
EPIC ADVANCE
Mark@epic-advance.com
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05-21-2021, 05:24 PM #18
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- Jun 2019
- Posts
- 44
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05-26-2021, 08:47 AM #19
- Join Date
- Nov 2018
- Posts
- 30
i agree that having a clawback policy is dumb only because i dont do that and ill simply get more business from the competition. That being said, you guys have a horrible track record with me, pretty sure i lost money on you guys. I wonder if you say "sorry not sorry" after you triple fund the merchant, put him on a reverse then ship him off to a debt collector.
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05-26-2021, 12:05 PM #20
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- Apr 2015
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- 159
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05-21-2021, 07:27 AM #21
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- Jun 2015
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- 3,325
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05-21-2021, 09:46 AM #22
- Join Date
- Nov 2018
- Posts
- 30
those are some petty ass 3k lawsuits. just take the L and move
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05-21-2021, 12:26 PM #23
anyone who was around back in 07, 08, 09, know this is how most companies paid commissions. 6/4 - 7/3 or some other combination of upfront and residuals. Back then as a sales guy I loved the residuals that basically became your salary a set amount you could count on every month and up front commission was the bonus. It always surprised me that as stacking became more prevalent in the industry that more companies didnt try to go back to this form of commission.
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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05-24-2021, 08:34 AM #24
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05-21-2021, 12:38 PM #25
- Join Date
- Jul 2017
- Posts
- 130
Our original commissioning approach at AdvanceMe (later CAN Capital) was a decent upfront of 5-8% of the Funded amount, plus an additional 4-6% Residual on the RTR as it came in. It let the good ISO's build a book of Residuals they could draw on when they hit a cold spell, and protected the Funder as well. ISO's got paid similarly on Renewals. The move to 100% upfront commissions has been one of the de-stabilizing changes in the MCA industry
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