[iawia_advanced]

Anyone notice that LCF filed clawback lawsuits vs 9 iso shops this month

[TheUnderwritingProdigy]

Anyone notice that LCF filed clawback lawsuits vs 9 iso shops this month

Good. In my opinion, the industry has it backwards. ISO's should be paid out at different milestones in the deal instead of all at once upfront. This would ensure mutual success between the funder and the broker.

[Michael I]

Good. In my opinion, the industry has it backwards. ISO's should be paid out at different milestones in the deal instead of all at once upfront. This would ensure mutual success between the funder and the broker.

Make an offer and you will be surprised .for instance instead of 10-12 upfront ,you will get 20-25% paid monthly.Just like lotto winners you have a choice to take less upfront or more over a longer time

[TheUnderwritingProdigy]

make an offer and you will be surprised .for instance instead of 10-12 upfront ,you will get 20-25% paid monthly.just like lotto winners you have a choice to take less upfront or more over a longer time

20-25%? Lmaoooo

[Michael I]

20-25%? Lmaoooo

Run the numbers against your book, without even factoring in how many less defaults you will have and let me know how crazy i am

[legendarycr]

Make an offer and you will be surprised .for instance instead of 10-12 upfront ,you will get 20-25% paid monthly.Just like lotto winners you have a choice to take less upfront or more over a longer time

Don't be a ****ty ISO and these problems can be avoided

[Yankeeman07]

Make an offer and you will be surprised .for instance instead of 10-12 upfront ,you will get 20-25% paid monthly.Just like lotto winners you have a choice to take less upfront or more over a longer time

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.

[TheUnderwritingProdigy]

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.

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.

[fundingsmbs]

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.

we have heard this cry before. stop working with brokers if you can't handle the heat. spend millions on your own marketing.

[Yankeeman07]

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.

Not quite sure - did I not type 25% of their commission -

This was the original post - for instance instead of 10-12 upfront ,you will get 20-25% paid monthly

[ryanh]

Good. In my opinion, the industry has it backwards. ISO's should be paid out at different milestones in the deal instead of all at once upfront. This would ensure mutual success between the funder and the broker.

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.

[FIRST US]

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

[FCF Fund]

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

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.

[Chambo]

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.

Back in the day, the funds would pay out 5/5, or 6/5.....you got the 2nd part as residual.

I believe Cap Stack/Prodigy still pays that way

[J.Celifarco]

Back in the day, the funds would pay out 5/5, or 6/5.....you got the 2nd part as residual.

I believe Cap Stack/Prodigy still pays that way

Chambo, 7/3 with MCC selling 6 month 1.30 split deals all day long. The industry was much simpler back then

[OC Funder]

Back in the day, the funds would pay out 5/5, or 6/5.....you got the 2nd part as residual.

I believe Cap Stack/Prodigy still pays that way

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).

[Akanner]

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

What if the ISO who paid, sold, and closed the lead also stacked, charged a heavy PSF, and lied to the merchant telling him he will get a bank LOC....?

there should be a Clawback in that case. And trust me these things happen.

[FIRST US]

What if the ISO who paid, sold, and closed the lead also stacked, charged a heavy PSF, and lied to the merchant telling him he will get a bank LOC....?

there should be a Clawback in that case. And trust me these things happen.

Thats just par for the coarse in the industry. Banks know the risk with any deal so have the right underwriters and price accordingly.

[Ben_p]

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

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.

[helpinghand]

Good. In my opinion, the industry has it backwards. ISO's should be paid out at different milestones in the deal instead of all at once upfront. This would ensure mutual success between the funder and the broker.

Agree. Incentives need to be aligned for long-term success.

[Michael I]

Anyone notice that LCF filed clawback lawsuits vs 9 iso shops this month

You have a link ?curious if any other funder will cut those 9 off

[Ben_p]

those are some petty ass 3k lawsuits. just take the L and move

[J.Celifarco]

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.

[kevin85k]

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.

Yeah and the brokers got paid on the Payback amount not the funded amount.

[Esteban2000]

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