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01-15-2015, 07:13 PM #1
- Join Date
- Dec 2014
- Posts
- 50
Mechanics of syndication
Can someone explain how syndicating on a deal would work given the scenario below:
Funding Amount: $100,000
Factor: 1.37
Term: 6 month
Funding Company: $70,000
ISO Syndicating: $30,000
With a a typical commission and management fee, how much is the ISO making and over how long
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01-15-2015, 07:59 PM #2
ISO's portion is $30,000. Your Purchased Amount is $30,000 x 1.37 = $41,100.
Let's say commissions are 10% on funded. $100,000 x 10% = $10,000. You're paying 30% of it for $3,000.
Let's say management fee is 3%. A funder can assess this in their own way but let's say it's 3% of every dollar that comes in. On $41,100 at 3%, that would be $1,233.
$41,100 - $3,000 - $1,233 = $36,867 or a 1.23 factor net of fees and commissions.
I don't know what you mean by "over how long". In your example you said 6 months. You'd be making 23% over 6 months. If you want an approximate APR, that's 46% a year.
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01-15-2015, 08:20 PM #3
- Join Date
- Dec 2014
- Posts
- 50
Thanks for the detailed breakdown Sean.
From an ISO's perspective though, why would you be subtracting the 10% commission? Wouldn't that be paid on top of the purchased amount?
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01-15-2015, 08:43 PM #4
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04-16-2015, 03:39 PM #5
- Join Date
- Mar 2014
- Posts
- 2
Do most syndicates leads share the contractual origination fees or no?
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04-16-2015, 03:43 PM #6
depending ont he fund you are syndicating with, they cut chop off whatever % you are syndicating, all costs included, or they reduce the commission paid by the syndication amount (ex: $10,000 commish, the fund would only pay $7000 commish, because they are only doing 70% of the deal)
The breakdown depends on the fund you are syndicating with
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