[danra]

I need the experts to give their opinion on this.

If a merchant funded by a stacking funder that actually knew that they were funding a 3rd position or 4th position asks for a reprieve about a month in (before a full month of payments are made) and then that stacking funder doesn't do anything about it for another month and a half; leaving the ISO out of the loop the whole time, should that ISO have to pay back the commission almost 3 months later?

Let me hear your opinions.

Thanks.

[J.Celifarco]

The terms of your agreement are in the ISO agreement you signed. Whatever the terms you agreed to are is what you should do

[WhoisKingsley]

The merchant called the lender to see if they can lower or postpone payments and the lender didn't comply? You are also saying that they didn't lower or help the merchant until about 30 days after the first phone call was made to lender requesting for help?

If this is the case #1- your lender is garbage and not receptive to the needs of the merchant. If there is an emergency- lenders stress that merchants call before defaulting #2 - I can't say this for all, but if any of my merchants default (no matter if it's 1 day or 6 months) they let me know.

Like John said- check your agreement with them and read the fine print.
Does the merchant have a paper trail of contacting the lender? Emails? Phone records? Anything that can show proof that they tried and it was the fault of the lender for not complying with the merchants needs?

Either way- you may be stuck paying back the commission. Ask for a payment plan or try to fund something else with them in place of the money you have to return. If it's not a lot, don't make it into a big deal.

[MCAVeteran]

Read your ISO agreement and if you believe the clause doesn't exist challenge it with funder/co. I get calls all the time asking if this or that is fair and all roads lead to the ISo agreements at the end of the day. Don't sign them unless you read them or pay an attorney to read them and advise you upfront before engaging. It may cost you a few hundred dollars for a contract review but could save you thousands later on. I don't know how you can run a business without an attorney or CPA these days. I have both on speed dials.

[Avi Dahan]

no they shouldnt.

[MCNetwork]

Some lenders have a 90 day commission clawback clause so read your agreement carefully.

[J.Celifarco]

Read your ISO agreement and if you believe the clause doesn't exist challenge it with funder/co. I get calls all the time asking if this or that is fair and all roads lead to the ISo agreements at the end of the day. Don't sign them unless you read them or pay an attorney to read them and advise you upfront before engaging. It may cost you a few hundred dollars for a contract review but could save you thousands later on. I don't know how you can run a business without an attorney or CPA these days. I have both on speed dials.

I say this all time.. Every time I see a funding company who copy and pasted another funding companies contracts and uses them as their own I shake my head.

[jotucker1983]

I need the experts to give their opinion on this.

If a merchant funded by a stacking funder that actually knew that they were funding a 3rd position or 4th position asks for a reprieve about a month in (before a full month of payments are made) and then that stacking funder doesn't do anything about it for another month and a half; leaving the ISO out of the loop the whole time, should that ISO have to pay back the commission almost 3 months later?

Let me hear your opinions.

Thanks.

I agree with most here that whether or not you have to pay it back will be based on the Broker Agreement you signed with said Lender. However, I'm also aware of the fact that companies just flat out change their policies without requiring the signage of a new Broker Agreement.

I have been partnered with some of the same companies since 2009, with a Broker Agreement that was signed in 2009, and I can't tell you how much their credit policies, commission policies, renewal policies, etc. have changed since then without the signage of any new Broker Agreement in place.

I would try to work this out with the Lender first, if you can't get any traction then have your attorney review the situation to see if there's anything that could be done potentially. Not sure what the actual commission amount is, but if we are talking $1,000 and the attorney fee is $800 then it might not even be worth it to fight it legally. You might have to "eat" this one and just decide to no longer do business with this Lender in particular.

This is why it's always important to never put all your eggs into one basket.

[len@accfunding.com]

When you signed the ISO agreement, you entered into a contract with the funder. The contracts always speak for themselves no matter what the circumstances are.

[JSL23]

Is it fair- NO. Does that Lender sound underhanded-Yes, very. Most important question- Did you sign a contract with a claw back? Ultimately, that is the bottom line. I'd personally never sign a 90 day claw back....or even a 30 day.

Either way, you should talk to the Lender; don't burn bridges....see if they can cut it by 75%(or at least 50%) since it was almost 3 months. After it is settled I'd ask if they can either get rid of the clawback or at least make it a 30 day(If you decide to work with them in the future).

[GMB]

I often see these posts and wonder how do you sign an agreement with a lender without truly understanding your representations and theirs. Especially items related to the paying or clawing back of commissions. Read the agreement, Discuss it with the lender if you are unhappy or if the terms are not what is denoted in the agreement. You have 2 choices hire and attorney or move on. If this is a Lender you do "real" business with re a few deals a month I am sure they will work with you.

[Chambo]

All this tough lawyer talk....someone needs to bring these new, unproven, and small ISO's back down to earth and reality. If you are a small shop, or an unproven entity, the contract is what it is. You don't like it? Don't fund there. They aren't going to amend any ISO agreement for an unproven entity, or a small shop that is only going to send in 2-5 deals a month.

Build up a portfolio, or even a name for yourself as a reliable ISO that has deal flow....THEN you have some clout to bring to the bargaining table. Otherwise, don't waste everyone's (including your own) time.