[jotucker1983]

I guess I just don't understand why a Broker doesn't have his Network established to have a particular lender (1-2) at each risk level hierarchy to address the particular needs of his client? There's only "so many" direct lenders in this space, how is it that another Broker could have a source that you never heard of?

This might make sense on the bankcard processing side, you will have your conservative ISO, your moderate ISO, and your high risk ISO. But because there's so many different ISOs in the space with random levels of underwriting criterion, you could also have a side relationship with an Agent that has relationships established with let's say 30 different ISOs and Banks in which you send files to that you can't get done within your network (saving you from having to partner with 30 different companies). Those deals you send to that Agent would be Sub-Agent deals.

But I don't see how one would need something like that for this space. There's only so many direct lending groups out there and their generic criteria, target markets, price levels and risk levels can be easily identified.

[cardinalequity]

John,

Outside of strong relationships with a lenders which helps you get better and faster service at times I do have one other reason why ISO's would sub-broker.

If you notice many posts on here you will see the following... Who does this? Who does that? Who can get this done? Can anyone fund a deal in Canada, etc
Now for the true newbie it's somewhat acceptable but really even the slightest effort to search this forum would give them the answers they seek.

I believe these people fall into 2 categories.

1. The DF moocher that doesn't want to study the industry and wants everyone to tell them everything and build their business for them. (IE What sales script do you use, what leads, what industries, etc)

2. The people who genuinely want to learn the business but sometimes deals need to close quickly and they don't have time to wait for a DF response for their deals. These people often times will see the temporary value of working with a seasoned broker. (6-12 months)

In my personal opinion and experience the ISO's that fall into category #2 usually are the ones who not only stick around long term but actually thrive. There is value in mentorship if you want to call it that.


FYI John I'm aware you made the below statement so I know you see the potential value in specific unique situations.


I do, however, think that if someone has zero experience in this area that they should work under someone to train them, which might be all commission or with a hourly wage. But that should be very short term, perhaps 6 -12 months, it should give the new person time to learn the basics of the industry as well as how they will branch off with their own unique value proposition for this industry.

I guess I just don't understand why a Broker doesn't have his Network established to have a particular lender (1-2) at each risk level hierarchy to address the particular needs of his client? There's only "so many" direct lenders in this space, how is it that another Broker could have a source that you never heard of?

This might make sense on the bankcard processing side, you will have your conservative ISO, your moderate ISO, and your high risk ISO. But because there's so many different ISOs in the space with random levels of underwriting criterion, you could also have a side relationship with an Agent that has relationships established with let's say 30 different ISOs and Banks in which you send files to that you can't get done within your network (saving you from having to partner with 30 different companies). Those deals you send to that Agent would be Sub-Agent deals.

But I don't see how one would need something like that for this space. There's only so many direct lending groups out there and their generic criteria, target markets, price levels and risk levels can be easily identified.