[factorfinders]

I understand that lenders need to have a full picture of who refers them deals. However, will someone help me understand why a lender would require the authority to pull the ISO owner's personal CREDIT Report? Background report I understand, but credit report?

The lender insists that they don't pull credit, but when I crossed the authority out on the application it was rejected.

No big deal as we were just trying to add an additional C-D funder to our portfolio.

Appreciate the education, thanks.

[jotucker1983]

I understand that lenders need to have a full picture of who refers them deals. However, will someone help me understand why a lender would require the authority to pull the ISO owner's personal CREDIT Report? Background report I understand, but credit report?

The lender insists that they don't pull credit, but when I crossed the authority out on the application it was rejected.

No big deal as we were just trying to add an additional C-D funder to our portfolio.

Appreciate the education, thanks.

Credit reports are apart of the background checks these days. Every Employer (for the most part) is pulling your credit after they make the decision to work with you as a direct hire or as a Partner. If one has bad credit, it can surely stop an Employer from hiring you as a direct hire, not sure if it will stop you from becoming a Partner or not, but it "could".

[factorfinders]

Credit reports are apart of the background checks these days. Every Employer (for the most part) is pulling your credit after they make the decision to work with you as a direct hire or as a Partner. If one has bad credit, it can surely stop an Employer from hiring you as a direct hire, not sure if it will stop you from becoming a Partner or not, but it "could".

Understand that many employers pull credit when hiring, but this is a very different situation as I am the Managing Member of an LLC. The transaction is between two business entities. As a point of clarification, the business entity has employees, an office lease and all the trappings of a legitimate business. My biggest complaint was we were assured that the funder doesn't pull credit, but when I crossed out the authorization the agreement was rejected. Which is it?

[jotucker1983]

Understand that many employers pull credit when hiring, but this is a very different situation as I am the Managing Member of an LLC. The transaction is between two business entities. As a point of clarification, the business entity has employees, an office lease and all the trappings of a legitimate business. My biggest complaint was we were assured that the funder doesn't pull credit, but when I crossed out the authorization the agreement was rejected. Which is it?

It could be that they do in fact use credit reports as apart of their background checks, and whomever you were speaking with (maybe an ISO/Broker Support Staff Member) provided you inaccurate information?

From my experience, when an Employer says they are going to do a background check it will include not just criminal history, but also your credit report, driving record, any professional licenses you hold, tax liens you might have, the status of your US citizenship, the whole nine yards.

You are considered 1099 when you sign up with a Lender, so they might or might not include a credit report within their background checks. But I worked with some Lenders that pulled my credit to authorize me as a Broker even way back in 2010.

[OC Funder]

Understand that many employers pull credit when hiring, but this is a very different situation as I am the Managing Member of an LLC. The transaction is between two business entities. As a point of clarification, the business entity has employees, an office lease and all the trappings of a legitimate business. My biggest complaint was we were assured that the funder doesn't pull credit, but when I crossed out the authorization the agreement was rejected. Which is it?

Would you accept the same line of reasoning from a restaurant seeking a cash advance? If anything, a restaurant with 100k of kitchen equipment has a far better argument than your class c office space with a couple IP phones (and even if your shop is more sophisticated than that, the next guy's won't be).

Sometimes you can get the requirement waived if you're a credible shop with an established reputation. If not, some people may be weary of doing business with you, especially in an industry known for fraud and sleeze

[FUNd]

Would you accept the same line of reasoning from a restaurant seeking a cash advance? If anything, a restaurant with 100k of kitchen equipment has a far better argument than your class c office space with a couple IP phones (and even if your shop is more sophisticated than that, the next guy's won't be).

Sometimes you can get the requirement waived if you're a credible shop with an established reputation. If not, some people may be weary of doing business with you, especially in an industry known for fraud and sleeze

I've seen some real sleazeballs operating out of 'class a' office space. Not sure VOIP phones aren't the absolute standard now either.

Not sure I follow your argument.

[OC Funder]

I've seen some real sleazeballs operating out of 'class a' office space. Not sure VOIP phones aren't the absolute standard now either.

Not sure I follow your argument.

I could have phrased my argument better, I didn't mean to suggest that the quality of your office space is relevant... The point i was trying to make is that it's very easy to throw up an ISO and tear it down. OP felt that his credit was irrelevent because he had an LLC with employees... if you don't accept that logic from your merchants, why should funders accept it from you?

[Chambo]

Credit reports are apart of the background checks these days. Every Employer (for the most part) is pulling your credit after they make the decision to work with you as a direct hire or as a Partner. If one has bad credit, it can surely stop an Employer from hiring you as a direct hire, not sure if it will stop you from becoming a Partner or not, but it "could".

Isn't that now illegal in NY?

[AndyYSCISOdept]

This is something I've only ever seen in a few instances and it was usually when we as a direct lender were trying to set up as a split funder with a processing company (ie First Data) However, it could be some new kind of requirement. That would make me very uneasy, I know that I've never pulled any credit on any ISO that sends/funds business with us. Anyone else have any more insight?

[Funder Mark]

I am pretty sure On Deck requires it, and I know that Pearl used to, not sure about now.

[AndyYSCISOdept]

Im sure On Deck requires it as part of the whole publicly traded company want to vet out whom we work with thing.

[factorfinders]

This isn't On Deck. Definitely a C-D lender.

[Chambo]

I understand that lenders need to have a full picture of who refers them deals. However, will someone help me understand why a lender would require the authority to pull the ISO owner's personal CREDIT Report? Background report I understand, but credit report?

The lender insists that they don't pull credit, but when I crossed the authority out on the application it was rejected.

No big deal as we were just trying to add an additional C-D funder to our portfolio.

Appreciate the education, thanks.

They are beginning to self regulate. They don't want to just take on anyone, because they happen to call themselves an ISO.

Next in line will be the new California laws about ISO referrals . Thanks Jeremy Brown for filling me in there.

[FUNd]

They are beginning to self regulate. They don't want to just take on anyone, because they happen to call themselves an ISO.

Next in line will be the new California laws about ISO referrals . Thanks Jeremy Brown for filling me in there.

Thank God for that. A lot of us have had a rough patch here and there, but someone who has a long history of flaking on creditors shouldn't be advising others how to make smart financial decisions. I applaud any barrier that makes it more difficult for new entrants to the space that don't measure up.

[AndyYSCISOdept]

Thank God for that. A lot of us have had a rough patch here and there, but someone who has a long history of flaking on creditors shouldn't be advising others how to make smart financial decisions. I applaud any barrier that makes it more difficult for new entrants to the space that don't measure up.

I'm with you on this one, I remember the massive influx in people coming into the space that had no business being here and earned that reputation based on their business practices. And since then I have seen the bedrock of the industry, the guys who want to see what we have protected, take a stand and make a difference. I'm not sure that pulling credit is 100% necessary but it cant hurt I guess.

[BigIz]

They are beginning to self regulate. They don't want to just take on anyone, because they happen to call themselves an ISO.

Next in line will be the new California laws about ISO referrals . Thanks Jeremy Brown for filling me in there.

Chambo, I could not tell by your post if you were for or against the new ISO regulations in California?
It seems to me that the new bill loosens up the law against ISO referrals in California. It is now legal for an ISO to get paid a referral fee on a commercial loan from a licensed lender. It was illegal before.
The new law limits the rate to 36%, the loan must have a minimum term of 1 year, there is a very specifically worded disclosure about the referral fee being paid and there are provisions against false advertising.
I think in general the law is OK and that is where the federal regulators will eventually go also. The big drawback in the new law is the fact that the ISO can only make the initial introduction and is not allowed to participate in any of the loan process.

As far as background checks go, I was in the title insurance industry for 20 years, prior to the 2007-2008 financial crisis and had good credit. I have not been able to fully recover from that since. I am actually fine with a lender running a credit check on the principals of a Company they are going to do business with (I am an LLC also), as long as my credit by itself does not disqualify me to get signed on as an ISO. If you see that my credit is bad, ask follow up questions to verify the situation. Are you just bad at handling your finances or have you gone through a financial crisis yourself. In 2011, I helped to start up a new title company and the California Department of Insurance and our underwriters all did credit checks. They followed up with direct questions to me and we had no problems getting approved.
I think more importantly than credit checks are criminal background checks.

[Zach]

I think this should be mandatory for all lenders. Do you really want the guy with 10 counts of fraud and financial crimes sending you deals?

[factorfinders]

To clarify, my initial question wasn't about a background check, but a credit check. I am fine with your checking my criminal background, but not my personal credit. So in for my company to refer a deal to yours, you advocate that my personal credit needs to be reviewed and dinged? Why?

Once again, the bigger issue is that the funder claims that they don't check ISO crit, but insist upon leaving it in the application.

[Chambo]

To clarify, my initial question wasn't about a background check, but a credit check. I am fine with your checking my criminal background, but not my personal credit. So in for my company to refer a deal to yours, you advocate that my personal credit needs to be reviewed and dinged? Why?

Once again, the bigger issue is that the funder claims that they don't check ISO crit, but insist upon leaving it in the application.

I believe that is soon to be against the law in NY State.

[happysales]

I believe that is soon to be against the law in NY State.

It is already against the law to check an employee or potential employees credit report in NY. I can't see how they can regulate checking a credit report to determine if one business wants to do business with another one.

[len@accfunding.com]

You think having your credit pulled is a big deal? When I got my mortgage lenders license in New York, in 2005, I had to hire a private investigator and pay him to do a complete background check on me which included having my fingerprints taken. The final report that he needed to send to the state was the size of a phone book.

To clarify, my initial question wasn't about a background check, but a credit check. I am fine with your checking my criminal background, but not my personal credit. So in for my company to refer a deal to yours, you advocate that my personal credit needs to be reviewed and dinged? Why?

Once again, the bigger issue is that the funder claims that they don't check ISO crit, but insist upon leaving it in the application.

[FUNd]

You think having your credit pulled is a big deal? When I got my mortgage lenders license in New York, in 2005, I had to hire a private investigator and pay him to do a complete background check on me which included having my fingerprints taken. The final report that he needed to send to the state was the size of a phone book.

Fingerprints are pretty standard in the finance biz. My girlfriend worked as a teller at Bank of America and had to have them done. This space is the most lenient of any I know as far as background investigations, it needs to change, and no I don't mean we need the feds helping us.

[Chambo]

Fingerprints are pretty standard in the finance biz. My girlfriend worked as a teller at Bank of America and had to have them done. This space is the most lenient of any I know as far as background investigations, it needs to change, and no I don't mean we need the feds helping us.

Every Stock Broker has to have it done. Also has to list ALL employment for last ten years. Cannot have more than a 2 month void in that time frame either (so your prison time for two years will be a problem) Nothing new here & a welcome change.

[spellman]

please sir you do 1099s w-2s checks on workers there in new york?

[Lexgroup]

I think this should be mandatory for all lenders. Do you really want the guy with 10 counts of fraud and financial crimes sending you deals?

Hell no LOL. Here's an interesting article - http://www.bloomberg.com/bw/articles...erest-loans#p1 - some familiar names here