[Funder Mark]

A big problem I see with backdooring is largely due to the ISO's. Yesterday I emailed an ISO, told him what I can do to help him on a particular deal. Before we spoke on the phone, before he sent me a reply email, before he knew what my underwriting requirements are, he sent me the deal.

Is it possible that this guy had seen my company on statements before? Sure. Could he have called some friends, asked if I was legit? Absolutely. But to send in a deal before speaking, without knowing my minimum requirements, without even seeing my ISO agreement just seems to be VERY reckless.

Brokers also need to do their homework on funders before sending out deals, and make sure not to send out deals to too many people. Yesterday an ISO copied me on a submission, along with 6 other funders who compete in my general area. Any one of us could backdoor the file, and say it was one of the others. So before ISO's complain about backdooring, do your homework, make sure you work with trusted partners, and not too many either.

[jotucker1983]

A big problem I see with backdooring is largely due to the ISO's. Yesterday I emailed an ISO, told him what I can do to help him on a particular deal. Before we spoke on the phone, before he sent me a reply email, before he knew what my underwriting requirements are, he sent me the deal.

Is it possible that this guy had seen my company on statements before? Sure. Could he have called some friends, asked if I was legit? Absolutely. But to send in a deal before speaking, without knowing my minimum requirements, without even seeing my ISO agreement just seems to be VERY reckless.

Brokers also need to do their homework on funders before sending out deals, and make sure not to send out deals to too many people. Yesterday an ISO copied me on a submission, along with 6 other funders who compete in my general area. Any one of us could backdoor the file, and say it was one of the others. So before ISO's complain about backdooring, do your homework, make sure you work with trusted partners, and not too many either.

Right, but remember when I was promoting the concept of "ISO Underwriting" on both sides of the equation (to the funder/lender and to the merchant), you guys for the most part disagreed with me lol.

The situation you described doesn't occur with "ISO Underwriting" as ISOs/Brokers will do all research, due diligence, etc., on partners and prospective clients upfront.

- They will research who funders/lenders are such as if they are legit or actually brokers, how their underwriting criteria works, and what type of "paper grade" said platform usually boards.

- They will do upfront pre-qualification on prospective clients before they just shoot them off somewhere and before they "take an app", to know if the deal fits better for X platform or Y platform, or for X product or Y product.

- This makes for a much more efficient, structured, professional process all the way around.

But remember, you guys were against this lol. So unfortunately, this is the situation that you will continue to get. You get more and more ISOs not doing any research, just blasting off apps everywhere, running up unnecessary inquiries on credit reports of merchants, wasting resources of funders/lenders, getting back-doored, and a host of other issues because the process is not structured and unprofessional.

[WestCoastFunding]

Yesterday an ISO copied me on a submission, along with 6 other funders who compete in my general area.

Haha. Is copying multiple funders on a submission a thing now? They didn't even BCC? That's hysterical.

[J.Celifarco]

A big problem I see with backdooring is largely due to the ISO's. Yesterday I emailed an ISO, told him what I can do to help him on a particular deal. Before we spoke on the phone, before he sent me a reply email, before he knew what my underwriting requirements are, he sent me the deal.

Is it possible that this guy had seen my company on statements before? Sure. Could he have called some friends, asked if I was legit? Absolutely. But to send in a deal before speaking, without knowing my minimum requirements, without even seeing my ISO agreement just seems to be VERY reckless.

Brokers also need to do their homework on funders before sending out deals, and make sure not to send out deals to too many people. Yesterday an ISO copied me on a submission, along with 6 other funders who compete in my general area. Any one of us could backdoor the file, and say it was one of the others. So before ISO's complain about backdooring, do your homework, make sure you work with trusted partners, and not too many either.

I completely agree with this. I think more then half the stealing of deals that goes on could be avoided if a little common sense was used by iso's before submitting deals to banks.. People are so worried about getting the approval that they don't consider what can go wrong, then when something goes wrong they run around screaming "THEY STOLE MY DEAL".
BLAME FOR THIS I THINK FALLS ON BOTH SIDES

[Michael I]

Haha. Is copying multiple funders on a submission a thing now? They didn't even BCC? That's hysterical.

This is the main issue, even halfway trusted lenders when they see 6 cc they will be more tempted just to screw the moron iso.

[WestCoastFunding]

Speaking of CCs, what's with these emails fro
companies selling leads blasting out 200 email addresses on a CC. Not even blind copying.

[J.Celifarco]

they have a 1 in 6 chance of funding the deal. If Iso's want loyalty they should show some and submit to 2 or 3 funders instead of 6.. There is no excuse for stealing deals ever but we as ISO's want loyalty we should show some in return and try to submit where we think the deal will fund

[NoBigDeal]

Haha. Is copying multiple funders on a submission a thing now? They didn't even BCC? That's hysterical.

I had one even better. ISO Rep in Funder A was sending out a promotional email blast to their network of ISO's...forgot to BCC the group. My ISO forwarded the email to me and said, "I know Funder A is in your space, Happy ISO Hunting"

I felt like it was CAN Leak 2.0 (on a smaller scale, there were only about 50 ISO's on the email blast)

[CraaaCraaa Radio]

Speaking of CCs, what's with these emails fro
companies selling leads blasting out 200 email addresses on a CC. Not even blind copying.

What a snapper move!!!

[dpFund]

they have a 1 in 6 chance of funding the deal. If Iso's want loyalty they should show some and submit to 2 or 3 funders instead of 6.. There is no excuse for stealing deals ever but we as ISO's want loyalty we should show some in return and try to submit where we think the deal will fund

I totally agree with you on this John.

As a direct funder, I pay thousands of dollars a month to my analysts, pre-qualifying deals that come through our office. It is not unusual to spend hours working on a deal prequalifying it, getting me in a direct meeting with the client, moving it up to the chain for full underwriting, only to find out that the ISO sent it to six other lenders and they decided to go with someone else.

When I find this out, the ISO drops onto my **** list since they wasted my time and money. A little honesty up front goes a long way.

If an ISO wants to shop the deal to six lenders then have at it. When the client balks at price, daily payments or some other reason they won't bite, then bring it to me and we will see what we can do. Just be straight with me and don't bull**** me.

[MCNetwork]

As a direct funder, I pay thousands of dollars a month to my analysts, pre-qualifying deals that come through our office. It is not unusual to spend hours working on a deal prequalifying it, getting me in a direct meeting with the client, moving it up to the chain for full underwriting, only to find out that the ISO sent it to six other lenders and they decided to go with someone else.

It should only take up to 15-20 minutes to prequalify a deal. Some funders can do it in 5 minutes (run credit, plug revenue numbers in a calculator, spit out pre-approvals). Funders know that only 10-20% of their approvals will fund so they deploy most of their underwriting resources AFTER the signed contracts are in-house. If you're spending hours on a prequal then you're doing it wrong.

[J.Celifarco]

I totally agree with you on this John.

As a direct funder, I pay thousands of dollars a month to my analysts, pre-qualifying deals that come through our office. It is not unusual to spend hours working on a deal prequalifying it, getting me in a direct meeting with the client, moving it up to the chain for full underwriting, only to find out that the ISO sent it to six other lenders and they decided to go with someone else.

When I find this out, the ISO drops onto my **** list since they wasted my time and money. A little honesty up front goes a long way.

If an ISO wants to shop the deal to six lenders then have at it. When the client balks at price, daily payments or some other reason they won't bite, then bring it to me and we will see what we can do. Just be straight with me and don't bull**** me.

all this said if the bank tries to backdoor the deal that makes them automatically wrong no matter how many banks the ISO submitted to. If a bank doesn't like an ISO's process turn them off and dont work with them. This doesn't mean the bank has any right to try to fund the deal on their own

[MCAVeteran]

this is the difference between retail and wholesale. wholesale model you will not convert or have the loyalty like a retail model. hence, why a lot of funders went retail to control the sale. unless you build meaningful business relationships with your iso partners, that file you received, is sitting with a handful or more funders and BDs same day. I do agree though, the funders should not think because they get a deal, they have a right to backdoor the deal because the ISO annoys them. But, you will find, some of the ISO agreements have crafty verbiage that allows them to solicit the merchant, making it fair game to sell direct to your deals.

[Chambo]

the ISO should just be cut off for wasting time and energy.

just like any relationship...if you are putting too much work into it and not getting anything out of it, cut bait and move on

[dpFund]

It should only take up to 15-20 minutes to prequalify a deal. Some funders can do it in 5 minutes (run credit, plug revenue numbers in a calculator, spit out pre-approvals). Funders know that only 10-20% of their approvals will fund so they deploy most of their underwriting resources AFTER the signed contracts are in-house. If you're spending hours on a prequal then you're doing it wrong.

Ha! Yep, I bet that is how Dealstruck, Can Capital did their underwriting. And we can see how it worked out for them, can't we? I'll bet they (and you) never looked at a P&L or Balance Sheet.

We look first at the P&L to determine true net income. Then we look at what the monthly payment would be for their desired level of funding. If they cannot afford the payment, it is a decline. That part takes ten minutes. If the client meets that threshold, it is all the work behind that which takes the time. Funders who do not do their homework go out of business.

[Karen37a]

Isos do that,but so do the brokers on the Isos team. Throw **** against the wall and see if it sticks . But I have also had on 4 separate occasions lenders/funders send me something by accident . I myself have sent the same file to the same lender twice...their response" we didn't like it the first time, we really do not like it now"

I told brokers on my team that if they dump off ****ty files again, I was going to make them pay the cost of the credit pull or share in processing fees etc 1099 ... then they all called in or came into my office and said ...dont run this one and that one...I asked why? They said those files have little to no chance of getting approved. I said "well you gave it to me so lets give it a shot"...they panicked and yelled no no no. I asked them "why did you give it to me if you knew it had no chance of being funded?" They pretty much said that it wasn't their time that was wasted or cost of processing, so what the heck, they thought they would give it a shot.. I had to say ( being evil ) " too late its done already" ...bad bad reaction from them, horrible to watch but predicted. I then told them I didnt actually do it but wanted to see if the ****ty files were purposeful.....Then they chase me around the df .( this was over a year ago)

I do a pre pre underwriting on all the files because I myself do not want to waste time or have or give false hope.I still do not catch things on the files. Lenders should release the Isos from their contract if they are bad paper machines, or dont have a certain closing ratio/ approval ratio..I release the brokers because I do not need junk dumped on me and I also want the Funders to want to get my files, not think OMG here comes another mess of a decline.

In end I rationalize it to keep my sanity... "If everyone was great at what they or we do, there would be alot more competition, and we have enough already."

[MCNetwork]

We look first at the P&L to determine true net income. Then we look at what the monthly payment would be for their desired level of funding. If they cannot afford the payment, it is a decline.

So P&L's are required for the initial submission? You're probably the only MCA funder that asks for that upfront. And instead of declining a merchant if they don't qualify for the desired amount, why don't you approve them for a lower amount instead? It's the broker's job to manage the merchant's expectations and sell the lower approval amount.

[Chambo]

yeah, but brokers rarely do that. I am hearing more and more "the merchant needs"

How about "what does the merchant qualify for?"

Too many reps/brokers out there these days are just paper pushers, doing the merchants' short term bidding

[MCNetwork]

Yep that's the difference between order takers and salesmen. Unfortunately there are very few actual salesmen out there. A salesman who can say "Sorry buddy you don't qualify for that. Now instead of trying to bite off more than you can chew why don't you take an amount you can handle."

[RichardGerard]

How Dealstruck (never worked with CAN) did their Underwriting had little to do with where they are now. Market segmentation and cost of capital did.

I had lunch today with a substantial bank I work with here in the NYC Metro area, that provides approvals within 2 DAYS ON FULLY COLLATERALIZED term loans under $1M, and closes them within 2 weeks of having all requested docs. Submission to Funding in less than 3 weeks.

Determining credit, background, verifying collateral, reconciling the financial statements and DSCR CAN be done expeditiously.

[Karen37a]

I agree with Chambo and MCN

Also some of the merchants are bullies( maybe just to women). Like I want this and this and this and I want it NOW or by Friday because I am talking with 3 brokers.

I cut if off right there try to explain things...explain they are really not in the drivers seat to boss Lenders around with their 599 credit score and 5 nsfs.. if not..go to the 3 brokers ( nicely )

[dpFund]

So P&L's are required for the initial submission? You're probably the only MCA funder that asks for that upfront. And instead of declining a merchant if they don't qualify for the desired amount, why don't you approve them for a lower amount instead? It's the broker's job to manage the merchant's expectations and sell the lower approval amount.

That's just it. I am not a MCA funder. :-)

And yes, if a client does not qualify for the requested amount, we absolutely recommend the lower amount they will qualify for.

The challenge is, most of the files I get have existing cash advances and I do not stack. I need to pay off all the cash advances or none of them. So if a client will not qualify for the total amount of cash advance balances, we let the broker know what the balances need to be at in order to prequalify for funding.

Hope this helps.

[WestCoastFunding]

When your providing 2-3 year terms with monthly payments, asking for P&Ls isn't too
much to ask for.

[MCNetwork]

That's just it. I am not a MCA funder. :-)

That explains it! I was comparing apples to oranges. My bad...

[dpFund]

That explains it! I was comparing apples to oranges. My bad...

No problem, we are good.

Perhaps we should talk about how to best work together.

Feel free to reach out!

Best,

Dan Page