[fma123]

Ouch, just found out 3 broker shops shut down recently in my city...yikes!- Is that what is going around in the industry? I heard it was slow but wow closing shops is never good...any feedbacK???

[MCNetwork]

The landscape is littered with hundreds of broker shops that closed or just opened recently. Funding companies are also closing or merging operations with stronger players. Survival of the fittest!

[ridextreme]

Broker shops have been coming and going for years, this is nothing new at all... smh

[J.Celifarco]

hard enough to keep up with what funders are shutting down, trying to keep track of ISO's you would go crazy. ISO come and go every day.

[funding pro]

Renewals are down. Most ISOs and funders only make money on renewals. Funders (see OnDeck) are tightening as well. If you dont have excess cash flow, its going to be a quick exit for many ISOs.

[golf2014]

You created a op on this ?

[fma123]

you guys are right, just coincidence i guess...i just figured since these 3 shops were there for over 3 years i found it odd...oh well, all good

[J.Celifarco]

Renewals are down. Most ISOs and funders only make money on renewals. Funders (see OnDeck) are tightening as well. If you dont have excess cash flow, its going to be a quick exit for many ISOs.

100% agree with this statement. This is the result of stacking that is very rarely spoken about. Renewal business which at one point is what got companies through a tough month is now not as big a revenue stream.. Makes the slower month much harder for a smaller company

[funding pro]

John, do you think it is just stacking? I mean stacking has been around for years. I've even seen some of the stackers tighten up over the last 6 months. Its not like there is some new stacking company that is doing something out of the ordinary.

[MCNetwork]

It's primarily the high cost of client acquisition. Most shops can no longer afford the marketing or amount of personnel it takes to bring in consistent deal flow. Stacking and increased competition is reducing an ISO's renewal rate. High acquisition cost plus fewer renewals means that many ISO shops are now running in the red.

[J.Celifarco]

John, do you think it is just stacking? I mean stacking has been around for years. I've even seen some of the stackers tighten up over the last 6 months. Its not like there is some new stacking company that is doing something out of the ordinary.

In the case of renewals absolutely thats what I think it is. Its a build up when it was just seconds we saw a drop in renewals but nothing too drastic, Then as 3rds and further on came into the picture renewals dropped more. As more time as passed the pressure these stacks put on our portfolios has just resulted in dramatic decreases in renewal business as the first position companies have also tightened up.. It doesnt take a new company to cause this just the pressure they have put on on funders overtime has built up, remember funders count on renewals as much as ISO's. In most cases the second deal is when the funder makes the real money not the first

[anonymous]

^ agreed. additionally I think P1 lender/funder reluctance to consolidate (with good reason) has played a big role. Consolidating multiple positions was business as usual at one point, now you actually have to time the deal properly and hope they don't bite on quick money in the mean time. Ultimately, the reset switch was much more accessible, allowing brokers to essentially recycle merchants rather than going after new business. So at the end of the day, we're really just going back to work at this point, after being spoiled for a couple years haha. IMO.

[Chambo]

100% agree with this statement. This is the result of stacking that is very rarely spoken about. Renewal business which at one point is what got companies through a tough month is now not as big a revenue stream.. Makes the slower month much harder for a smaller company

yeah, many ISO's fund a deal, then quickly stack on it to double up commissions. Either not caring, or not thinking about potential renewals. Then they start running low on marketing, or everything they get in has multiple positions already

And yeah, well, so end this story.