[mfs01]

Chambo,

Having their own sales staff is fine, but stealing deals????

That's just very bad business practice.

[Chambo]

Chambo,

Having their own sales staff is fine, but stealing deals????

That's just very bad business practice.

No offense to you or your ISO, but....

You are a small company, tight on cash as it is. What are you going to do? Sue them? With what capital? you only submit 10 deals or less a month, so if you threaten to leave, so what?

Now if you are FUNDING 20-25 deals a month with them or doing $1 mill a month as an ISO, then you are on a different level

[HeatherF]

No offense to you or your ISO, but....

You are a small company, tight on cash as it is. What are you going to do? Sue them? With what capital? you only submit 10 deals or less a month, so if you threaten to leave, so what?

Now if you are FUNDING 20-25 deals a month with them or doing $1 mill a month as an ISO, then you are on a different level

That is a pretty short sided view. All ISO/agents count no matter their submission level or their size. They all add up to the greater picture.

Direct Funders are popping up all over the place now and reputation is going to be coming into play a whole lot more as ISO's have more resources to go to. I know I sure would not want someone posting on a forum about how we shopped out his deal or stole his commission from him. His one post is seen by many and then those many talk to a lot and soon the whole industry knows. The market we cater to may be big but we operate in a small world and word gets around.

[staten]

That is a pretty short sided view. All ISO/agents count no matter their submission level or their size. They all add up to the greater picture.

Direct Funders are popping up all over the place now and reputation is going to be coming into play a whole lot more as ISO's have more resources to go to. I know I sure would not want someone posting on a forum about how we shopped out his deal or stole his commission from him. His one post is seen by many and then those many talk to a lot and soon the whole industry knows. The market we cater to may be big but we operate in a small world and word gets around.

Chambo works for Yellowstone. everyone knows they are the bootm feeders. is he saying he will screw over isos unless they have the money to sue?

[Sean Cash]

Chambo works for Yellowstone. everyone knows they are the bootm feeders. is he saying he will screw over isos unless they have the money to sue?

I don't think he was making a direct reference to the company he works for. He is just pointing out the inconvenient truth that people don't always want to hear in this industry or in any industry. A big company can use its leverage to bully really small companies. Sometimes it's complete BS but normally the small company complaining about getting screwed did not read their contract. That's almost always how it happens. ISO signs a contract that basically surrenders control of the deal and commissions. Everything goes well in the beginning until the bigger company decides to enforce the fine print in the agreement. The small company then stomps its feet.

Now if you were not so small, the bigger company may be willing to hold off on its right to take possession of the deals because of how much business is being transacted. Even On Deck Capital has clauses that give them the right to take your deal for themselves if they so choose if a certain amount of time passes or something happens. Maybe they'll enforce it. Maybe they won't. Don't like the contract? Don't sign it. Don't have an attorney reviewing your contracts? Then you probably will get screwed at some point down the road.

if you can't afford to hire a lawyer for just a couple hours to read, reword, or negotiate an agreement for you, then you're probably not going to survive in this industry. If you can't afford to sue someone or hire a lawyer when or if you get sued, then you probably won't survive in this industry. This business is extremely litigious and yet there are still so many battles that never make it to the courtroom. There are 989,830,588,340 ways to get sued or accused of something in financial services regardless of whether or not the allegations are true. If your contracts aren't iron-clad, then you're basically not building anything.

Now I know nothing about mfsglobal's case, but this whole "pretending to be a direct funder" thing is not a new trend. There are probably more than a hundred companies that operate as such. They're direct for deals they love and they farm out deals they don't. Whether or not you get paid depends on your contract. Whether or not they were transparent about this depends on your contract. Block out whatever they tell you and just refer to the contract.

What's important?
The contract
The contract
The contract
The contract
The contract
The contract
The contract

And if your contract was iron clad and it was definitely breached, sue. No one should be in financial services, especially this realm of it if they can't afford a lawyer.

[mfs01]

I agree with sean bash.

But on that note, MFS Global does not farm their deals out. We've built our business around the motto of being "ISO focused". If we don't want the deal, we'll simply tell the ISO, giving them an opportunity to get the deal approved elsewhere.

[JayBallentine]

I agree with sean bash.

We've built our business around the motto of being "ISO focused".

I was talking with a funder who felt that companies who are ISO focused will eventually fall by the way side. He mentioned this in passing - so I didn't get to fully grasp the "why" behind it. On it's face having brokers control paper limits some firms' abilities to profit from renewals... Was curious to know how you'd respond to this particular gentleman if he met you at a conference or something and said; "you don't have a shot if you're ISO focused!"

[Andy]

Chambo works for Yellowstone. everyone knows they are the bootm feeders. is he saying he will screw over isos unless they have the money to sue?

I can't speak for Chambo , never worked with him never spoken to him. I can say that I have experienced this from Yellowstone. And this is why we do not do any business with Yellowstone. When our company opened 3 years ago, we would occasionally submit to Yellowstone. Not often, because commission was not good, but they would sometimes do deals no one else would touch. We had 2 deals which Yellowstone declined to us after several days in underwriting, and then Yellowstone went to the merchant directly and funded both of them less than week later.

Another company that we have caught doing this is Advance Me. We had submitted them a $220,000 deal, they declined to us and gave it to one of their larger ISO's. Good thing we closed it through another funder

In my opinion, not worth the time and effort to sue. Simply take note of it, and never use that funder again. There are plenty of other options, and plenty of good companies that value their ISO's.