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08-06-2015, 09:15 AM #1
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Iso agreements
Is it me or does almost every funding company get almost offended and/or drag their feet the minute a real ISO wants to redline their ISO Agreement. They solicit and chase you and then in one breath they speak about how they only like and want "good business" but in the next breath get upset when a real ISO wants to redline their agreement. Some of us spend millions on marketing then millions on our SG&A too, how could we not want to redline our agreements and understand what we are signing? I see all these advertisements for funders who want business but what kind of business are they attracting with these one sided agreements? Anyone else see that?
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08-06-2015, 09:31 AM #2
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I like when an ISO redlines my agreement. Shows they actually care about what they attach their name to.
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08-06-2015, 09:37 AM #3
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I guess it depends on the degree of redlining. If half of the document gets scratched out, then they'd be understandably upset. A few marks here and there shouldn't cause any concern.
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08-06-2015, 09:44 AM #4
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08-06-2015, 10:20 AM #5
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I tend to agree with GCS. It shows they are actually reading the agreement and are thoughtful. It is usually a strong predictor of the level of service you will receive and quality of submissions with regards to your targets. There are some items a lender may not change ever, but I am sure there are always items that are flexible and open for discussion.
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08-06-2015, 10:31 AM #6
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I agree, the ISO's that read and ask questions about the agreement are going to be the ones who send over deals that are in your box and have a good chance of being funded. Also you have to be able to communicate with your lender to get certain deals done, if you aren't able to agree on the ISO agreement it's not a good sign for the future relationship.
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08-06-2015, 10:36 AM #7
From what I have seen it is the last 6 months where I have noticed the ISO agreements with some companies begin to move towards the ridiculous.. My favorite that I have seen was a clause that said if a certain number of deals are not funded each quarter then you are not entitled to commissions on renewals.. I won't name banks but it is safe to say we do not work with this funding company..
John Celifarco
Managing Partner
Horizon Funding Group
3423 Ave S
Brooklyn, NY 11234
T: (347) 773-3990 | F: (718) 795-1990
Linkedin: Profile
Email: john@horizonfundinggroup.com
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08-06-2015, 10:45 AM #8
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i recently had a new c and d paper shop that was giving 3 month approvals have a 90 day clawback in their agreement . also had a clause if you don't fund with them for a month you lose all your renewals . Since i crossed out that line and turned the 90 to 30 they have never gotten back to me .
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08-06-2015, 01:04 PM #9
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The ones who are not penny wise and dollar foolish will be amenable to changing it for good 7 figure volume with single digit bad debts. Tough to find them in the masses, very few operate that way. There are obviously a good amount of brokers who are running clean businesses, soon the majority will be expecting fair ISO Agreements. I know I always have, and in turn I've always done good business.
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08-06-2015, 01:17 PM #10
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I guess it depends on the person. I have an A Paper Funding company that has in-house sales that send over 40 Files a day and they sent back the ISO Agreement with no changes (many in fact that don't go back and forth) and then i have the ISO that sends 1 file a week and they took the ISO agreement apart line by line. However I respect both!
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08-07-2015, 10:46 AM #11
Good riddance, that seems pretty ridiculous haha. Essentially saying that in many cases, if the merchant defaults over the course of the entire term (albeit 3 months) you're stuck with a clawback. I can understand an agreement under the basis of a certain amount of business being referred, as most reputable funders want to work with reputable shops as well - but foreseeably losing all your renewals after a bad month is something I'd run from as well!
RYAN RIDGWAY Managing Partner, Strategic Capital
Office: 800.440.6448 | Direct: 816.298.0966 | Fax: 816.298.0857
10551 Barkley St. Suite 403 Overland Park, KS 66212
rridgway@capitalwithstrategy.com | www.capitalwithstrategy.com
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08-07-2015, 12:17 PM #12
Considering contracts are designed by the other parties attorneys , it makes sense to read them and redline areas that seem unfair to have a middle ground result.
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