[Yankeeman07]

(Complete nube here, to the forum, to the alternative-lending industry, and to finance in general. Just got set up and started mktg)

Q: Do you volunteer your commission? Wait for them to ask?

Some ISO agreements require you to disclose it. When do you do it, and what do you say?

Thanks in advance

I'm anticipating you are joking - volunteer your commission structure?

I would want to review any ISO Agreement that requires me to disclose my commissions anyone.

BTW - if my memory serves me correctly, all contracts have a Privacy-Non-Disclosure Clause"

[Daily Fun]

I did review an ISO Agreement from a well-known MCA provider that requires me to disclose my commissions to merchants. That's the reason for my question.

(Terms and conditions of Agreement are defined in Agreement as Confidential Information, or I would share the name of the lender):

8. ISO Representations, Warranties, and Convenants.

• ISO will disclose to merchants the compensation that the ISO will receive from the Company in connection with the Program.

[Daily Fun]

I'm anticipating you are joking - volunteer your commission structure?

I would want to review any ISO Agreement that requires me to disclose my commissions anyone.

BTW - if my memory serves me correctly, all contracts have a Privacy-Non-Disclosure Clause"

Thanks Dave for taking the time to reply!

If I put myself in the merchant's shoes, if I were borrowing 60k @ 1.40 FR, and being informed I needed to repay 84k, I might reasonably ask "And how much of that goes to you for connecting me with the lender?"

If the guy hemmed and hawed or refused to answer, I might well conclude I'm getting stiffed, and try to get it lower elsewhere and start "shopping". (I'm the merchant in this example, it's a normal thing to try to cut costs, and that starts with knowing what they are.)

So to avoid the shopping reflex, I wanted to start off on the right foot with a good answer ready for the merchant. If someone asks this, I assume the answer isn't "None of your business," that there has to be a diplomatic way of dealing with it, even if it doesn't include revealing the number.

Cheers

[Steven_O]

Thanks Dave for taking the time to reply!

If I put myself in the merchant's shoes, if I were borrowing 60k @ 1.40 FR, and being informed I needed to repay 84k, I might reasonably ask "And how much of that goes to you for connecting me with the lender?"

If the guy hemmed and hawed or refused to answer, I might well conclude I'm getting stiffed, and try to get it lower elsewhere and start "shopping". (I'm the merchant in this example, it's a normal thing to try to cut costs, and that starts with knowing what they are.)

So to avoid the shopping reflex, I wanted to start off on the right foot with a good answer ready for the merchant. If someone asks this, I assume the answer isn't "None of your business," that there has to be a diplomatic way of dealing with it, even if it doesn't include revealing the number.

Cheers

I like it... fresh... new... so full of positivity (and not tarnished with thick skinned MCA). LOL.

Some merchants will want to know what you're making. If you are showing them the value that you bring to the table then there should be no discussion about how much you make. That doesn't mean you shouldn't feel the need to address the question head on. That also means you should feel the burn in the face if you are ripping them off with 15 points and a 10 point psf and they ask... if you can't tell someone what you are making with a straight face - maybe you don't feel you earned it.

2%, as a success fee (what Micah said) - is reasonable to charge a business owner on financing you've helped secure, if you are making 3-7 points from the funder. Just be ready to disclose it.

On the flip side of the coin - I wouldn't open a conversation with "this is what I typically make". Especially when you've seen some of their margins!

[NoBigDeal]

On the flip side of the coin - I wouldn't open a conversation with "this is what I typically make". Especially when you've seen some of their margins!

!!!

[Daily Fun]

I like it... fresh... new... so full of positivity (and not tarnished with thick skinned MCA). LOL.

Some merchants will want to know what you're making. If you are showing them the value that you bring to the table then there should be no discussion about how much you make. That doesn't mean you shouldn't feel the need to address the question head on. That also means you should feel the burn in the face if you are ripping them off with 15 points and a 10 point psf and they ask... if you can't tell someone what you are making with a straight face - maybe you don't feel you earned it.

2%, as a success fee (what Micah said) - is reasonable to charge a business owner on financing you've helped secure, if you are making 3-7 points from the funder. Just be ready to disclose it.

On the flip side of the coin - I wouldn't open a conversation with "this is what I typically make". Especially when you've seen some of their margins!

Thanks Steven! Really great insights. I don't believe in gouging. There's enough to go around without that.

(Oh, and the rhino hide isn't a problem, trust me. Comes from a quarter century of selling over the phone, to people who don't want to be sold, things they can't see and don't want to buy, for prices they don't want to pay, and having them do it right now :-) Maybe I can cause money to seem like an attractive enough product to make a few buckos, we'll find out

[StealMyDeal]

Thanks Dave for taking the time to reply!

If I put myself in the merchant's shoes, if I were borrowing 60k @ 1.40 FR, and being informed I needed to repay 84k, I might reasonably ask "And how much of that goes to you for connecting me with the lender?"

If the guy hemmed and hawed or refused to answer, I might well conclude I'm getting stiffed, and try to get it lower elsewhere and start "shopping". (I'm the merchant in this example, it's a normal thing to try to cut costs, and that starts with knowing what they are.)

So to avoid the shopping reflex, I wanted to start off on the right foot with a good answer ready for the merchant. If someone asks this, I assume the answer isn't "None of your business," that there has to be a diplomatic way of dealing with it, even if it doesn't include revealing the number.

Cheers

Dude you're out of your goddamn mind if you think that conversation is going to end well. You do not discuss commission with merchants. Ever. They aren't going to ask, and if they do, tell them that's not your department. Your job is to get them the best terms they qualify for for the money they need to accomplish their objectives today. Maintain control of the conversation at all times.

Also, this is a good reason to charge a modest PSF. When you charge a PSF, you can use that as the basis of your compensation. "Mr. Merchant, as you know we charge a $495 origination fee upon funding which compensates my team for our work in securing and processing this transaction for you. I don't know where you're getting your information about commission from. But let's get back to how this $80K advance is going to help you bring your employees back next week..." And then, if necessary to get the deal done, cut or waive your PSF. Presto, your commission remains untouched.

[Daily Fun]

Dude you're out of your goddamn mind if you think that conversation is going to end well. You do not discuss commission with merchants. Ever. They aren't going to ask, and if they do, tell them that's not your department. Your job is to get them the best terms they qualify for for the money they need to accomplish their objectives today. Maintain control of the conversation at all times.

Also, this is a good reason to charge a modest PSF. When you charge a PSF, you can use that as the basis of your compensation. "Mr. Merchant, as you know we charge a $495 origination fee upon funding which compensates my team for our work in securing and processing this transaction for you. I don't know where you're getting your information about commission from. But let's get back to how this $80K advance is going to help you bring your employees back next week..." And then, if necessary to get the deal done, cut or waive your PSF. Presto, your commission remains untouched.

Thanks for the suggestions. I realize I'm "out of my goddamn mind" already. Thought that was part of the job description