[MissMCA]

This is squeezing out the mom and pop ISOs who are not capitalized well enough to participate. A wave of industry consolidation has already started.

That's why companies like The Factor Exchange exist. The "mom and pop" ISOs and "Onesy-Twosey" brokers are backed by one giant ISO network and The Factor Exchange assumes half of the risk by syndicating 50% on nearly ever deal...
The massive volume of FEX submissions to lenders gives the ISOs power to negotiate for better rates and terms, One point of submission reaches 15+ lenders, the merchants credit is only pulled once, and the commission is passed straight through to the ISOs because FEX makes their money from participation.
Companies like this empower the smaller brokerages...

[Scott Williams]

Some funders like the "mom and pop" ISO's once they have a good track records down. The funder knows the ISO directly and the ISO is the main point of contact with the merchants so he/she knows all the details about the deal/business. I think having a small ISO that has a proven track record of well performing clients is very valuable to some direct funders.

[MissMCA]

Some funders like the "mom and pop" ISO's once they have a good track records down. The funder knows the ISO directly and the ISO is the main point of contact with the merchants so he/she knows all the details about the deal/business. I think having a small ISO that has a proven track record of well performing clients is very valuable to some direct funders.

I agree with you Scott, smaller ISOs tend to be very hands on with their merchants and are quick to obtain stipulations and requested financial documents.
Funder's do value and appreciate this. Unfortunately this is not the case for all direct Funders, this applies more to the larger direct funders who are primarily volume focused...
I do not believe they spend as much time building a relationship with the smaller one-man brokerages (and please correct me if I am wrong)... The UW staff seems to be far more communicative if you are a larger producer...

It takes far more persistence from the smaller ISO to initially "get their foot in the door" to start building that relationship with the lender, and even then, there is less flexibility in negotiating rate and term if the ISO is not assuming any of the risk by participating in the advance.

[Sean Cash]

That's why companies like The Factor Exchange exist. The "mom and pop" ISOs and "Onesy-Twosey" brokers are backed by one giant ISO network and The Factor Exchange assumes half of the risk by syndicating 50% on nearly ever deal...
The massive volume of FEX submissions to lenders gives the ISOs power to negotiate for better rates and terms, One point of submission reaches 15+ lenders, the merchants credit is only pulled once, and the commission is passed straight through to the ISOs because FEX makes their money from participation.
Companies like this empower the smaller brokerages...

Woah, back up. The factor exchange is involved in the MCA space and will syndicate on ISO deals?? I have heard of your platform but didn't think it was at all applicable to MCA. Please elaborate

[MissMCA]

Woah, back up. The factor exchange is involved in the MCA space and will syndicate on ISO deals?? I have heard of your platform but didn't think it was at all applicable to MCA. Please elaborate

Sean, The Factor Exchange revolves entirely around Merchant Cash Advance. There are often misconceptions when people hear "Factor Exchange" they assume FEX is a factoring company or something similar to "Funders Cloud" not the case.

The Factor Exchange is the largest aggregation group/originator and investor in the industry.
The platform is quite simple:
FEX provides one point of submission for ISOs that will distribute and submit their files to over 15 of the most reputable direct funders in the industry (according to their UW guidelines).
Credit is pulled ONCE by FEX, lenders are not allowed to pull their own additional credit reports.
Offers are flowed back to the ISO/Broker by a designated FEX Account Manager in real time.
The broker has 10+ offer options to choose from. If they do not find any of the offers appealing, the AM will go to bat with UW to obtain the rates and terms the merchant is looking for.

Beyond the convenience of a "one-to-many" submission point, the true advantages and benefits come from Factor Exchange syndicating 50%-70% on every funded deal.
Because The Factor Exchange is assuming half of the financial risk, advance amounts are often higher, rate and term negotiations are more effective, UW is generally more flexible.
Relationships between FEX and Lenders on the FEX network are at a C-Level, agreements have been set in place for higher commissions (because of massive submission volume), and because FEX is making money from syndication there is no need to charge the brokers a fee and commissions are passed straight through.

Some brokers are hesitant at first because they are very hands on with their merchants, and they question who the file "belongs to" after submission.
It is very important that brokers are aware that they will NEVER be circumvented. Ever.
FEX understands that a brokers book is their livelihood, and they want their portfolio to flourish so they can build a solid foundation of renewals.
FEX does not have an in-house brokerage and will never compete with their brokers, and Lenders are NOT ALLOWED to renew merchants without the brokers prior consent.

If you want further details contact KC@FactorExchange.com or 888-819-5643.