[Michael I]

Isn't it cray?

There are two issues here: The fact that many Brokers characterize themselves as being an "Adviser of Capital Products" but don't even know how to qualify (cough* see deal bin) and the enabling of some Funding Companies that allow the acceptance of files based on minimal knowledge just to retain a number of submissions.

"Brokers" should know certain processing guidelines and inform their Merchants before the submission process but many of them do not know the right questions to ask or feel if they give the Merchant the "heads up" - they will not want to proceed. Thus the fast brokering, get me an offer, pull credit all over the place within 3 days comes in.

If the Broker/Funders honestly cared about the "well being" of the Business, rates wouldn't offered at 1.50 for a business thriving and a credit score over 700- even on a second position. Now were just trying to get that new gucci watch and show off at the bar...

dont throw this back onto the brokers , lenders need to take some responsibility here . they should cut off iso that are constantly submitting files not in their box. but bottom line they should not be pulling credit for no reason

[CreditGuy]

dont throw this back onto the brokers , lenders need to take some responsibility here . they should cut off iso that are constantly submitting files not in their box. but bottom line they should not be pulling credit for no reason

No, lenders do not. As a lender, we see brokers/ISOs/partners/whatevers that use us as their UW all the time. Even the bigger shops that send us tons of deals don't appear to be doing any preliminary UW outside of very high level stuff like screening out strip clubs and pot shops. Some ISOs, who would be considered "sophisticated and intelligent" by some on this board, have approval rates in the high single/low double digits. As a lender, we don't care that much about this type of behavior because we get a lot of data from it. The types of behavior we do care about, and will cut brokers off for, is stuff like stacking, high default rates, high fraud rates, etc.. Brokers always remind us that these are their customers and they own the relationship, well that includes where and how you submit deals. You can't have it both ways.

Now, a good lender will have a process that screens out on all file data that doesn't require a credit bureau before pulling credit, but that's a different topic.

[WhoisKingsley]

No, lenders do not. As a lender, we see brokers/ISOs/partners/whatevers that use us as their UW all the time. Even the bigger shops that send us tons of deals don't appear to be doing any preliminary UW outside of very high level stuff like screening out strip clubs and pot shops. Some ISOs, who would be considered "sophisticated and intelligent" by some on this board, have approval rates in the high single/low double digits. As a lender, we don't care that much about this type of behavior because we get a lot of data from it. The types of behavior we do care about, and will cut brokers off for, is stuff like stacking, high default rates, high fraud rates, etc.. Brokers always remind us that these are their customers and they own the relationship, well that includes where and how you submit deals. You can't have it both ways.

Now, a good lender will have a process that screens out on all file data that doesn't require a credit bureau before pulling credit, but that's a different topic.

"As a lender, we don't care that much about this type of behavior because we get a lot of data from it." Kudos to you but are you utilizing that data to build up your army and be the example and not the enabler? And if you condone the behavior because it gives you numbers, how is your default rate? Do you survey your Merchants on their experience? How is your renewal rate? I know you (or most) answer these questions but how do your answers affect the small structural differences you can make with your Partners? It only helps you both...

[WhoisKingsley]

dont throw this back onto the brokers , lenders need to take some responsibility here . they should cut off iso that are constantly submitting files not in their box. but bottom line they should not be pulling credit for no reason

Oh, 100% I am not putting this on the Broker.

As a Direct Company who takes on a wholesale company as a Partner in any capacity- they should have more than just submission criteria and guidelines. Since there are low entrance barriers for either a direct or wholesale company to come into the AltFi space and solicit Businesses- both are equally as guilty when it comes to the "common sense" ethics. Who is responsible for laying down the law comes from the Funder/Lender themselves. Unfortunately, there is a lot of enabling since one company can offer great products and service but have a more strict submission criteria and overall partner guidelines than that of a Funder who says "send us anything!" when their investors/money doesn't really want everything.

Bottom line: Preliminary offers should be based on financials and health of the business and overall REQUEST AND USE OF FUNDS. Final approval numbers and payments: Pending a background and credit approval.

Broker: The pre-qual questions asked by an Adviser to a Merchant like "Do you know your credit score?" or "Are there any derogatory marks on your credit report that would raise concerns from our underwriting office that we should make note of before starting the submission process?" should clear up any initial thoughts on the "Who should I send this deal to?"

Funder: If you need to pull credit to ACCEPT a file, then you are wasting your time and money and should review your submission department and how you intake deals. Yes, you may be afraid that your offer may be shopped- but it's going to happen anyway so you might as well not spend that money on that credit pull or paying your UW for wasted time (my humble opinion)

[ridextreme]

dont throw this back onto the brokers , lenders need to take some responsibility here . they should cut off iso that are constantly submitting files not in their box. but bottom line they should not be pulling credit for no reason

you should understand what their process is. Every file that comes in goes through a process. The first process is entering them into their system, and running credit, before it's placed on an underwriter's desk. The girl who is running credit is not an underwriter. It's not up to her what deal will get approved and what deal does not qualify. She does her job, then passes the file along.

The broker should know ahead of time what file should be placed where, instead of shotgunning them out blindly to see who gives them the best approval.

[Michael I]

you should understand what their process is. Every file that comes in goes through a process. The first process is entering them into their system, and running credit, before it's placed on an underwriter's desk. The girl who is running credit is not an underwriter. It's not up to her what deal will get approved and what deal does not qualify. She does her job, then passes the file along.

The broker should know ahead of time what file should be placed where, instead of shotgunning them out blindly to see who gives them the best approval.

exactly the problem and that includes if they go to lender directly