Reupping this blog post titled "Direct Funder or Not" that I wrote a couple of years back and just updated because it's still so relevant for MCA funders. I still come across new funders that don't want to offer up the transparency needed so that brokers can be confident in their company.
Here's a snippet:
"How should a company prove they are a direct funder
When a company that is not well-known claims they are a direct funder, there is usually a request to prove as much for any broker who might be inquiring to sign up with them.
An ISO agreement alone doesn’t prove they are a direct funder.
Read the ISO agreement carefully!"
Also:
"The following are a few ways to prove to be a direct funder:
Provide a copy of a blank contract. This will show the responsible parties involved.
Give direct links to court records for previous filings against debtors.
Provide a merchant(name blocked out) bank statement showing where a deposit for funding took place and ACH withdrawals.
If a ‘funder’ does not want to supply any of this information then you may want to reconsider signing up with that company. "
Look at the servicing clause in the contract. That will tell if it's a white label or not .
No funder would change the name in that clause if they run a good shop .
@STEVE BENJAMIN talk about calling it like it is!
Also keep in mind that there are many direct funders who are not taking on new brokers or have ISO volume guidelines that brokers don't qualify to meet. OnDeck, Kapitus, Headway, etc.... In these instances you can access these lenders through a superbroker like Splash Advance (charges 2%) or FundShop (charges half).
Too hard to figure all this out. I worked for a direct funder and deals that were outside our box we sent out. There are direct funders in this industry that do the same thing. Why even bother to ask the questions. With while label stuff that even large lenders use you're going down a rabbit hole. Get the best price and terms on the deal and don't worry about who is doing it And yes there is back door dealing...it's part of the swamp of this industry. Gimme a break...so much of this industry is complete bullsheit anyways....recognize it and move on....LOL.
Steve Benjamin
Professional Business Loans
Irvine, CA 92620
SteveProBiz@gmail.com
https:/probizloans.net/
949-228-1050