ISO Agreement
ISO agreements govern the relationship between MCA funders and Independent Sales Organizations — defining commission structures, exclusivity terms, deal submission requirements, and operational processes for the broker-funder relationship.
Why This Matters
ISO agreement key terms: commission rates (typically 4-12% of funded amount, varies by funder and ISO production), exclusivity provisions (most ISO relationships non-exclusive), deal submission requirements (documentation standards, qualification criteria), payment terms (commission payment timing), chargeback provisions (commission reversals for early defaults), and territory or industry restrictions. Strong ISO agreements clearly delineate responsibilities, provide commission predictability, and establish dispute resolution. Weak agreements create operational friction and ISO relationship deterioration.
Frequently Asked Questions
Frequently Asked Questions
What's the typical ISO commission rate?
Range 4-12% of funded amount. New ISOs and lower-volume relationships start 4-6%. High-producing ISOs with consistent quality earn 8-12%. Premium ISOs with exclusive relationships sometimes exceed 12%.
Are ISO commissions paid before or after merchant repayment?
Typically paid at funding (not contingent on merchant repayment performance), with chargeback provisions for early defaults. Standard chargeback: full commission reversed for defaults within 30-60 days of funding.