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The terminology in this industry is loose enough to cause real confusion on a first call, so it is worth pinning down who does what.
| Role | Provides capital? | Earns | Carries the risk? |
|---|---|---|---|
| Funder | Yes | The spread on the advance | Yes |
| ISO | No | Points on funded volume | No |
| Broker | No | Points, often via an ISO | No |
| Sub-broker | No | A split of the broker’s points | No |
The line between ISO and broker is more about scale than function. An ISO typically holds direct agreements with several funders, may have sub-brokers submitting through it, and takes on some file preparation. A broker may work through an ISO rather than direct. Both find merchants and neither funds anything.
How the money moves
- The merchant applies, through a lead, a referral or outbound.
- The broker or ISO packages the file — application, bank statements, supporting documents.
- It goes to one or more funders, who underwrite and make offers.
- The merchant accepts, the funder deploys capital, and the commission is paid on the funded amount.
- If a sub-broker sourced it, the points are split.
Nobody in that chain earns anything until money moves. That is the single most important fact about the channel and it explains most of its behaviour — including why speed to lead matters so much and why a file that stalls is worse than one that declines quickly.
Why the channel is the industry
ISOs and brokers originate an estimated 70 to 80 percent of MCA volume nationally. Direct-to-merchant platforms keep growing and the channel keeps holding, because the product needs judgement that software has not replaced — reading a bank statement, structuring around an existing position, knowing which funder takes which file.
What an ISO actually does day to day
- Acquisition — leads, referrals, renewals and outbound, which is where most of the cost sits.
- Qualification — establishing revenue, time in business, existing positions and what the money is for.
- Packaging — assembling a file a funder can underwrite without going back and forth.
- Placement — knowing which funder wants which paper, which is the part that separates shops.
- Renewal management — the most profitable deals in the book, and the most commonly neglected.
The first item is where the money goes and the last is where it is left on the table. Most shops spend heavily on acquisition and run renewals informally, which is backwards on the arithmetic.
Questions brokers ask
What is an ISO broker?
An ISO — independent sales organisation — is the broker-side distribution channel in merchant cash advance. The ISO sources the merchant, packages the file and submits it to funders, and is paid points on what funds rather than a salary. Most of the market uses ISO and broker interchangeably.
What does ISO stand for in merchant cash advance?
Independent sales organisation. An ISO sources merchants and places their files with funders, earning points on what funds without deploying its own capital or carrying the risk of the advance.
What is the difference between an ISO and a broker?
Mostly scale rather than function. An ISO typically holds direct agreements with multiple funders, may have sub-brokers submitting through it and handles file preparation; a broker may work through an ISO rather than direct. Both source merchants, neither funds anything, and the terms are frequently used interchangeably.
How do ISOs get paid?
Points on the funded amount, paid by the funder after the deal funds. Nobody in the chain earns anything until capital moves, which is why a file that stalls is worse for a shop than one that declines quickly.
How much MCA volume goes through ISOs and brokers?
An estimated 70 to 80 percent of all MCA volume nationally. Direct-to-merchant platforms have grown without displacing the channel, because the product still requires judgement — reading statements, structuring around existing positions, and knowing which funder takes which file.
Do ISOs need to be registered?
In a growing number of states, yes. Texas, New York, California, Virginia, Utah, Georgia and Florida have registration requirements attached to their commercial financing regimes, and Texas has a registration deadline of 31 December 2026. Requirements differ by state, so confirm your position for each state you place files in.
Alex Makowski
Founder, Infinite Bookings
Runs the lead generation operation behind Infinite Bookings — paid traffic, the funding application, and the delivery pipeline that puts records into brokers’ CRMs.
Reachable directly at alex@infinitebookings.com or 732-609-7182.