An ISO — independent sales organisation — sources merchants and places their files with funders, earning points on what funds rather than deploying its own capital. In practice ISO and broker are used interchangeably, though ISO often implies a larger operation with direct funder agreements and sub-brokers underneath it. ISOs and brokers originate an estimated 70 to 80 percent of all MCA volume.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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