A funder recovering commission already paid, typically when a merchant defaults early in the term.
Terms vary widely — some agreements claw back on default within a set number of days, others not at all. It changes the economics of a shop meaningfully, because commission on a deal that defaults in month one may not be commission at all.
Points
The broker or ISO commission on a funded advance, expressed as a percentage of the funded amount.
Default
A merchant’s failure to meet the terms of the advance agreement, most commonly repeated missed or returned remittances.
Broker agreement
The contract between a broker or ISO and a funder governing submissions, commission and conduct.
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