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Johny Fernandez: What is an ISO or ISO?

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Sean Murray: Yeah, that's a great
question. And ISO, or ISO stands for

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independent sales organization, it the
term that comes from the payments

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industry. And that's because the
payments industry is very decentralized.

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And that if you sign up to accept credit
cards, you are typically not working

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with the actual bank that's going to
process it, you're working with a

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middleman, who's going to set you up and
kind of be your customer service in some

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way shape, or form and is going to sell
you the equipment that you need to use.

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And that's where the term independent
sales organization came from. Because

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they were an independent office, they
weren't, they weren't actually the

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processor at the end. Yeah. And that
could be good because they could, they

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could set you up with a processor that
would give you the best rates and terms

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for the type of business that you had,
like, if you were selling like tickets

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on the internet, versus if you were
selling food at a cafe, you're going to

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need to use the right credit card
processor for the risk that you do. So

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that's where the that's where the term
comes from. Okay, it got carried over

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into the small business finance world.
So now you hear ISO and ISO all the time

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in small business finance, and you
probably also hear the word Broker.

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They're the exact same, okay, ISO, ISO
broker, all the exact same thing.

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There's no difference. The reason we
hear ISO and ISO a lot is because those

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folks came from the payments era of
small business finance, they came from

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the old fashioned MCA world, and it is
carried that term for it. The new

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generation, when they got into the
business, they're like, well, if I'm

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going to work with independent people
and companies that are going to refer

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these customers to me, well, I'm just
gonna call them a broker. Right? Because

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we have brokers in real estate, and
mortgages and, and stocks, right? Yeah,

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so it's a pretty natural term to use
broker. And so the term broker kind of

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became part of the common, you know,
lexicon or whatever. And so if you're

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out there wondering, what's the
difference between ISO, ISO and broker,

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there's no difference at all. And

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Johny Fernandez: So to clarify, if you
see the word ISO, if you see the word

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broker, they mean the same?

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Sean Murray: They mean the same.

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Johny Fernandez: And they're using
sentences, but it pretty much it's the

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same thing. It's the exact same thing.
And I have long changed over I started

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under the ISO/ISO, I call it ISO, ISO
ISO terminology. That was the

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terminology I, you know, I grew up with
in the industry, and then, you know,

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broker just makes a lot more sense.
Yeah. You know, what, what is a broker?

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Maybe it's good to just point out what a
broker is, the broker is essentially a

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middleman. Yeah, the broker is
independent, like the independent sales,

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organization, terminology still applies,
because a broker is independent. And I

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think it's important to know that
because the broker, although they may

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seem like they are representing the
funding source of a lending source,

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they're actually representing
themselves. And they're just referring

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the customer to the lender or the
funder, they're an actual independent

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entity. And this kind of distinction can
get lost with the customer, because they

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might think it's all one in the same,
because a broker may or may not charge

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their own fee, to the end user to the to
the to the merchant, that's borrowing

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money, or, you know, engaging in in MCA
transaction. So, it's a good question to

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ask for the customer is, are you a
broker? You know, are you the the actual

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funding source? It makes a difference.
And part of that is because brokers

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typically work on commission. Yeah, like
any other industry. And so that can add

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to the cost of the product. Okay. And so
that's, that's like one, that's one

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thing to like, really keep in mind,
although working direct, doesn't always

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mean that it's cheaper than working with
the broker. Because if you're working

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directly with a lender or funder, that
lender of funder is only going to have

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their terms and products to offer. Yeah,
right. Or the broker could say, that's

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great. But I know another lender of
funder who can do it cheaper. Yeah. And

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even when you add my commission on, it's
still a better deal for the customer,

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right? So there are pros and cons to all
of that. Also, lenders and funders

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typically need their own sales people,
okay. You can't just call an underwriter

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and say, give me a loan, right? You need
to actually talk to one of those sales

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representatives, typically, if you're
going to get funded by that company,

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sales agents who represent lenders and
funders often typically get paid a

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commission. So even if you're working
direct with the funder, the lender, it

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doesn't mean that it's going to be
cheaper than working with the broker,

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because you got to assume the sales
person working for the lender or the

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funder also needs to get paid. So
sometimes, sometimes they'll get paid a

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commission that's equal to what the
broker would get. And so the cost

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difference between the two, and I'm just
talking about broadly, this isn't always

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the case. But the cost difference
between going to the broker and working

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with directly the funder, they could
actually be exactly the same, because

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some salesperson needs to get paid at
the end of the day for bringing the deal

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to them. But if you're out there
wondering if you're always wondering

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what is it what is an ISO, what is an
ISO and how does that compare to a

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broker? It's all the same