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Johny Fernandez: Being in the business,
any business, there's always a risk for

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a lawsuit. So let's talk a little a
little bit about that when you know, you

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are a broker and you have your own
business here in the industry, the risk

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of being sued. What does that look like?
What exactly is the risk when you jump

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into the business?

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Sean Murray: Yeah, that's a really good
question. So this kind of feeds into

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being an independent, you know, sales
office independent operator is that you

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may operate under the impression that
you're now removed from the liability if

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something goes wrong. Yeah, if the
merchant has some sort of problem with

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the funder, the lender, you're like,
well, that's between you, I would just

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the broker, I'm independent. And I mean,
my hands are clean in this deal. Don't

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blame me. But that's not always how it
works out.  Sometimes when disputes

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arise between the merchant and the
funding source, the broker unwittingly

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could be could be viewed as liable. And
that might be because the merchant

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doesn't know that they're not the same,
you know what I mean? They may they

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think it's all one in the same. Yeah,
you know, I talked to this person, they

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referred me to here. And it didn't go
the way I thought and so I'm mad at all

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of you. And so if it results in some
type of legal dispute, maybe maybe there

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is a lawsuit. Yeah, they just name
everybody. Yeah, as like co-defendants,

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right. And here, you were this
independent broker, minding your own

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business, you know, you weren't the
lender, you weren't the funder, all of a

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sudden, you're a co-defendant in a
lawsuit. This is not actually not that

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uncommon. Yeah, it's, it's a real risk
that people need to be mindful of, if

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they get into this industry.

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Johny Fernandez: So let me ask you this
financially, if you have to go through

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something like this, and let's say, you
know, you don't have the money to pay

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for this. What have you seen other
people do to kind of figure out and go

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about a lawsuit? But what have you seen
personally, you know, working with all

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these different guys, like, how do you
handle this?

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Sean Murray: So, you know, I've said
this before, and I don't think... it's

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hard to take it seriously, until it
happens. Because you know, what, what do

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you do if you're being sued, and you're
a broker, and you don't have the

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resources to defend yourself? I don't
really know what you do. You really need

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to go into the industry itself. This is
commercial finance, I don't care what

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anyone told you about. This is a work
from home job, or it's easy, you know,

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you can make a million dollars, it's
just sales, just phone sales, or

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whatever. This is the world of
commercial finance, like period, and

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it's a complicated and somewhat
institutionalized world. And when things

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go wrong, well, it's you're going to be
playing, you know, with the big boys and

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and how that that dispute gets resolved.
Yeah, a lot of times, it's going to be

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through the court system, you're going
to be named the CO defendant, and you're

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going to be expected to defend yourself.
Do not expect the fonder of the lender

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to pay your legal bills. And guess what,
you can't just ignore these things and

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be like, I'm just not gonna respond and
hope hope it goes away, it really

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doesn't work like that. You're going to
have to pay for a lawyer to defend you.

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Even if you did nothing. Anyone can file
a lawsuit against you. Even even if it's

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not true, they just have to believe that
it is true. And had an accurately state

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their claim against you. And you can do
like it's total. You know, it's total

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nonsense. It's false that now What
happened? Well, that's for your own

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lawyer. Yeah. To handle for you, right.
And this is something that's going to

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come up whether you're a very small
operator, it could be a one man show

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working from home, and all of a sudden
you get sued. This was a real risk that

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you need to consider. It could happen.
Yeah. And I think when you're a really

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good salesperson, you like to think that
everything is within your control, that

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if I just call them yeah, you know, they
won't do this, right? Or let me just

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give them a call. This can all be fixed,
right? And I think that even if you're a

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super confident in your abilities, yeah,
you may be somewhat helpless to actually

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resolve their dispute. If the underlying
dispute is with the lender, the funder,

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and only they can only they can truly
fix it, all you can do is talk to them,

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right? And you could just get lumped
into it. And this is the real risk to

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consider. And I've seen it happen. A lot
of times, I've seen it happen to big

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shops, medium sized shops. I've seen it
happen to way too many small companies,

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one man shows, who ended up getting sued
for one reason or another, because they

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didn't realize the stakes that this is
the commercial finance industry. And

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even though it may seem like you just
need a phone an email to get started,

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and you know, the funders and the
lenders are the ones with all the

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liability. No, you're like us, you're
presumed to be a sophisticated party

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too. So this is something you really
need to be thinking about.

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Johny Fernandez: I think I think what
comes to mind, it's like you want to

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play with the big boys and the big boys
come calling you have to be prepared to

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defend yourself.

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Sean Murray: Yeah, that's exactly right.
This is a this is an industry where, you

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know, there's a lot

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Johny Fernandez: Of great money, you can
make great money. But also,

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Sean Murray: Yeah, exactly. It's gonna
cost you, you know, if you want to if

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you want to make big money, then you're
you're playing a table where everyone

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has a lot of money. And one of the tools
they have in their arsenal is lawyers.

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Yeah. Right. So if the potential to make
a lot of money is there, and it is you

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can, you can make a million dollars, you
know, I don't know if we can make a

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million dollars per year, but you can
certainly make a million dollars and

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small business finance world. And guess
what? There's so much money flowing

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around that. So many people have
lawyers, they don't think anything of it

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at all. It's just a normal part of
business.

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Johny Fernandez: It is.

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Sean Murray: And then here you are, you
know, it's essentially a one man show or

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a very small shop that game. Well, you
know, that that? Hopefully, I won't need

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that you will, you won't need that. And

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Johny Fernandez: I think it's what you
just said, right? They're having a

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lawyer and being ready to sue, it's a
normal part of business, just any

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business, any business owner, you know,
corporations, etc. They're ready

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legally, and they have the legal
department ready to go guns blazing, if

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you need to. Yeah, and kind of like what
you said, if you are a one man show, and

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you think you're on top of the world.
And some and you do something wrong, or

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you encounter a situation where you are
going to get sued, and you're, you know,

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subpoenaed to show up to court, etc,
etc. You have to prepare.

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Sean Murray: Yeah. And it's, it may be
hard in the beginning to imagine having

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to set aside money for future legal
expenses, because it's already hard

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enough to run a you know, an ISO and ISO
broker company as it is. But you really

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do need to have it and too many people
out there say, Oh, I have a friend who's

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a lawyer, everyone.

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Johny Fernandez: Everyone has friend...

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Sean Murray: Everyone has a friend who's
a lawyer. So that's why I'm bringing it

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up. Because everyone's like, oh, man, I
got a friend who's a lawyer. Yeah.

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Unfortunately, that lawyer may not
always be exactly what you're going to

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need. Like there might be a lawyer who
does real estate deals. They're not

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someone who goes and like defends people
in court. There's all different types of

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lawyers. Yeah. So the lawyer you're
friends with might not be the type of

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lawyer you would need, if someone is
threatening to sue you, or actually

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suing you. And then when you go and you
say, Hey, can you help me out? You might

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find that that person tells you, No, I
can't. I can help you with your

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contract. I can answer a couple of
questions for you. I can notarize

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something for you. But I can't defend
you in a lawsuit. That's not the type of

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law that I do. Or I can't go up against
this type of commercial litigator, it's

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not going to work out for you. So you
got to have more than just my friend is

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a lawyer type of arragement.

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Johny Fernandez: I think it's like what
you just said, a lot of people they

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think that because their friend is a
lawyer, they can back them up. But I

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think something people forget is that
there's different types of law, you

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know, entertainment, law, real estate,
law, family, Marriage and Family Law.

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You know, just regular criminal justice
law, contracts. You know, you have

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entertainment law, so, yeah, but there's
these different areas that they just

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can't crossover.  It's like the medical
field, like, you're not going to get a

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gastroenterologist to do a family
practice visit. Like, they just don't

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intervine. Yeah, I feel like that's the
perception. When people say, I have a

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family friend, that's a lawyer, and they
don't practice the law that we need.

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They can't do anything.

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Sean Murray: Yeah. You know, now that
we're talking about it, this has come up

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before, this is the risk that should be
disclosed to anybody there. There are a

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lot of small companies out there that
they go out, and they raise money from

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family and friends to start their
companies up. And I think oftentimes,

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the presentation that's given to them
about, you know, the risks and the

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rewards, it's how much return can you
make? And what are the defaults? Like?

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Yeah, and they, they everything is based
off that. Yeah. And the legal side just

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gets pushed back, push back.  They might
say, well, like, hey, certain courts

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have deemed these products to be legal
mistakes or whatever. But I don't think

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that they I don't think it's adequately
present presented. That litigation tends

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to be a major part of the business. And
litigation is extremely expensive.

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Right.

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Johny Fernandez: Well, litigation
literally closed down your business.

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Because a fee, like, it's expensive

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Sean Murray: Yeah, these are things that
can cost 10s of 1000s of dollars, right,

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depending on you know, whatever the
nature of it is. And you need to decide

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from the onset with whoever you're
raising money from, who's going to be

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paying for those costs? And did you tell
them in advance that this is the true

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risk that I did have? Someone asked me a
few years ago.You know, you know what I

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mean? What am I missing? Here are the
returns is the cost, raising a bunch of

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money, what am I missing? And I was
looking at what they sent me just like a

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random email. Yeah. And I was I was
like, Well, what about all the legal

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These you don't I mean, like, what
happens if someone what happens if these

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merchants sue? Who Who pays for that,
like, well, how often does that happen?

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And I was like it happens all the time!
Happens all the time.  And you really

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need to build that into your model.