process
ISO / Broker
An ISO (Independent Sales Organization) or broker is a third party that markets funding products and earns a commission on funded deals.
Definition
What it means.
ISOs do not fund loans themselves, they source borrowers for direct funders in exchange for a commission, typically 5–15% of the funded amount. The commission is usually baked into the offer, which means a broker-sourced deal is often priced higher than an identical direct-to-source deal.
Not all brokers are bad, but the incentive structure rewards placing you into the highest-commission product, not the lowest-cost one. Always ask who is actually funding the loan, whether there is a broker commission, and whether that commission is coming out of your proceeds or paid separately by the funder.
Example
A business applies through an ISO that submits the file to several funders simultaneously. Each funder that bids adds its offer price, and the ISO earns a commission from whichever funder the borrower accepts.
Now what?
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