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Broker agreement ISO agreement
Also called ISO agreement, referral agreement, partner agreement.
The contract between a funder and a broker setting commission, exclusivity, clawback and conduct terms, to which the merchant is not a party but which shapes what the merchant is offered.
Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.
What it means
The agreement covers commission points and how they are calculated, whether the broker may mark up the funder's buy rate and by how much, payment timing, protection of submitted merchants for a period, clawback on early default or early payoff, and confidentiality of the funder's pricing.
It also sets conduct rules that matter to merchants indirectly: whether the broker may submit the same file to other funders during an exclusivity window, whether it may arrange additional positions on a merchant the funder has already funded, what it may represent about approvals and rates, and who owns the merchant relationship at renewal. Renewal ownership is the most valuable clause in the document and the one most often fought over.
Funders use the agreement to police the market. Brokers who stack funded merchants, submit altered documents, or misrepresent terms are cut off, and the industry moves this information around quickly.
A merchant may sign a separate broker fee agreement, which is a different document, and that one they are a party to. It should state the fee, when it is earned and whether it is refundable if funding does not occur.
Where this one catches people
Merchant protection clauses cut both ways. If a broker submits your file to a funder, that funder may treat you as the broker's merchant for months, meaning you cannot easily approach it directly or through another broker for a better price. A single careless submission can lock you out of the cheapest source on your own file.
Where you will meet this term
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Broker agreement — common questions
What does broker agreement mean?
The contract between a funder and a broker setting commission, exclusivity, clawback and conduct terms, to which the merchant is not a party but which shapes what the merchant is offered.
Where does broker agreement catch people out?
Merchant protection clauses cut both ways. If a broker submits your file to a funder, that funder may treat you as the broker's merchant for months, meaning you cannot easily approach it directly or through another broker for a better price. A single careless submission can lock you out of the cheapest source on your own file.
Is broker agreement the same as an interest rate?
Broker agreement is defined above; if you are comparing it against a rate, check whether the two measures share a time dimension before you put them side by side.
Which products does broker agreement apply to?
Merchant Cash Advance, Working Capital, Business Line of Credit, Equipment Financing.
Is there a worked example of broker agreement?
Not on this entry. Where a term is arithmetic, the arithmetic is shown; this one is not primarily a calculation.
What else should I read alongside broker agreement?
Backend fee, Broker, Buy rate, Clawback, Commission.
Has this definition been checked?
Not yet. This entry is drafted and live, and the notice at the top says so. Confirm anything you are about to act on.
Is this legal advice?
No. It is a definition. What a clause does in your contract, in your state, is a question for a lawyer licensed where you are.
Can I suggest a term?
Yes — [email protected]. The glossary grows from what people are actually shown in contracts.