Glossary · operations

Portfolio

Also called book, funded book.

The set of live deals a funder, ISO or investor holds, and the aggregate performance data on it that drives what the credit box looks like this month.

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

A funder manages exposure at the book level, not deal by deal. That means concentration limits by industry, by state, by position, by deal size and by broker. It means monitoring default and early-default rates against underwriting vintage. And it means adjusting the credit box when a cohort underperforms.

For brokers, portfolio performance is measured per source. Funders track default rates by ISO, and a broker whose submissions default above the book average finds pricing worsening, approvals tightening and commissions cut - often before anyone says so directly.

Portfolios also trade. Books are sold, servicing is transferred, and deals are participated out. A merchant can find itself dealing with a servicer it never contracted with, on terms that have not changed.

Where this one catches people

Declines are frequently about the funder's book rather than your file. A funder that has just taken losses in your industry, is over-concentrated in your state, or is close to a facility covenant will decline a file it would have funded a month earlier - and the reason given will describe your business, not its balance sheet. Two declines are not a verdict.

Read next

ISO agreementThe contract between a funder and the sales organization that brings it deals, setting commission, clawbacks … Paper gradeThe informal tiering funders and brokers use to sort files by quality, from bank-eligible A paper down throug… ParticipationAn arrangement in which one funder sells part of a transaction's economics and risk to others while continuin… Qualification criteriaThe published floors a funder applies before a file is properly reviewed - time in business, monthly revenue,… Restricted industryBusiness types a funder will not fund at all, maintained as an internal list keyed to industry codes and driv… Risk-based pricingSetting the price of an offer from the assessed risk of the specific file - credit, operating history, deposi…

Portfolio — common questions

What does portfolio mean?

The set of live deals a funder, ISO or investor holds, and the aggregate performance data on it that drives what the credit box looks like this month.

Where does portfolio catch people out?

Declines are frequently about the funder's book rather than your file. A funder that has just taken losses in your industry, is over-concentrated in your state, or is close to a facility covenant will decline a file it would have funded a month earlier - and the reason given will describe your business, not its balance sheet. Two declines are not a verdict.

Is portfolio the same as an interest rate?

Portfolio 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 portfolio apply to?

It is not specific to one product — it appears across the market.

Is there a worked example of portfolio?

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 portfolio?

ISO agreement, Paper grade, Participation, Qualification criteria, Restricted industry.

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.