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ISO Loans - How RFC's loan work
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Are you an ISO/MSP looking for
funding because you have an opportunity to:
• Buy a portfolio at a advantageous discount?
• Buy out a partner?
• Open a profitable new sales office but lack the capital for the
"upfront" costs?
• Hire some new sales reps to but lack
the capital to attract them?
• Increase efficiency by buying new computer equipment?
• Open a call center but lack the capital to do so?
Often, opportunities
such as these, which can enable manyfold increases in business, present
themselves to ISO's. However, equally as often ISOs can't take
advantage of the opportunities because they can not obtain loans from
traditional lending sources such as banks.
RFC was formed to fill this need. RFC provides financing
based on ISO Residuals.
For example: Say your
Residuals amount to $40,000 per month.
RFC typically can lend about 8x these monthly Residuals or
$320,000.
The loan is repaid
directly from your Residuals by your Processor.
Once the loan is repaid, the
full Residuals revert back to you. You benefit from the increased business
AND
You do NOT have to
sell off your Residuals! You still OWN them!
Diagram of RFC
Residual-based working capital loan:
Prior to the RFC
loan, residuals are sent to you, usually via ACH, monthly from
your Processor directly to your bank account (shown by arrow
B). In return for the loan from RFC, you execute a Note and
Assignment (shown at A) of your ISO/Processor contract to RFC
and authorize the Processor, only for the term of the
loan to pay to RFC’s bank account via ACH only RFC's debt
service amount from your residuals
(shown as arrow C). The balance of the monthly Residual
continues to be paid normally to you.
Once the loan is
repaid, the full monthly Residual amount is diverted back
to the you. Thereafter, you again receive
ALL your residuals. You have not had to sell off any
merchants.
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