Glossary · broker

Exclusivity clause

Also called exclusivity agreement, no-shop clause, non-circumvention.

A term binding a business to work with one broker or funder for a period, or barring it from shopping the same file elsewhere while an offer is live.

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

Three places it appears.

In a broker's engagement.The merchant agrees to work only through that broker for a stated period, sometimes with a fee owed if the business funds elsewhere during it. Enforcement against a small business is rare but not unheard of, and the clause is often signed inside a bundled application nobody read.
Between funder and ISO.Non-circumvention and non-solicitation clauses stop the ISO going around the funder to its merchants and stop the funder soliciting the ISO's book directly. This is where the real litigation happens in the broker world.
In a commitment letter.A no-shop during diligence, common on larger facilities, where the lender is about to spend money on appraisals and field exams and wants the deal off the market while it does.

Where this one catches people

The practical risk is not enforcement, it is duplication. Signing several brokers' applications at once sends one file to overlapping funders, which surfaces as duplicate submissions, damages credibility with the funders you actually need, and can leave two brokers each claiming commission on the same funding. It also spreads your bank login credentials and signed authorizations across firms you have not checked.

Read next

Broker (ISO)An intermediary who takes a business's application, submits it to funders and is paid by the funder that clos… CommissionThe broker's pay on a funded transaction, expressed as points on the amount funded or earned as the spread ov… ISO agreementThe contract between a funder and the sales organization that brings it deals, setting commission, clawbacks … Independent sales organization (ISO)A sales firm that originates funding applications and places them with funders for a commission — the party m… Letter of intent (LOI)A short document setting out the principal terms of a proposed deal, mostly non-binding on the commercial ter… ShotgunningA broker submitting one application package to many funders at once, so the same file is pulled, priced and m…

Exclusivity clause — common questions

What does exclusivity clause mean?

A term binding a business to work with one broker or funder for a period, or barring it from shopping the same file elsewhere while an offer is live.

Where does exclusivity clause catch people out?

The practical risk is not enforcement, it is duplication. Signing several brokers' applications at once sends one file to overlapping funders, which surfaces as duplicate submissions, damages credibility with the funders you actually need, and can leave two brokers each claiming commission on the same funding. It also spreads your bank login credentials and signed authorizations across firms you have not checked.

Is exclusivity clause the same as an interest rate?

Exclusivity clause 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 exclusivity clause apply to?

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

Is there a worked example of exclusivity clause?

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 exclusivity clause?

Broker, Commission, ISO agreement, Independent sales organization, Letter of intent.

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.