Source Company is the Company that sent the Deal (either as a Lead or Application) to your workspace. A Source Company is the referrer of business to you which could be a Broker/ISO, business contact or an affiliate.
In order for Source Company to appear as a selection in the Deal, the source company must be a Contact in MCA Suite first. Here is a link to the article on how to create a Contact in MCA Suite.
Below is the area where you can associate a Source Company to an Application (Deal in Application stage).
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