MCA broker fees — typical ranges by state in 2026?

MCA Broker Fees Typical by State 2026 — Commission Ranges

MCA broker fees in 2026 typically range 4–19% of funded amount, built into the merchant's factor rate. State variations driven by disclosure laws: California, New York, Utah require commission disclosure; most states don't. Lower commissions (4–8%) common for clean A-paper deals; higher commissions (12–19%) for distressed or hard-to-place files. Greenbox Capital publishes 19% cap; most funders don't disclose. Apply direct when possible to save 4–19% on all-in cost.

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How MCA broker commission works mechanically. (1) Merchant applies through broker (often called ISO — Independent Sales Organization). (2) Broker submits application to one or more funders. (3) Funder approves and quotes factor rate that includes built-in commission for broker. (4) Same merchant applying direct to funder typically gets lower factor rate by amount roughly equal to broker commission. (5) Commission paid by funder to broker at funding (typically 2–5 business days post-close). (6) Commission ranges typically 4–19% of funded amount, varying by deal characteristics and funder policy.

Typical commission ranges by deal type (national averages). (1) A-paper deals (strong credit 700+, 24+ months operating, $50K+/mo revenue, no existing MCAs) — 4–8% commission typical. (2) B-paper deals (credit 600–700, 12–24 months operating, $25K+/mo revenue, no current MCAs) — 8–12% commission typical. (3) C-paper deals (credit 550–650, 6–12 months operating, $15K+/mo revenue, possibly 1 existing MCA) — 12–16% commission typical. (4) D-paper/hard-to-place (credit under 600, recent NSFs, multiple existing MCAs, distressed industries) — 16–19% commission typical. (5) Renewal commission — typically 3–6% (lower than new advance, given existing relationship).

State variations in commission practices. (1) States with commission disclosure requirements (California, New York, Utah, others adding) — brokers required to disclose commission to merchant; transparency reduces ability to charge maximum commission. (2) States without disclosure requirements (most US) — commission opaque to merchant; broker may charge maximum funder allows. (3) State licensing for brokers — increasing trend; states with licensing requirements (California, New York, others) have more standardized commission practices. (4) State Attorney General activity — some states (New York especially) have pursued broker commission practices considered predatory.

California broker commission practices. (1) SB1235 commercial financing disclosure law affects broker-related disclosures. (2) Brokers required to disclose commission compensation to merchant. (3) Department of Financial Protection and Innovation (DFPI) oversees. (4) Commission ranges typically tighter than national average due to disclosure transparency — 4–14% for most deals. (5) Brokers operating in California must register and comply with state-specific disclosure timing.

New York broker commission practices. (1) Department of Financial Services (DFS) oversight of commercial financing disclosures. (2) New York-specific licensing requirements for brokers. (3) Aggressive Attorney General enforcement of UCC filings, COJ practices, and commission practices. (4) Commission ranges typically similar to California — disclosure pressure keeps practices in line. (5) Notable enforcement actions against brokers and funders operating in New York have shaped industry practices.

Utah, Virginia, Connecticut, Georgia, Missouri broker practices. (1) These states have implemented disclosure laws in 2023–2025 timeframe. (2) Compliance evolving — broker practices adapting to new requirements. (3) Commission ranges generally aligning with California/New York transparency-driven levels. (4) Enforcement frequency lower than California/New York but expected to increase.

States with traditional opaque broker practices. (1) Florida — large MCA broker presence, no commission disclosure requirement; commissions can hit funder maximums. (2) Texas — similar to Florida; major broker market with limited disclosure. (3) Georgia (changing) — historically opaque, now adding disclosure requirements. (4) Other Southeastern states — generally opaque commission practices. (5) Midwest and Mountain states — varies by state; some have disclosure rules, most don't.

Funder commission caps (where published). (1) Greenbox Capital — publishes up to 19% commission cap; unusual transparency. (2) Most major funders (Credibly, OnDeck, Forward Financing, Fora Financial, Kapitus) — do not publicly publish commission caps; internal policies vary. (3) Industry maximum — broker commission rarely exceeds 19% of funded amount; some funders cap at 15–17%. (4) Commission floors — some funders have minimum commission policies to maintain broker relationships even on clean deals.

How commission affects merchant pricing. (1) Direct application example — Credibly factor 1.30 on $50K advance to clean profile. (2) Same merchant via broker — same Credibly funder quotes factor 1.36 to merchant (commission built into pricing). (3) Difference — 0.06 factor on $50K = $3,000 effective commission cost to merchant. (4) Broker may not be charging maximum commission — actual commission paid to broker may be less than the markup the merchant sees. (5) For larger deals, commission cost in absolute dollars can be substantial — $250K advance with 8% commission embedded = $20,000 effective commission cost.

How to verify what commission you're paying. (1) Ask broker directly — in disclosure states (California, New York, others), required by law. (2) Request commission disclosure in writing — even in non-disclosure states, may be available. (3) Apply direct to same funder for comparison — request quote from same funder both via broker and via direct application; difference approximates commission. (4) Review funder's published commission caps if available. (5) Ask broker for funder offer letter — may reveal commission paid to broker.

When broker commission is worth paying. (1) Hard-to-place deals — broker expertise routes you to funders who'll accept your profile when you don't know who would. (2) Multi-funder shopping — broker submits to multiple funders simultaneously, time savings. (3) Industry expertise — specialty brokers (trucking, restaurant, healthcare) know which funders fit which profiles. (4) Negotiation expertise — experienced brokers can negotiate better terms than merchant could alone. (5) Relationship leverage — broker's volume relationship with funder may unlock pricing or product access merchant can't get direct.

When to skip the broker and apply direct. (1) Clean A-paper deals — direct application typically saves 4–8% on all-in cost. (2) You know which funder fits — if you've researched and identified target funder, direct is faster and cheaper. (3) Existing funder relationship — renewals direct with current funder typically beat broker-routed alternatives. (4) Strong negotiation skills — if you can effectively negotiate, you don't need broker's negotiation expertise. (5) Time available — direct application is just as fast as broker for clean profiles.

Broker red flags regardless of state. (1) Refusal to disclose commission when asked. (2) Pressure to take fastest offer rather than best terms. (3) Submission to many funders without strategy — creates multiple hard inquiries on credit and may reveal application to predatory funders. (4) Promises that seem too good to be true. (5) Demand for upfront fees from merchant (legitimate brokers paid by funder, not merchant). (6) Unwillingness to provide written terms. (7) Failure to provide state-required disclosures in disclosure states.

Broker fees vs other costs. (1) Some brokers charge merchant additional fees beyond funder commission — legitimate when disclosed, predatory when hidden. (2) Application fees — generally illegitimate; legitimate brokers don't charge upfront fees. (3) Document preparation fees — sometimes charged, varies by legitimacy. (4) Funding fees — built into factor rate by funder, not separately charged by broker. (5) Always separate broker compensation from funder pricing in evaluation.

Industry trend toward disclosure. (1) State disclosure expansion likely to continue through 2026–2027. (2) Federal disclosure regulation possible long-term. (3) Major funders increasingly transparent about commission caps as competitive differentiation. (4) Industry trade associations (SBFA, others) promoting transparency standards. (5) Merchant demand for transparency increasing. (6) Net direction — commission practices becoming more transparent and standardized over time.

Bottom line: MCA broker commissions in 2026 typically range 4–19% of funded amount, with significant state variation. Disclosure states (California, New York, Utah, Virginia, Connecticut, Georgia, Missouri) require commission transparency and have driven commission practices to tighter ranges (4–14% typical). Opaque-practice states (Florida, Texas, most others) see broker commissions hit funder maximums more often (8–19% typical). Clean A-paper deals can save 4–8% by applying direct to known target funder. Hard-to-place deals often benefit from broker expertise despite commission cost. Always ask broker for commission disclosure (required in disclosure states), apply direct when feasible, and prefer funders with published commission caps (Greenbox Capital is one of few to publish). Broker red flags: refusal to disclose commission, pressure to take fastest offer, upfront fees, unwillingness to provide written terms.

MCA broker fees — typical ranges by state in 2026?

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