Double-dipping is the single most expensive trap in MCA renewals. Brokers and funders rarely use the term, but it describes a specific mechanic: you have a remaining balance on an existing MCA, the funder pays it off as part of a new larger advance, and the new factor rate is applied to the entire new amount — including the portion that paid off the old balance.
The math. Say you owe $15,000 on an existing MCA and need $20,000 in new working capital. Total need: $35,000. The funder offers a renewal at a 1.30 factor. - $35,000 × 1.30 = $45,500 total repayment. - Of that, $13,500 is fees ($35,000 × 0.30). - But $15,000 of the new advance just paid off the old MCA. You're paying 30% in factor fees on money that was already advanced and already had a factor applied. That $15,000 effectively gets a factor applied twice.
Why it's so common. Brokers earn commission as a percentage of new funded amount. A renewal that rolls the old balance into a new advance generates a larger commission than a "true-up" structure that only charges factor on the truly new money.
The honest alternative — net funding. A reputable funder offering net funding charges the factor only on the new money being advanced. In the example above: - Pay off the $15,000 balance separately (often at a small renewal discount of 5-10%). - Take a fresh $20,000 advance with a 1.30 factor: $26,000 total repayment, $6,000 in fees. - Total fees: $6,000 vs $13,500 — savings of $7,500.
How to spot it before signing. Ask your funder or broker directly: "If I'm rolling over an existing balance, is the new factor rate applied to the gross new amount or just the net new money?" If the answer is "gross" or anything other than a clear "net new money only," you're being double-dipped. Walk away or negotiate net funding.
Funders that explicitly offer net funding on renewals. Credibly's published renewal program, OnDeck's repeat-customer track, Bluevine's LOC top-ups (the LOC structure inherently avoids this). Most broker-placed third-party MCAs do not.
The pragmatic takeaway. If you have an existing MCA balance and need more working capital, the single most valuable question to ask is whether the new advance is structured as net funding or a gross renewal. The answer can shift your total cost by 10-15% of the new advance.
Related terms
- MCA renewal — Refinancing an existing MCA into a larger advance, typically pitched at 50% paid-down. Often masks worse pricing — the new factor is applied to a new principal that includes the old balance.
- Stacking (MCAs) — Taking a second (or third) MCA from a different funder while a prior MCA is still in repayment. Default risk skyrockets; it breaches most original-funder contracts.
- Factor rate — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound.
- ISO commission — Percentage of the advance amount paid by the funder to the broker who sourced the deal. Typically 5–19% in 2026; baked into the factor rate the merchant pays.
AI agents: this term is available as raw markdown at /llms/glossary/double-dipping-mca.