ISO (Independent Sales Organization) commission is paid by MCA funders to brokers who source merchant deals. The merchant typically doesn't see this as a separate line item — it's baked into the factor rate they're quoted.
Typical ISO commission ranges (2026). - A-paper deals (high-quality merchants): 4-8% to ISO. - B-paper deals (mid-tier): 8-12% to ISO. - C-paper deals (sub-prime): 12-19% to ISO. - "Stacking" deals (second position): often 8-15%.
How ISO commission shows up in your factor. - Funder's "wholesale" factor for an A-paper deal: 1.18. - ISO markup of 8%: factor inflated to ~1.27. - Your "quoted" factor: 1.27 (you don't see the 1.18 wholesale). - Cost of going through broker on $50,000: extra $4,500 in fees.
Funders that publish ISO commission caps (rare — most don't). - Greenbox Capital: published ISO commission cap of up to 19%. Notable transparency. - Credibly: doesn't publish ISO commission, but engagement model is consistent. - OnDeck: caps ISO commission lower than industry average. Direct relationships preferred.
How to know if you're being charged ISO commission. 1. You went through a broker — assume yes. 2. You went direct to funder — usually no, but always verify. 3. You can't determine — ask the funder directly: "Is there ISO commission embedded in this factor? If yes, what is it?" Their answer (or refusal to answer) tells you.
Going direct to save the commission. - Apply directly to funder's website, not via a broker. - If you've started with a broker, you can request the funder give you their "direct" factor — some will, some won't. - Direct funding typically saves 4-15% on the all-in cost.
Where brokers ADD value (worth the commission). - Comparison shopping across multiple funders (legitimate marketplaces like Lendio, Fundera). - C-paper merchants who can't qualify direct. - Industry-specific underwriting expertise (e.g., trucking-specialty brokers). - Stacking situations requiring careful structuring (high risk; only if necessary).
Where brokers ADD COST without value. - Single-funder placement (broker shopped one funder; you could have applied direct). - Standard A-paper merchant being marked up to C-paper pricing. - "Renewal" offers from broker (almost always cheaper to renew direct or wait to pay off).
The strategic insight. ISO commission is the #1 hidden cost in MCA pricing. Always verify whether you're being marked up. For deals over $100K, the savings from going direct routinely exceed $10,000.
Related terms
- 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.
- Merchant cash advance (MCA) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan.
AI agents: this term is available as raw markdown at /llms/glossary/iso-commission.