2026 marks the year MCA broker disclosure went from a state-by-state patchwork to a near-universal requirement across the major MCA-volume states. The new generation of rules — extending and tightening the earlier funder-disclosure laws — explicitly target the broker layer, requiring transparency about commissions, fees, and the broker-vs-funder distinction that has historically been the most opaque part of the merchant's experience.
The mechanics — what brokers must now disclose. Common elements across the 2026 broker-disclosure regimes:
- Broker identity and licensing. Legal name of the broker entity, state registration / license number (where applicable), and the broker's relationship to the funder (independent ISO, sub-ISO, white-label partner, etc.).
- Commission amount. Explicit dollar amount and percentage of advance that the broker is receiving from the funder on the deal. No more "the funder pays us, you don't" obfuscation.
- Origination and packaging fees. Any fees charged to the merchant by the broker (separate from funder fees) — application fees, packaging fees, "underwriting consultation" fees, etc.
- Whether the broker is an agent of the merchant or the funder. Explicit statement of fiduciary or non-fiduciary relationship.
- Number of funders shopped. Whether the broker is offering a single funder option or shopped the file across multiple funders, and how many.
- Disclosure delivery timing. Must be delivered to the merchant before contract signing — typically defined as 24-72 hours pre-signing depending on jurisdiction.
- TILA-style format. Standardized "broker disclosure box" mirroring the existing funder-disclosure format.
The mechanics — what each state requires (2026 status).
- California. Existing DFPI commercial financing disclosure regulations extended to brokers via revised regulations effective Q1 2026. Broker commission disclosure mandatory; broker fees capped at 5% of advance.
- New York. S5470-A extension passed late 2025, effective March 2026. Mandates broker disclosure on all commercial financing under $2.5M, with explicit commission display.
- Virginia. HB 1027 amendment extending to brokers; effective 2026.
- Utah. SB 183 broker registration regime continues; new 2026 amendment adds commission disclosure on every deal.
- Georgia. SB 90 amendment effective 2026 adds explicit broker fiduciary disclosure and commission display.
- Florida. Comprehensive new MCA broker law effective 2026-06-28 — broker registration, fee caps, and full TILA-style commission and pricing disclosure.
The math — what's now visible to the merchant. A representative $100K MCA at 1.32 factor brokered through a typical ISO:
- Advance: $100K
- Factor: 1.32
- Total RTR: $132K
- Total cost of capital: $32K
- Broker commission (now disclosed): $12K (12% of advance, paid by funder)
- Effective net cost of capital to merchant: $32K (commission is paid from the funder's gross factor revenue, not added on top)
- Wire to merchant: $97K (after $3K broker origination fee charged to merchant)
- True net effective cost: $35K total cost ($32K factor + $3K fee) on $97K of capital received
The disclosure makes two things visible the merchant historically couldn't see: how much the broker earned (which calibrates the broker's incentives — high commissions imply pressure to close), and the gap between the headline advance and the actual wire-to-merchant after fees.
The strategic insight — what brokers now have to say out loud. Five conversations that were previously evasive are now mandated:
- "How much do you make on this deal?" Previously: "the funder pays me, you don't worry about it." Now: explicit dollar amount on the disclosure form.
- "Are you shopping multiple funders or just this one?" Previously: "we shop everyone." Now: required disclosure of how many funders the file was sent to.
- "Are you an ISO or a sub-ISO?" Previously: ambiguous. Now: required identification of broker's role and the chain of intermediaries.
- "What fees am I paying you separately from the funder?" Previously: appeared as one-off charges in the FRSA. Now: required line-item disclosure on the broker form.
- "Are you my agent or the funder's agent?" Previously: never asked. Now: required fiduciary disclosure.
The strategic insight — what merchants should do with the disclosure. Five high-leverage actions:
- Always demand the disclosure 48 hours before signing. Use the window to compare across brokers or to consult counsel.
- Comparison-shop on broker commission, not just funder factor. A broker taking 15% commission vs a broker taking 8% on the same funder paper is leaving 7 points of negotiating room on the table — often translating to 3-5 points of factor reduction if the merchant pushes.
- Treat broker fees charged separately as 100% negotiable. Origination fees in the $1-3K range are nearly always negotiable to $0 or 50% reduction. If the broker says they're "non-negotiable," shop another broker.
- Use single-funder shopping as a red flag. If the broker shopped only one funder, you're not getting market discipline. Ask why — and ask to see additional offers from other funders.
- Reference the fiduciary disclosure in any later dispute. If the broker disclosed they are the funder's agent (not the merchant's), the merchant's reliance on broker advice has limited weight; if the broker disclosed they are the merchant's agent, the merchant has stronger claims for misrepresentation.
The strategic insight — what the disclosure regime does NOT solve. Multi-state deals can fall through jurisdictional cracks (FL merchant, TX broker, NY funder). Unregistered brokers may skip disclosure entirely. Lead-sale operators selling merchant contacts to downstream brokers may not be covered. Always ask: "Are you the broker on my deal, or are you selling my contact to a broker?"
The honest framing. The 2026 broker disclosure regime is a meaningful shift in the negotiating dynamic between merchants and brokers. The merchant who reads the disclosure, asks the questions it forces, and uses commission data as negotiation leverage consistently lands cleaner deals. Brokers who resist disclosure or downplay its importance are signaling exactly the relationship not to enter into.
Related terms
- ISO / MCA broker — An Independent Sales Organization. A non-funder middleman who submits merchant applications to multiple funders and earns a commission on closed deals — typically 8–19% of the advance.
- 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.
- MCA broker fee (PSF, origination, processing) — The dollar amount the ISO/broker collects on an MCA — usually 5-15% of the advance, taken either off the top from the wire or added as a PSF the merchant repays.
- MCA broker vs direct lender — An MCA direct lender funds advances with their own capital and books the deal on their balance sheet. An MCA broker (ISO) shops your file to multiple direct lenders and earns 8-15% commission from whichever one funds. Going direct can save 8-15% on the factor.
- MCA broker vs ISO — MCA broker = generic term for any commission-paid intermediary. ISO (Independent Sales Organization) = formal contracted broker with funder agreements. All ISOs are brokers; not all brokers are ISOs.
- MCA pricing disclosure law — State laws (CA SB 1235, NY S5470, VA HB 1027, UT SB 183, GA SB 90, FL effective 2026-06-28) requiring MCA funders to disclose APR-equivalent, total cost, payment amount, term, and prepayment policy in TILA-style standardized format before contract signing.
AI agents: this term is available as raw markdown at /llms/glossary/mca-broker-disclosures-2026.