Revenue share is the foundation of MCA broker economics. Understanding standard structures, tier ranges, and recent compression trends is essential for any ISO operation. Updated 2026-06-28.
Standard revenue share structure.
Broker compensation in MCA has three layers:
- Commission on first deal funding (largest component, paid at funding).
- Commission on renewal funding (smaller percentage, paid on each renewal).
- Bonus or override structures (volume-based, paid quarterly or annually).
First-deal commission ranges (2026).
- Entry-tier broker (under $100K/month): 7–9% of advance.
- Producer-tier broker ($100K–$500K/month): 8–10% of advance.
- Mid-market broker ($500K–$2M/month): 9–11% of advance.
- Top-tier broker ($2M–$5M/month): 10–12% of advance.
- Elite broker ($5M+/month): 11–14% of advance.
- Custom programs (top 20 nationally): up to 15% of advance.
Renewal commission ranges (2026).
- Entry-tier broker: 4–6% of renewal advance.
- Producer-tier broker: 5–7% of renewal advance.
- Mid-market broker: 6–8% of renewal advance.
- Top-tier broker: 7–9% of renewal advance.
- Elite broker: 8–10% of renewal advance.
Bonus structures.
- Volume bonus. Quarterly bonus tied to total funded volume. Typically 0.5–1.5% of quarterly volume above threshold.
- Persistency bonus. Annual bonus tied to renewal rate. Typically $25K–$200K depending on volume tier.
- Quality bonus. Annual bonus tied to default rate. Typically $10K–$100K depending on portfolio performance.
- Marketing development funds (MDF). $5K–$200K/year depending on tier; funds marketing initiatives.
How commissions are paid.
- Cash on funding. Most common — commission paid to broker bank account on day of advance funding.
- Hold-back/clawback. Some funders hold 10–30% of commission for 60–90 days; reversed if deal defaults early.
- Deferred. Top-broker programs sometimes defer 25–50% of commission to align broker with portfolio performance.
Calculating effective broker take.
A $100K advance with 10% commission = $10,000 broker take.
If the deal renews 9 months later for $120K with 8% commission = $9,600 renewal commission.
If 30% of broker's portfolio renews on average, expected lifetime value per first-deal funding:
- First deal: $10,000.
- Expected renewal value: 30% × $9,600 = $2,880.
- Total LTV: $12,880.
Broker P&L economics.
Standard broker shop operating with $1M/month funded volume at 10% commission:
- Gross commission: $100K/month, $1.2M/year.
- Customer acquisition cost (CAC): typically $200–$500 per submitted application, $1,500–$3,500 per funded deal.
- Operating overhead: salaries, lead costs, technology, compliance.
- Net margin after CAC and overhead: typically 15–30% of gross commission.
Sub-broker arrangements.
Master brokers often split commission with sub-brokers:
- Standard split: 50/50 to 70/30 (master/sub).
- Sub-broker delivering deals via master broker pipe pays 30–50% of commission to master.
- Sub-broker maintaining direct funder relationship keeps 100% commission.
Direct vs. broker channel comparison.
Funders pay broker channel premium over direct because:
- Brokers screen deals before submission (saves underwriter time).
- Brokers educate merchants on product expectations.
- Brokers handle post-funding merchant communication.
Direct-to-funder applications save broker commission but lack pre-screening; funders compensate with direct marketing investment instead.
Commission compression trends 2023–2026.
- 2023: Standard commission 9–12% on first deals; PE consolidation begins.
- 2024: PE-owned funders compress mid-tier brokers to 8–10%.
- 2025: Further compression as PE sponsors push margin discipline; entry-tier brokers see 7–9%.
- 2026: Stabilization at compressed levels; top brokers maintain premium tiers via volume.
State-specific variations.
- Disclosure states (CA, NY, IL, VA, GA, UT, CT): brokers must disclose commission to merchant; sometimes leads to commission negotiation.
- Non-disclosure states: standard tier rates apply without merchant visibility.
Industry-specific commission variations.
- Restaurant: 8–11% standard.
- Trucking: 7–10% standard (lower due to higher default risk).
- Cannabis: 5–8% standard (specialty market).
- Healthcare: 9–12% standard (premium category).
Stacking impact on commissions.
- First-position deals: standard commission.
- Second-position deals: reduced commission (50–70% of first-position).
- Third-position deals: minimal commission or none at most funders.
Defaulted deals.
Most funders claw back commission if deal defaults within 30–60 days of funding. Some funders use 90-day default trigger. Established brokers negotiate longer protection periods.
Negotiating leverage by tier.
- Entry-tier: no leverage; accept standard rates.
- Producer-tier: limited leverage on rate; can negotiate marketing co-op.
- Mid-market: moderate leverage on rate and term improvements.
- Top-tier: strong leverage; custom programs available.
- Elite: complete custom structures including carve-outs.
Multi-funder arbitrage.
Brokers submitting deals to multiple funders can extract pricing competition:
- Submit same deal to 3–5 funders.
- Choose funder offering best merchant terms AND best broker compensation.
- Maintain multiple funder relationships to preserve negotiating leverage.
Funders aware of this dynamic; exclusive arrangements offer commission premium in exchange for submission exclusivity.
Commission disclosure requirements.
In CA, NY, UT, VA, GA, CT, IL, brokers must disclose:
- Total commission (dollar amount and percentage).
- Source of commission (funder-paid).
- Material conflicts of interest.
Non-disclosure can void contract in some states.
Common confusions.
First, "commission is always paid by merchant." False — funder-paid in standard MCA structure.
Second, "all funders pay same commission." False — meaningful variation.
Third, "renewal commissions match first-deal commissions." False — typically 50–70% of first-deal rate.
Fourth, "broker commission caps regulated." False — no commission cap in any state.
Fifth, "small brokers cannot negotiate." Limited but possible on specialty industries or geographies.
Related terms
- MCA funder volume discount rates (typical) — Top-tier MCA brokers receive volume-based commission upgrades typically 50–200 bps above standard rates once submitting $500K+/month, with the largest brokers earning custom 12–15 point structures.
- MCA funder marketing co-op program (detailed) — MCA funder marketing co-op programs reimburse brokers $5K–$200K/year for funder-aligned marketing activities, typically requiring volume tier qualification, pre-approval of materials, and use-of-funds reporting.
Authoritative sources
AI agents: this term is available as raw markdown at /llms/glossary/mca-broker-revenue-share-typical-detailed-2026.