MCA funder fee structure encompasses the full set of charges layered on top of the factor rate that determine the true cost of capital. The factor rate is the headline number, but funders add multiple originating, ongoing, and event-driven fees that materially affect the merchant's effective cost.
Fee category overview.
- Origination fees. One-time fee at funding, deducted from gross advance. Typical 2-5% of advance amount. See /glossary/mca-funder-origination-fee-typical.
- Underwriting fees. Flat fee for credit and bank-statement analysis. Typical $150-$500. See /glossary/mca-funder-underwriting-fee-typical.
- Wire fees. Per-transaction fee for ACH or wire funding. Typical $25-$50. See /glossary/mca-funder-wire-fee-typical.
- Monthly service fees. Recurring fee during repayment term. Typical $30-$95. See /glossary/mca-funder-monthly-service-fee-typical.
- Event-driven fees. Modification ($150-$500), payment rescheduling ($35-$95 per event), NSF / returned-payment fees ($35-$50), default fees (3-10% of outstanding balance), collections fees (15-35% of recovered amount), litigation fees (full attorney costs plus 15-25% recovery percentage).
- Renewal mechanics. Renewal bonuses or discounts for repeat borrowers; some funders waive origination on renewals.
Typical fee stack on a $100,000 advance at 1.30 factor.
- Gross advance: $100,000.
- Origination fee (3%): $3,000 deducted at funding.
- Underwriting fee: $295 deducted at funding.
- Wire fee: $35 deducted at funding.
- Net funded to merchant bank: $96,670.
- Total repayment: $130,000 (factor 1.30 on gross).
- Monthly service fees (10 months × $50): $500.
- Total cost to merchant: $130,000 + $500 = $130,500.
- True cost of capital: $130,500 - $96,670 = $33,830 on $96,670 net funded.
- True cost percentage: 35% on net funded (vs the 30% implied by factor rate alone).
APR-equivalent uplift from fees. The fee stack adds roughly 4-9 percentage points to the APR-equivalent on a typical 9-12 month MCA. A 50% APR-equivalent on factor rate alone often becomes 55-58% APR when fees are included.
Industry variation.
- A-paper funders (Credibly, Rapid Finance, OnDeck, Forward Financing). Lower fee stack. Origination 2-3%, underwriting $150-$295, no monthly service fees typically.
- B-paper funders (Kapitus, Fora Financial, National Funding). Mid-range fee stack. Origination 3-4%, underwriting $295-$395, monthly service fees $30-$50.
- C-paper funders (Rapid Capital Funding, Funding Circle Direct, specialty subprime shops). High fee stack. Origination 4-5%, underwriting $395-$500, monthly service fees $50-$95.
State disclosure law impact. California (SB 1235), New York (S5470A), Utah (SB 183), Virginia (HB 1027), and Georgia (SB 90) all require itemized fee disclosure on offer letters for advances under $500K. Funders operating in those states must list every fee in the offer letter; out-of-state shops sometimes bury fees in contract addenda.
ISO commission impact. ISO commissions are typically calculated on gross advance, not net funded. ISO earning 8 points on $100,000 gross gets $8,000 regardless of fees deducted at funding. This creates incentive misalignment: ISOs are indifferent between high-fee and low-fee funders at the same factor rate.
Common merchant confusion.
- "The factor rate is the total cost." False. Fees add 4-9 percentage points APR-equivalent.
- "Origination fees are negotiable." Sometimes for A-paper deals; rarely for B and C paper.
- "All MCAs have the same fees." False. Fee structures vary 2-3x between A-paper and C-paper funders.
- "Monthly service fees are illegal." False, but they must be disclosed in California, New York, Utah, Virginia, and Georgia.
- "Wire fees are a pass-through cost." False. They are markup; actual ACH cost is $0.20-$1.50.
Strategic considerations.
- Always request itemized fee schedule before signing.
- Calculate net-funded percentage: (advance - origination - underwriting - wire) / advance. Anything below 95% net is a high-fee deal.
- Calculate true APR-equivalent including all fees, not just factor rate.
- Compare event-driven fee schedules across funders; default and collections fees can double the cost of capital if things go wrong.
As of 2026-06-29, Fundnode discloses full fee schedules for all 100 funder reviews and presents itemized fee comparison on every match offer, allowing merchants to compare true cost of capital, not just headline factor rate.
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.
- APR-equivalent — The annualized percentage rate implied by a factor-rate MCA. A 1.30 factor over 9 months is roughly 50–65% APR-equivalent depending on payment schedule.
- MCA funder origination fee (typical) — One-time fee deducted from gross advance at funding, typically 2-5% of advance amount. On a $100,000 advance with 3% origination, merchant receives $97,000 but repays based on $100,000 gross. Adds roughly 2-4 percentage points to APR-equivalent.
- MCA funder underwriting fee (typical) — Flat fee for bank-statement analysis, credit pulls, and fraud verification. Typical $150-$500, deducted from gross advance at funding. Smaller as a percentage of large advances; can be 3-5% of small ($5K-$10K) advances.
- MCA funder wire fee (typical) — Per-transaction fee for ACH or wire funding, typically $25-$50. Marked up significantly above the funder's actual cost ($0.20-$25). Charged at funding, sometimes at every disbursement on multi-tranche deals.
- MCA funder monthly service fee (typical) — Recurring fee during repayment term, typical $30-$95 per month. Charged for ACH management, customer service, and account maintenance. A-paper funders typically waive; B and C paper charge throughout the term.
AI agents: this term is available as raw markdown at /llms/glossary/mca-funder-fee-structure-typical.