An MCA broker is a salesperson or firm that connects business owners seeking working capital with funders who write the actual advance. The broker does not lend money. They source the merchant, package the file (bank statements, application, credit pull), and submit it to one or more funders. When a deal funds, the funder pays the broker a commission baked into the factor rate the merchant sees.
The mechanics. - A merchant submits an application + 4-6 months of bank statements to the broker. - The broker pulls a soft credit inquiry and reviews the file for funder fit (revenue, NSFs, prior advances, industry). - The broker shops the file to 3-12 funders in their network — usually those that pay the highest commission and approve the merchant's paper grade. - Funders return offers within hours: advance amount, factor rate, term, daily debit. - The broker selects 1-3 offers to present to the merchant, often steering toward the deal that pays the highest commission rather than the cheapest factor for the merchant. - The merchant signs the funder's contract directly. The broker is not a party to the contract. - The funder wires the advance (minus origination fees), then sends the broker's commission via separate wire — usually within 48 hours of funding.
The math. - A $100,000 advance at a 1.40 factor returns $140,000 total to the funder. - The broker commission is typically 8-15% of the advance, sometimes called "points." On a $100K deal that's $8,000-$15,000 paid to the broker. - The funder builds the commission into the factor rate. If the merchant went direct, the same deal might price at a 1.32 factor instead of 1.40 — saving the merchant $8,000. - "Wholesale" factor (what the funder would book direct) vs "retail" factor (what the broker quotes the merchant) is the broker's spread.
Who uses brokers and why. - Merchants who don't know which funders to call (most do not). - Merchants with marginal files (NSFs, low revenue, prior defaults) who need someone to shop 8+ funders to find one yes. - Merchants who hate paperwork and want a single point of contact. - Merchants who've been cold-called by an aggressive broker telemarketer (most common path in 2026).
Why funders use brokers. - 70%+ of MCA volume is broker-originated in 2026. Funders prefer paying 10% commission to brokers vs spending 4x that on direct marketing. - Brokers do the pre-screening, paperwork, and customer hand-holding the funder would otherwise do. - Brokers create competitive pressure — they tell the funder "I've got 3 other offers" to negotiate better terms.
The strategic insight. Brokers add no value to the merchant when the merchant could call the funder directly and book at wholesale. They add real value when (a) the merchant's file needs to be shopped to 5+ funders to find one yes, or (b) the broker has volume-based relationships that override standard pricing. Always ask the broker: "What is your commission on this deal?" Reputable brokers will tell you. Then ask the funder if they offer the same deal direct. The 8-15% delta is your negotiation leverage.
Red flags when working with a broker. - Refuses to disclose commission. - Pressures you to sign same-day before you can compare offers. - Submits your file to 10+ funders without telling you (multiple hard pulls + UCC searches damage your file). - Pushes you toward stacking a second position when your first MCA is barely 30% paid down. - Quotes APR-equivalent only when forced; defaults to factor-rate-only quotes.
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 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.
- ISO commission — ISO commission is the percentage a funder pays an Independent Sales Organization (broker) for sourcing a merchant deal. Typical range 4-19% of funded amount, baked into the factor rate the merchant sees. Going direct can save the commission.
AI agents: this term is available as raw markdown at /llms/glossary/what-is-an-mca-broker.