How do MCA brokers actually get paid?

Through four primary streams: (1) origination commission from the funder, typically 6 to 15% of the advance; (2) factor-rate markup, where the broker raises the funder's wholesale rate by 0.05 to 0.15 and keeps the spread; (3) merchant-paid fees in some states or arrangements; (4) renewal commission when the merchant funds again. The largest single source for most brokers is the funder-paid origination commission.

Is the broker commission paid by me or by the funder?

In most cases the funder pays the broker directly, and the cost is reflected in your factor rate. The funder budgets 10 to 18% of the advance for total origination cost (broker commission plus internal sales overhead) and prices accordingly. So while you do not write a check to the broker, you pay for the broker in your factor.

Can I negotiate the broker markup?

Yes. In CA, NY, CT, and VA, brokers are increasingly required to disclose the funder's wholesale rate alongside the marked-up rate they quote you. Knowing the wholesale rate gives you direct negotiating leverage on the markup. In other states, the broker is not required to disclose — but you can always ask, and refusal is a strong signal.

What is a residual or renewal share?

Some broker compensation structures include a residual: the broker continues to earn a small percentage of the funder's revenue on the merchant for the life of the relationship, including future renewals originated directly. This creates an incentive for the broker to maintain the relationship even after the first deal closes — but also creates conflict of interest because the broker may discourage refinancing to a different funder.

Are direct funders cheaper than going through a broker?

Sometimes meaningfully, often not at all. Direct funders that you reach through search or referral skip the broker commission, which can save 0.05 to 0.10 on the factor. But direct funders also have less competitive pressure to discount, so the savings vary. The cleanest path is usually a transparent marketplace that shows you the funder's wholesale rate alongside any platform fee.

What is a fair broker commission?

Broker economics vary by deal size and complexity. For a typical $50K to $200K mid-market MCA, a 8 to 12% origination commission from the funder is market. Anything materially above that (15%+) is the broker capturing volume that should accrue to you in better pricing. If your broker is making 18% on your deal, you are overpaying meaningfully.

MCA broker revenue share economics 2026 — how brokers actually get paid and what it costs you

MCA brokers earn through commission, markup, residual, and renewal share. Most merchants pay 8 to 15% of their advance to brokers without realizing it. Here is the detailed 2026 breakdown of how broker money flows and how to negotiate.

The 60-second answer

MCA brokers are paid through four primary revenue streams, in order of magnitude:

Origination commission from the funder — typically 6 to 15% of the advanced amount, paid at funding. This is the largest single revenue source for most brokers.
Factor-rate markup — the broker raises the funder's wholesale rate by 0.05 to 0.15 and keeps the spread, capitalized over the term of the advance.
Merchant-paid fees — application fees, processing fees, or consultation fees charged directly to the merchant. Legal in most states but regulated in CA, NY, CT, VA.
Renewal commission and residuals — ongoing revenue when the merchant funds again at the same funder, often at a reduced rate.

The total cost of brokerage to the merchant, summed across these streams, typically runs 12 to 22% of the advanced amount on a first deal. On a $100K advance, that is $12K to $22K flowing to the broker — almost always more than the merchant realizes.

Stream 1: origination commission from the funder

The largest revenue stream for most MCA brokers. The funder pays the broker a commission at funding, calculated as a percentage of the advanced amount. The standard ranges:

A-paper deals ($150K+): 4 to 8% origination commission
B-paper deals ($50K to $150K): 8 to 12%
C-paper deals (under $50K): 10 to 15%
High-touch specialty deals: 12 to 18%

The funder budgets this commission into the overall economics of the deal. A funder targeting a 1.30 factor on a $100K B-paper advance is structuring as follows: $100K principal, $30K total finance charge, $10K to broker commission, $5K to funder origination overhead, $4K to expected loss reserve, $11K to capital cost and equity return.

That $10K broker commission is paid by the funder but priced into the factor rate. If the merchant had gone direct to the funder, the funder could have priced at a 1.20 or 1.22 factor while still hitting the same equity return — the $10K commission savings would have flowed to the merchant.

Stream 2: factor-rate markup

On top of the origination commission, many brokers also mark up the factor rate. The funder quotes the broker a wholesale rate of 1.28 on a deal; the broker presents it to the merchant at 1.35; the spread (worth roughly $7K on a $100K deal over the term) flows to the broker.

The mechanics vary by funder. Some funders set a single rate and the broker chooses whether to take a higher commission or pass through to the merchant as a lower rate. Other funders publish wholesale rates and let brokers price markup independently.

Markup is the most negotiable element of broker compensation. In CA, NY, CT, and VA, brokers are increasingly required to disclose the wholesale rate alongside the marked-up rate. Knowing the wholesale gives the merchant direct leverage to negotiate the markup down — which is the single highest-impact negotiation in most MCA deals.

Stream 3: merchant-paid fees

Some brokers charge fees directly to the merchant in addition to receiving funder-paid commission. The legality varies:

California (SB 1235 and SB 666): Broker fees are capped and must be disclosed. Material fees on top of funder-paid commission may trigger registration requirements.
New York: Brokers must register with DFS and disclose fee structures. Excessive merchant-paid fees relative to commission are subject to scrutiny.
Connecticut, Virginia: Fee disclosure required.
Other states: Generally permitted, with no specific cap or disclosure requirement — though state consumer protection law still applies.

Common merchant-paid fee types and typical ranges:

Application fee: $0 to $500. Most legitimate brokers do not charge this; if a broker demands an upfront application fee, it is a red flag.
Processing fee: $250 to $1,500. Sometimes legitimate for complex specialty deals; sometimes a markup vehicle.
Consultation fee: $500 to $2,500. Usually applies in advisory-style broker engagements rather than transactional brokerage.

Stream 4: renewal and residual

Some funder-broker relationships include ongoing economics tied to the merchant. The mechanics:

Renewal commission: When the merchant funds again, the original broker receives a commission on the new advance, typically at a reduced rate (4 to 7%) compared to the first deal.
Residual share: The broker continues to earn a small percentage of the funder's revenue on the merchant for the life of the relationship, regardless of who originated the next deal.

The structural concern with renewal and residual arrangements is the conflict of interest they create. The broker has economic incentive to keep the merchant at the same funder even when refinancing to a different funder would be in the merchant's interest. Best brokers are transparent about this; worst brokers steer merchants toward renewals that are not in their interest.

Total broker cost on a typical deal

Concrete example: $100,000 B-paper MCA at a 1.32 factor with a 12-month term.

Funder-side economics

Wholesale rate to broker: 1.26 factor
Total payback at wholesale: $126,000
Funder finance charge at wholesale: $26,000
Origination commission paid to broker: $10,000 (10%)

Broker markup

Quoted factor to merchant: 1.32
Total payback at quoted rate: $132,000
Markup captured by broker: $6,000 ($132K - $126K)

Total broker compensation

Funder-paid commission: $10,000
Factor-rate markup: $6,000
Total: $16,000 — 16% of the advanced amount

If this merchant had gone direct to the funder at wholesale (1.26), they would have paid $126K total instead of $132K — saving $6K on the advance. If the funder had been willing to price at the cost-of-capital without the commission ($120K), the merchant would have saved $12K.

How to negotiate broker cost down

Ask for the funder's wholesale rate in writing. Required by law in CA, NY, CT, VA. Strong best practice everywhere else. Refusal is a meaningful signal.
Ask the broker their commission rate. Less commonly disclosed but increasingly demanded. "What is the funder paying you on this deal?" is the direct question.
Negotiate the markup separately from the wholesale. If the wholesale is 1.26 and the broker quoted 1.34, the negotiable element is the 0.08 spread. Pushing to 1.30 splits the markup between you and the broker.
Get competing quotes from multiple sources. Different brokers will mark up the same wholesale rate differently. Three quotes can save 0.05 to 0.10 on the factor.
Consider going direct to the funder. Top funders accept direct applications and skip broker commission entirely. Skip-the-broker pricing can save 4 to 8% on the advance.
Use a transparent marketplace. Platforms that show wholesale rates and charge a single transparent fee (rather than embedded markup) align incentives with the merchant.

When a broker is worth the cost

Brokers are not categorically bad. Real value a good broker provides:

Funder shop coverage. An experienced broker who has relationships with 15 to 25 funders can identify which one will price your specific profile most aggressively. The pricing advantage from picking the right funder often exceeds the broker's markup.
File packaging. A broker who knows how to present your bank statements, frame NSF episodes, and explain industry-specific cashflow can move you up a tier — saving 0.05 to 0.10 on the factor that exceeds the markup.
Specialty industry expertise. Brokers who specialize in trucking, medical, restaurant, or construction often have access to specialty funders that generalist channels do not surface.
Speed. A broker who can prepare a clean submission package, follow up with underwriting, and push to fund in 48 hours adds real value when speed matters.

The broker value depends entirely on whether the broker is competent, honest about markup, and aligned with the merchant rather than the funder. Bad brokers steer merchants to funders that pay highest commission rather than priced most aggressively. Good brokers do the opposite.

Red flags that signal an extractive broker

Refuses to disclose wholesale rate. Especially in regulated states where disclosure is legally required.
Charges significant upfront fees. Most legitimate brokers are paid by the funder; large merchant-paid fees on top suggest extraction rather than service.
Pressure to sign within hours. No legitimate funder requires same-day signing. Pressure tactics signal a broker rushing past disclosures.
Only quotes one funder. A real broker shop should evaluate 5 to 10 funders for any deal. A single-funder quote often means the broker has a steered relationship.
Resists refinance after the first deal. Brokers earning residuals may discourage refinance to a different funder even when it would benefit the merchant.

The bigger picture

The MCA broker industry is shifting as state disclosure laws tighten and transparent marketplaces gain ground. Brokers who deliver real value through funder shop coverage, file packaging, and specialty expertise will continue to thrive. Brokers whose entire value proposition is opaque markup are losing share to direct funder channels and transparent platforms.

For merchants, the practical takeaway: brokerage is a service that can be worth paying for, but the cost should be transparent and negotiated. The 12 to 22% of the advance flowing to a broker on a typical deal is real money — and you have more leverage to negotiate it than most brokers will volunteer. Ask the questions, get the wholesale rate in writing, and treat the markup as the single biggest negotiation in the deal.

Frequently asked questions

How do MCA brokers actually get paid?: Through four primary streams: (1) origination commission from the funder, typically 6 to 15% of the advance; (2) factor-rate markup, where the broker raises the funder's wholesale rate by 0.05 to 0.15 and keeps the spread; (3) merchant-paid fees in some states or arrangements; (4) renewal commission when the merchant funds again. The largest single source for most brokers is the funder-paid origination commission.
Is the broker commission paid by me or by the funder?: In most cases the funder pays the broker directly, and the cost is reflected in your factor rate. The funder budgets 10 to 18% of the advance for total origination cost (broker commission plus internal sales overhead) and prices accordingly. So while you do not write a check to the broker, you pay for the broker in your factor.
Can I negotiate the broker markup?: Yes. In CA, NY, CT, and VA, brokers are increasingly required to disclose the funder's wholesale rate alongside the marked-up rate they quote you. Knowing the wholesale rate gives you direct negotiating leverage on the markup. In other states, the broker is not required to disclose — but you can always ask, and refusal is a strong signal.
What is a residual or renewal share?: Some broker compensation structures include a residual: the broker continues to earn a small percentage of the funder's revenue on the merchant for the life of the relationship, including future renewals originated directly. This creates an incentive for the broker to maintain the relationship even after the first deal closes — but also creates conflict of interest because the broker may discourage refinancing to a different funder.
Are direct funders cheaper than going through a broker?: Sometimes meaningfully, often not at all. Direct funders that you reach through search or referral skip the broker commission, which can save 0.05 to 0.10 on the factor. But direct funders also have less competitive pressure to discount, so the savings vary. The cleanest path is usually a transparent marketplace that shows you the funder's wholesale rate alongside any platform fee.
What is a fair broker commission?: Broker economics vary by deal size and complexity. For a typical $50K to $200K mid-market MCA, a 8 to 12% origination commission from the funder is market. Anything materially above that (15%+) is the broker capturing volume that should accrue to you in better pricing. If your broker is making 18% on your deal, you are overpaying meaningfully.