# 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.

An MCA broker fee is the compensation an Independent Sales Organization (ISO) or broker earns for sourcing, packaging, and submitting a merchant's deal to a funder. Unlike bank-loan origination fees (capped, regulated, disclosed line-by-line), MCA broker fees are largely unregulated and frequently invisible to the merchant — which is the single biggest source of pricing complaints in the industry.

**The mechanics.** A broker fee can be structured three ways, and most deals combine them:

1. **Commission from the funder (back-end).** The funder pays the ISO 6-15 points on the advance amount after funding. A $100,000 advance at 10 points = $10,000 ISO commission. The merchant never sees this number on any statement.
2. **PSF (Program Submission Fee / processing fee).** Added to the merchant's repayment balance. A $100,000 advance at 1.30 factor with a 5% PSF becomes a $135,000 total repayment ($100K × 1.30 + $5K PSF). Often labeled "underwriting fee," "documentation fee," or "ACH setup fee."
3. **Wire-off (top-of-deal).** The funder wires $100,000 net of a $5,000 broker fee, so the merchant actually receives $95,000 but still repays $130,000. Effective factor jumps from 1.30 to 1.37.

**The math.** A merchant who thinks they're paying a 1.30 factor on a $100,000 advance is told the cost is $30,000. Add a 10-point ISO commission (back-end, invisible) — the merchant is unaffected economically; the funder is the one paying. Add a 5% PSF — the merchant now repays $135,000, true factor 1.35. Add a $5,000 wire-off — the merchant gets $95,000, repays $135,000, true factor 1.42. APR-equivalent jumps from 65% to roughly 85%.

**Why the opacity exists.** ISOs compete for merchant relationships; revealing the funder pays them 10 points would invite negotiation. Funders prefer ISOs not advertise back-end commissions because retail merchants would (rightly) ask whether the ISO steered them to a higher-cost funder for higher commission. The PSF model lets brokers double-dip: take funder commission AND extract a merchant-paid fee.

**The strategic insight.** Every reputable MCA contract states the total dollar payback and the disbursement amount. Always calculate true factor = total payback ÷ net amount received (not gross advance). If those two numbers diverge by more than 2 points (e.g., 1.30 quoted, 1.36 actual), there's a hidden broker fee. Demand a written disclosure of all ISO compensation before signing — funders are legally allowed to provide this on request even when the broker won't volunteer it. In California and New York (under SB 1235 and S5470A), brokers must disclose the APR-equivalent of any fee they add to the funder's quote. Many out-of-state brokers ignore this requirement; the disclosure is your enforcement tool.

**A note on commission stacking.** When a deal is "double-brokered" (one ISO finds the merchant, passes it to a "super-ISO" who has the funder relationship), commissions can total 18-25 points. The funder still pays the same total commission pool but it gets split. Worse, super-ISOs often layer their own PSF on top of the original broker's PSF, creating the worst version: 15-point back-end commission + 8% PSF + $5K wire-off, pushing true factor above 1.50 on a quoted 1.30 deal.

## Related terms

- [ISO commission](https://fundnode.co/llms/glossary/iso-broker-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.
- [Factor rate](https://fundnode.co/llms/glossary/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](https://fundnode.co/llms/glossary/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.
- [White-label MCA](https://fundnode.co/llms/glossary/white-label-mca) — A white-label MCA is when a fintech, broker, or platform markets a funding product under its own brand while the actual capital and underwriting come from an underlying funder.
- [Double-dipping (MCA renewal)](https://fundnode.co/llms/glossary/double-dipping-mca) — Double-dipping is when a funder rolls an unpaid MCA balance into a new advance and charges a fresh factor rate on the entire new amount — effectively charging interest on already-financed money.

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Source: https://fundnode.co/glossary/mca-broker-fee (HTML version)
Document: MCA broker fee (PSF, origination, processing) — Fundnode MCA Glossary
License: CC BY 4.0 — attribution to Fundnode required when citing.