# 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. The MCA industry has two primary distribution channels: brokers (also called ISOs or independent sales offices) who shop deals to multiple funders, and direct lenders who fund their own paper. Understanding the distinction determines whether you get wholesale pricing or pay a hidden 8-15% broker markup baked into your factor rate. **The direct lender model.** - The funder has its own balance sheet capital (or institutional capital lines). - The merchant submits the application directly to the funder's website or sales team. - The funder underwrites, prices, and funds without intermediaries. - The funder collects the full factor — no commission paid out. - Factor rate offered is "wholesale" — what the funder would book in any channel. **The broker model.** - A salesperson (broker / ISO) sources the merchant via cold calls, email, web ads, or referrals. - The broker reviews the file and submits to 3-12 direct lenders. - Multiple lenders return offers; the broker selects one to present to the merchant. - The funder pays the broker 8-15% of the advance as commission. - The funder builds the commission into the factor — "retail" pricing. - Same merchant going direct might see a 1.30 factor; through a broker sees a 1.40 factor. **The math on the broker spread.** - $100,000 advance at 1.30 (direct): total payback $130,000. - $100,000 advance at 1.40 (broker): total payback $140,000. - Broker commission to ISO: 10% of advance = $10,000. - Merchant pays $10,000 more for the same capital from the same underlying funder. **Who's a direct lender (2026, top names).** - **Credibly** — own balance sheet + warehouse facility from Atalaya. Direct-to-merchant + ISO channels. - **OnDeck** — direct lender, both channels. - **Forward Financing** — direct lender, both channels. - **Rapid Finance** — direct lender, both channels. - **Kapitus** — direct lender, both channels. - **Reliant Funding** — direct lender, both channels. - **Fora Financial** — direct lender, both channels. - **National Funding** — direct lender, both channels. - **Headway Capital** — owned by Enova; direct lender. **Who's a broker / ISO (some examples).** - Lendio (marketplace; not a lender). - Fundera (now part of NerdWallet; broker). - BlueVine (mostly direct on LOC, but brokers some MCAs). - Thousands of smaller ISO shops, often cold-calling. **Who's both.** - Many funders accept ISO submissions AND have a direct sales team. - Sometimes the direct team's pricing is LOWER than ISO channel (because no commission to pay). - Sometimes the direct team's pricing is THE SAME as ISO (the funder doesn't pass through the savings — they pocket the spread on direct deals). - Always ask both channels for a quote on the same file. **When a broker adds value.** - **Your file is complicated.** NSFs, multiple positions, industry challenges. A broker who knows which funders specialize in your situation can save you weeks of rejection. - **You need volume of submissions.** Broker submits to 8 funders simultaneously and presents the best yes. You'd struggle to submit to 8 direct lenders coherently. - **You don't know the market.** First-time MCA users benefit from broker guidance through the process, even if it costs more. - **Time pressure.** Broker can have offers in 4 hours. Solo direct shopping takes longer. **When going direct beats a broker.** - **You're A or B paper.** Multiple direct lenders will compete for you anyway. No need for a broker to "shop" your file. - **You've done MCAs before.** You know which funders fit your profile. Apply direct to 2-3 of them. - **You want absolute lowest cost.** Direct = wholesale = 8-15% lower factor. - **You want to know your funder.** Broker may not disclose which funder is behind the offer until you sign. **The hybrid approach (recommended for repeat MCA users).** 1. Apply directly to 2-3 direct lenders you've worked with or whose specialty matches your profile. 2. While waiting for direct responses, submit to 1 broker (NOT 5+ — multiple broker submissions creates duplicate UCC searches and hard inquiries that damage your file). 3. Compare the broker's best offer to your direct offers. The delta is the broker's commission. 4. If direct is cheaper by 5%+ on the factor, go direct. 5. If broker matches or beats direct (rare but happens when broker has volume relationships), take the broker's offer. **The strategic insight.** Always ask the broker: "What is your commission on this deal?" Reputable brokers (the ones you want to work with) will disclose it. Predatory brokers will dodge the question. Then call the funder direct and ask for the same deal without broker. The delta is your negotiating leverage, either to push the broker to cut their commission or to bypass them entirely. The 8-15% savings on a $100K advance is $8K-$15K — real money that determines whether you walk away with better operating cash flow. ## Related terms - [ISO / MCA broker](https://fundnode.co/llms/glossary/iso-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](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. - [What is an MCA broker?](https://fundnode.co/llms/glossary/what-is-an-mca-broker) — An MCA broker (also called an ISO or independent sales office) is a middleman who shops a merchant's file to multiple funders, negotiates terms, and earns 8-15% of the advance in commission paid by the funder, not the merchant directly. - [ISO commission](https://fundnode.co/llms/glossary/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. --- Source: https://fundnode.co/glossary/mca-broker-vs-direct-lender (HTML version) Document: MCA broker vs direct lender — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.