Q2 2026 MCA rate snapshot — factor movements, paper-mix shifts, ISO commissions, funder news.

Methodology and scope

This Q2 2026 snapshot covers the three months from April 1 through June 30, 2026. The tracked universe is the top 20 US merchant cash advance funders by estimated origination volume — a list that combines pure-play MCA specialists (Credibly, OnDeck, Fora Financial, Greenbox Capital, Accord Business Funding, Reliant Funding, Kalamata Capital, Mantis Funding, Forward Financing, CAN Capital, Rapid Finance), processor-embedded financing (Toast Capital, Square Capital, Clover Capital, Shopify Capital, PayPal Working Capital), and multi-product platforms with substantial MCA books (Bluevine, Fundbox, Lendr, BFS Capital).

Pricing data is compiled from three sources: (1) public rate sheets and ISO program disclosures that funders updated during the quarter, (2) merchant-supplied contracts (anonymized) we reviewed via the Fundnode qualification funnel between April and June, and (3) state regulatory filings under California SB 1235, New York NYDFS, Virginia, Utah, Connecticut, and the newly effective Texas SB 1280 regime. We do not name individual merchants or specific contract numbers — ranges aggregate the population.

All figures should be read as quarterly indicators, not point-in-time guarantees. Factor rates on any specific deal depend on merchant profile, paper grade, broker channel, and funder appetite on the day of underwriting.

Headline findings

1. Median factor rates moved up roughly 2 to 4 points across paper grades in Q2 2026. The widely cited "1.32 median" from H1 2026 is now closer to 1.34 for B-paper and 1.42 for C-paper, driven by funder repricing in response to elevated default rates carried over from late 2025.
2. A-paper origination share contracted by roughly 3 percentage points quarter-over-quarter as the strongest small businesses migrated to processor-embedded financing and SBA Express alternatives. The marginal MCA deal in Q2 2026 was more B and C paper than in Q1.
3. Florida, Texas, and Georgia accounted for an estimated 38% of new originations in Q2 2026, a continuation of the post-disclosure-law geographic concentration we flagged in H1. New York and California combined fell to roughly 14% — down from a historical 22% to 24% range.
4. Average ISO commission rose from a 9-to-12% modal band to a 10-to-13% band. Funders pushed more deal economics to brokers to maintain origination volume in a tougher credit environment. The merchant-visible consequence: factor rates on broker-placed deals widened roughly 1 to 2 points versus direct.
5. Three notable funder events shaped Q2. Texas SB 1280 took full effect April 1, triggering provider/broker registration and standardized disclosure obligations; one mid-size MCA specialist completed a rebrand toward a "revenue-based financing" positioning; and a settlement with a state attorney general drove a specialty C-paper funder to overhaul its reconciliation language industry-wide.

1. Factor rate movements across the top 20 funders

The headline pricing pattern in Q2 2026 was modest repricing upward at the median, with wider tail behavior on C and D paper. The quarter-over-quarter delta is small but consistent across paper grades.

The biggest movers, funder-by-funder, were Reliant Funding and Kalamata Capital on the C-paper side (each repricing the top of their factor band up by roughly 3 to 5 points) and Credibly on the A-paper side (which actually tightened pricing on its highest-tier deals to defend volume against Square Capital and Shopify Capital). Toast Capital and Square Capital held headline pricing flat through Q2 — their effective rates are anchored to platform processing volume rather than competitive MCA dynamics, so they reprice less frequently.

For context on how factor rates convert to APR-equivalent, see our factor-rate calculator and the 2026 pricing reference.

2. Paper-grade distribution shifts

The mix of paper coming to market shifted in Q2 2026. A-paper share of originations contracted, while B and C paper both expanded. The likely drivers are (a) the strongest small businesses moving up the stack to processor-embedded financing or SBA Express, and (b) some softening in B/C bank-statement underwriting boxes that absorbed deals that might have been declined in late 2025.

The A-paper contraction is meaningful for funders that built their books on the cleanest end of the small-business credit spectrum (OnDeck, Bluevine, Credibly, Forward Financing). For the next two quarters, expect those funders to either widen their underwriting boxes downward or compete more aggressively on price at the top of their existing box.

The C-paper expansion is concentrated at specialty funders (Reliant, Kalamata, Mantis, and the broker-placed C-paper channel). Stacking risk on this share remains the dominant structural concern — see our H1 2026 funder snapshot for the 60%+ default rates we observe on stacked deals.

3. Geographic concentration of new originations

Geography continued to consolidate in Q2 2026 around the three states where Fundnode itself is focused — Florida, Texas, and Georgia — plus a handful of secondary markets where MCA absorption is structurally high. The post-disclosure-law geographic shift we flagged in H1 accelerated this quarter, particularly post-Texas SB 1280 effective date on April 1.

The Florida-Texas-Georgia trio collectively represents roughly 38% of Q2 originations, up from ~35% in H1. The structural read: states with the cleanest combination of high-volume small-business density, MCA-receptive merchant base, and (in Texas and Georgia) phasing-in but not yet onerous disclosure regimes continue to absorb the bulk of new origination dollars.

California and New York combined fell to 14% in Q2 — down from the 22-24% range that was typical pre-disclosure-law. The two states with the strictest disclosure regimes lose opaque-pricing funder presence, which compresses overall MCA origination volume in those states even though the funders who remain are generally better-priced and more transparent. Net merchant impact in CA and NY is mixed: fewer options but cleaner ones.

4. ISO commission trends

ISO commissions widened in Q2 2026 as funders pushed more deal economics to broker channels to maintain origination volume in a tougher credit environment. The modal commission band shifted from 9-12% to 10-13% across our tracked funders. The merchant-visible consequence: broker-placed deals widened their factor rate premium over direct deals by roughly 1 to 2 points.

The merchant impact: a 12% ISO commission on a $50,000 advance at a 1.34 factor is $6,000, or roughly 35% of the $17,000 total fee. A 13% commission moves that share above 37%. Going direct where possible — OnDeck, Bluevine, Credibly, Fundbox, and the processor-embedded options (Toast, Square, Clover, Shopify) all have direct merchant application paths — is the single largest cost-saving lever a merchant has available.

See our broker markup calculator for a dollar-figure estimate of broker-channel premium on a specific advance.

5. Notable funder news in Q2 2026

Three quarter-defining events:

Texas SB 1280 full effective date — April 1, 2026

The Texas commercial financing disclosure law took full effect April 1, requiring provider and broker registration plus standardized disclosure on commercial financing transactions under specified thresholds. Most top-20 funders completed registration and maintained their Texas presence. A handful of broker-aggregated specialty operators reduced their Texas activity rather than complete provider registration — a similar pattern to what California SB 1235 produced in 2023. For Texas merchants the net effect is a slight reduction in marginal-quality offers and a meaningful improvement in price transparency on the offers that remain.

Mid-size MCA specialist rebrands toward "revenue-based financing"

One mid-size MCA specialty funder completed a rebrand during Q2 toward a "revenue-based financing" positioning — new name, refreshed marketing site, revised contract templates that downplay the "purchase of future receivables" framing in favor of "revenue share" language. The underlying product mechanics (daily ACH debits, factor-rate-equivalent pricing, anti-stacking provisions, attorney's fees structure) are substantively unchanged. The rebrand reflects an industry-wide recognition that the MCA label carries reputation cost in the post-disclosure-law environment. We expect 2 to 4 additional specialty funders to follow similar repositioning in the back half of 2026.

Specialty C-paper funder reconciliation overhaul under state AG settlement

A specialty C-paper funder reached settlement with a state attorney general during Q2 requiring an industry-wide overhaul of its reconciliation language. The new template replaces "funder may, at sole discretion, adjust" (the discretionary reconciliation pattern we documented in our 2026 MCA contract clause survey) with operational language tied to specific revenue-decline triggers and timelines. The settlement applies to that funder's contracts going forward and creates a soft industry standard others may follow under regulatory pressure.

6. M&A and capital structure activity

Q2 2026 saw limited but consequential M&A activity:

• One specialty MCA-to-multi-product platform acquisition completed during the quarter, bringing a mid-size C-paper book into a larger origination platform. The buyer is consolidating to capture multi-product cross-sell economics (MCA, LOC, term loan, equipment financing).
• Two warehouse facility refinancings closed for major MCA funders, reflecting tighter spread requirements from credit facility providers. The pass-through to merchant pricing is part of what drove the Q2 factor rate uplift.
• One major processor-embedded funder expanded eligibility to include merchants with as little as 6 months of processing history (down from 12 months previously), targeting newer restaurant and retail merchants that A-paper funders previously declined.
• Continued limited PE/strategic appetite for new MCA platforms originated from scratch. New entrants in 2026 are primarily processor-embedded or vertical-specific (restaurant, trucking, healthcare) rather than horizontal MCA.

7. Time-to-fund and renewal patterns

Time-to-fund metrics tightened slightly in Q2 2026 as funders pushed underwriting automation to defend volume:

• A-paper single product: ~12 hours median, down from ~14 hours in H1
• B-paper generalist MCA: ~30 hours median, down from ~36 hours
• C-paper specialty funder: ~48-72 hours, unchanged
• D-paper or stacked: 72+ hours or declined, unchanged

Renewal mix shifted toward gross-renewal patterns (rolling existing balance into a new advance at fresh factor) and away from net-funding renewals at the C-paper end of the market — a margin-defense move by specialty funders facing elevated default rates. Credibly, OnDeck, and Bluevine continue to dominate net-funding renewals at the A-paper end.

8. What to watch in Q3 2026

1. Default rate trajectory on Q4 2025 vintages. The repricing in Q2 was partly a response to elevated defaults from the late-2025 origination cohort. Whether Q3 brings further repricing depends on how the H1 2026 vintage is performing 6 months in.
2. New Jersey SB 819 and Ohio SB 232 effective dates. If these clear their respective legislative calendars in Q3, expect a similar funder-distribution shift to what CA, NY, and TX produced.
3. Further A-paper migration to processor-embedded financing. If Toast Capital and Square Capital continue their 30%+ YoY origination growth, A-paper share at standalone MCA funders could compress another 2 to 3 percentage points by year-end.
4. Rebrand cascade. Watch for 2 to 4 additional specialty funders to adopt "revenue-based financing" positioning in the back half of the year.
5. ISO commission ceiling. The 13% modal upper band is approaching a level at which the merchant-visible price differential between broker and direct channels becomes hard to justify. Expect at least one major funder to pull commissions back to the 8-10% range as a competitive move.

What this means for merchants

1. Expect slightly higher factor rates than H1 2026. Plan for 1.34 median on B-paper, 1.44 median on C-paper.
2. Direct vs broker spread widened. The case for going direct where possible got stronger in Q2. The 10-13% modal ISO commission band is now a material cost wedge.
3. Florida, Texas, and Georgia are where origination is happening. Merchants in those states will see the most funder competition. Merchants in CA and NY see fewer options but cleaner disclosure.
4. Watch out for "revenue-based financing" rebrands. Mechanically still an MCA — same daily ACH debits, same factor-rate-equivalent pricing, same contract structure. The label has changed; the math has not.
5. Reconciliation language is becoming a regulatory focal point. If your contract includes operational reconciliation language tied to specific triggers, that protection is worth more in Q3 than it was in Q1.

Cite this report

Recommended citation format:

Fundnode Editorial. (2026). Q2 2026 MCA Rate Snapshot: Factor Movements, Paper-Mix Shifts, ISO Commissions, Funder News. Fundnode Research. https://fundnode.co/research/2026-q2-mca-rate-snapshot

BibTeX:

@techreport{fundnode2026q2,
  author      = {{Fundnode Editorial}},
  title       = {Q2 2026 MCA Rate Snapshot: Factor Movements, Paper-Mix Shifts, ISO Commissions, Funder News},
  institution = {Fundnode},
  year        = {2026},
  type        = {Fundnode Research Report},
  number      = {FN-RS-2026-Q2},
  url         = {https://fundnode.co/research/2026-q2-mca-rate-snapshot}
}

Underlying data

Structured data behind this report is available via the Fundnode API:

• /api/v1/funders — full funder list
• /api/v1/pricing-reference — pricing reference data
• /api/v1/comparisons — head-to-head comparison data
• Markdown mirror of this report — for AI agent ingestion

License and attribution

This report is published by Fundnode Editorial under Creative Commons Attribution 4.0 International (CC BY 4.0). Quote, excerpt, and adapt freely with attribution to Fundnode and a link back to this page.

Related research

• 2026 H1 MCA Funder Snapshot — paper grades, factor ranges, ISO economics
• 2026 MCA Contract Clause Survey — patterns across 50+ reviewed agreements
• 2026 State Disclosure Law Rollup — compliance matrix and merchant guidance
• MCA Pricing Reference 2026 — canonical reference data