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Merchant Cash Advance Broker Fees: How Brokers Get Paid
Points, commissions, and borrower-paid fees: where a merchant cash advance broker's pay comes from, and the questions that put every dollar on the table.
The short answer
Business funding brokers — including merchant cash advance brokers — are paid in points: one point is one percent of the funded amount. The commission is either paid by the funder and priced into the offer you receive, charged to you directly as a fee, or both at once. Either way it travels through your deal, which is why total payback in dollars is the number to check.
Key takeaways
- One point is one percent of the funded amount, and the commission has only two possible sources: the funder's pricing or your pocket — sometimes both.
- A funder-paid commission never appears as a line item; total payback in dollars is the one place it cannot hide.
- Pay structures buy behaviors: points reward the biggest fundable number, closing commissions reward the fastest close, and per-placement pay is indifferent to stacking.
- Some placements are real work worth paying for; the four questions tell you in minutes whether that work is happening on your file — and what the introduction costs in dollars.
- Four questions surface the whole picture, starting with: are you funding this yourself?
The search that brought you here — merchant cash advance broker fees — usually stands in for a more pointed question: how does the person who called me about funding make money, and is it costing me? Fair question. The compensation mechanics in this industry are not complicated, but they are almost never explained to the person whose deal pays for them. Here is the whole picture.
One disclosure before the mechanics. Express Capital is a direct funder: we underwrite from our own capital, and when you apply with us directly, no placement and no commission ride on your file — which is exactly what makes us comfortable walking you through how the schedules work.
A point is one percent of the funded amount — and it always comes from somewhere
Broker compensation in business funding — including the product you may know as a merchant cash advance, which the industry increasingly calls revenue-based funding — is quoted in points. One point is one percent of the funded amount. Say a broker places a $60,000 advance and earns ten points: that is $6,000, on one file, for the placement. Every number in this article is a visibly made-up hypothetical, chosen for clean arithmetic; the mechanic is what matters.
That $6,000 has exactly two possible sources. Either the funder pays it and recovers the cost in the structure it offers you, or you pay it directly, as a fee charged on top of the deal. In practice there is a third arrangement, which is both at once. What there is not — anywhere in this industry — is a version where the commission comes out of nobody's pocket.
| How the broker is paid | Where it appears | What it means for you |
|---|---|---|
| Funder-paid commission, in points | Nowhere you can see — it is priced into the offer | Your cost carries the placement even though no line item says so |
| Borrower-paid fee | A charge to you, on or alongside the agreement | Visible, at least — read exactly what triggers it and when it is due |
| Both at once | A visible fee plus a priced-in commission | The full cost of the introduction is larger than the line item suggests |
| Repeat and renewal commissions | Each new placement of your file, including future ones | Your file is worth more to the broker every time it moves |
Priced in is the phrase doing all the work
A funder that pays commissions is not a charity; the cost of acquiring a deal is part of that deal's economics. This is why two similar businesses can be offered different structures for the same amount — one file arrived carrying a placement cost and one did not. None of it appears as a broker fee on anything you sign, which is why hunting the paperwork for one proves nothing.
The instrument that cuts through it is total payback: every dollar that will leave your account, divided by the dollars that actually land in it. A commission can hide inside a structure; it cannot hide from that ratio. Run it on any offer you are weighing — the cost-of-capital calculator on this site exists for exactly this.
Every pay structure buys a behavior
None of this requires anyone to be dishonest. It requires you to notice what the structure rewards. A commission earned in points on the funded amount rewards the biggest fundable number, which is not the same thing as the number your deposits can comfortably service. A commission earned at closing rewards the fastest close, which is not the same thing as the best structure. And a commission earned on every placement rewards moving your file again — at renewal time, or when a second position can be arranged on top of a first.
That last one deserves its own sentence. A broker is paid on each position that funds, so the compensation model is indifferent to whether a second advance on top of an existing one helps you or hurts you. It usually hurts: stacking is the most reliable way to turn a temporary cash-flow gap into a structural one, and the person arranging it earns the same points either way.
Paydown conventions vary; renewal is never automatic; every renewal is a new underwriting decision.
When the points are deserved — and when nobody should be paid at all
An honest page about broker pay has to say plainly that the pay is sometimes deserved. Placement can be real work: knowing which desks will actually read a hard profile, packaging the application so it survives underwriting, staying on the phone until a difficult deal closes. When that work is happening on your file, the points are buying something. The four questions below exist to tell you whether it is happening — because on a straightforward profile, the same points often buy nothing but the dialing.
And sometimes the right answer is that nobody gets paid, because no deal should happen. If the honest purpose of new money is covering the payments on existing money, the problem is structural and another position deepens it — pay down first. If a bank's timeline fits your need and you qualify there, the cheaper capital is sitting at the bank; take it. Funding has to buy a return — a contract you can now take on, inventory that sells through, a crew you keep working. When there is no return on the other side, the smallest commission in the world does not make it a good deal.
Four questions that put every dollar on the table
- 1
Are you funding this yourself?
One-word answer, and every question after it reads differently depending on which word comes back. It establishes whether you are talking to the decision-maker or to an intermediary — our companion piece, Business Loan Broker vs Direct Lender: The Commission Math, walks that comparison end to end.
- 2
What do you earn on this deal, and who pays it?
A fair, professional question that honest operators answer directly. Hedging is itself information.
- 3
Is any fee charged to me — and exactly what triggers it?
A placement fee tied to a deal that actually funds is a cost you can weigh. A fee due before any funding exists is a pause-and-verify moment: look the company up, read the review base, confirm who sends the wire.
- 4
What is my total payback, in dollars?
The one number no compensation structure can hide inside. If it is hard to get in writing, that is the finding.
Our own answer to the first question, for the record: we fund from our own capital, your file is read in-house by the people who will live with the outcome, and one application means one advisor — we do not resell your file or circulate it to a panel. If your business runs $250,000 or more a year in revenue and has a year behind it, that is a short conversation to start.
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Frequently asked questions
How much does a merchant cash advance broker charge?
There is no standard schedule. Compensation is quoted in points — one percent of the funded amount per point — and the honest answer is always deal-specific. Rather than asking for a percentage, ask for the figure in dollars and who pays it, then check the total payback on the offer.
Do I pay the broker, or does the funder?
Either, or both. A funder-paid commission is recovered in the economics of the deal you are offered, and a borrower-paid fee is charged to you directly. The distinction changes where the cost appears, not whether it exists — it always travels through your transaction.
Should I ever pay a broker fee before funding?
Treat any fee due before a deal has actually funded as a signal to stop and verify: look the company up with your state's Secretary of State, check the review base, and confirm that the entity you would sign with is one you can identify. A legitimate placement fee is tied to a funded deal.
Does Express Capital charge broker fees or points?
When you apply with us directly, no. We are a direct funder: your application comes to us, is underwritten in-house, and is funded from our own capital, so no placement commission rides on the file — and your information is not circulated to a panel of third parties.
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Published by Express Capital Funding, a direct lender to U.S. small and mid-sized businesses. This article is general information, not financial, legal, or tax advice, and is not an offer or commitment to lend.
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