“…On a $100,000 Merchant Cash Advance (MCA), a broker who sold the advance to their client (you) receives between 10% and 15% of the total amount funded. So your broker receives $10,000 to $15,000 (10% to 15% of the total “funding”) the day after you get “funded”…
Yes. That is not a typing or mathematical mistake on our end. We assure you of this. This is the reality of how grossly over-compensated your broker is for selling you a high-cost and very short-term business financing option. There is no way your broker delivered value to you and your business that justifies that high of a fee. That is 2.5 to 4 times the going rate for business loan brokering commissions…
· Why do Merchant Cash Advance (MCA) brokers charge such high fees for commissions?
The brief and simple answer is: Because the Merchant Cash Advance (MCA) companies pay your broker that much for convincing you, their client, to take Merchant Cash Advance (MCA) financing instead of exploring other lower-cost and longer-term financing options. It is a monetary incentive (commission) that is well-above the normal market rate for brokering business financing.
Merchant Cash Advance (MCA) companies compete with each other to pay out the highest commissions possible to entice brokers to send their client to them to get “funded”. This makes your cost-of-loan or cost-of-capital higher and higher as your broker is always chasing the highest commission payout which makes your financing much more expensive and frankly, unaffordable…