MCA True Cost Calculator
ISO broker fees, origination fees, and other charges are deducted from your advance before you receive funds — but you still repay the full RTR. This calculator shows exactly how much those fees increase your effective APR, side by side with the factor-rate-only cost.
Required disclosure in CA, NY, and growing. Enter your deal terms to see the real numbers.
Advance & Term
The multiplier applied to the gross advance amount
Expected months to repay the full RTR
ISO / Broker Fees
Fees deducted from the advance upfront. The merchant receives less but repays the full RTR.
Direct fee charged by the broker to the merchant
Base APR
Factor rate only
52%
True APR
All fees included
59%
+7.0% APR from fees
You receive $72,500 but repay $101,250. The $2,500 in fees adds $2,500 to your true total cost compared to the stated factor rate.
Why Your Net Funded Amount Changes Everything
When you sign an MCA agreement for $75,000 at a 1.35 factor rate, your Right to Receive (RTR) is $101,250. That's the total you owe. What most merchants don't calculate is what happens when fees come out first.
If a $2,500 ISO broker fee and a $750 origination fee are deducted upfront, you receive $71,750 — but you still repay $101,250. The total cost of capital isn't $26,250 (the factor rate cost on $75,000). It's $29,500 on $71,750. That's an APR that's 12–15 percentage points higher than the factor rate alone implies.
This isn't hidden in fine print. It's a mathematical consequence of how fees interact with the advance structure — and it's exactly what the new state disclosure laws were designed to surface.
ISO Fees, Broker Fees, and Origination Fees: What's the Difference?
The MCA industry uses several terms for charges that reduce your net funded amount. They're economically the same thing, but labeled differently:
ISO Fee / Broker Fee
Charged by the ISO (broker) directly to the merchant. This is separate from the commission the funder pays the ISO. It represents additional broker revenue on top of the factor rate economics. Typical range: $500–$5,000+.
Origination Fee
Charged by the funder for processing and underwriting the advance. Similar to a loan origination fee. May also include admin, processing, or documentation fees. Typical range: $250–$1,500.
Professional Service Fee
A euphemism sometimes used by ISOs for what is functionally a broker fee. The label doesn't change the math: it reduces net funding and increases effective APR.
Stacking Fee / Risk Fee
Sometimes charged when a merchant has an existing MCA (stacking). Compensates the funder for the additional risk of being a subordinate position.
How to Calculate True All-In APR Including Fees
The formula has one key adjustment from the standard MCA APR calculation:
Notice that the RTR is calculated on the gross advance, not the net funded amount. The merchant received less, but owes the same. This asymmetry is the source of the fee multiplier effect: every dollar of fees costs more than one dollar of true expense, because it simultaneously reduces your principal and leaves your repayment unchanged.
A $1,000 fee on a $50,000 advance at 1.30 factor doesn't add $1,000 of cost. It adds approximately $1,300 of effective cost — the fee itself plus the proportional share of the factor rate applied to that fee amount.
MCA Disclosure Laws: What You're Owed Before You Sign
Several states now require MCA funders and brokers to disclose all fees and their impact on annualized cost before the merchant signs:
- ✓California: SB 1235 / SB 362 — full APR disclosure + fee itemization required. Enforced by DFPI.
- ✓New York: Commercial Financing Disclosure Law (Aug 2023) — estimated APR, all fees, RTR, prepayment terms.
- ✓Utah: Commercial Financing Registration and Disclosure Act — applicable to MCAs.
- ✓Virginia: Consumer and Commercial Finance Disclosure — covers commercial financing products.
- ✓Illinois / New Jersey: Added similar disclosure requirements in 2026.
- ✓Florida: Pending legislation as of 2026.
Regardless of your state, you should always request a full disclosure statement that includes: gross advance, all fees itemized, net funded amount, RTR, estimated APR, and prepayment policy before signing any MCA agreement.
Frequently Asked Questions
Can I negotiate ISO broker fees?
Yes. ISO fees are not fixed and are often negotiable, especially on larger advances. The broker's compensation from the funder (built into the factor rate) should be sufficient without an additional direct fee. If an ISO insists on a separate fee, ask them to show you the equivalent deal from a direct lender. FundScout works with lenders who do not layer undisclosed fees on top of published factor rates.
If fees are deducted upfront, does that mean my loan amount is smaller for tax purposes?
MCA advances are not loans, so standard loan deduction rules don't apply. The fees and the factor rate cost may generally be deductible as business expenses, but the treatment depends on your accounting method and jurisdiction. Consult a CPA familiar with alternative financing — the tax treatment of MCAs is an evolving area.
What's a reasonable ISO fee as a percentage of the advance?
Industry norms vary, but ISOs charging direct fees typically land in the 1–4% range of the gross advance. A $2,500 fee on a $75,000 advance is 3.3% — within common range. Fees above 5% of the advance warrant a hard look at whether the broker is adding meaningful value or simply layering cost. At 8–10%, it's worth going direct or using a platform with fee transparency.
Does the RTR change if fees are added?
No. The RTR (Right to Receive) is typically defined in the MCA agreement as Advance Amount × Factor Rate, using the gross advance. The fees reduce what you receive, not what you owe. Always confirm the RTR calculation in your agreement — a reputable funder will show this clearly.
Related Tool
MCA APR Calculator
Just need to convert a factor rate to APR without fee modeling? Use the base MCA APR calculator — supports both fixed ACH and holdback repayment methods.
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This calculator provides estimated APR based on the simple disclosure method. It is for informational purposes only and does not constitute financial, legal, or tax advice. Actual costs depend on your specific MCA agreement terms. Always request a full itemized disclosure before signing.