What Fees Can Come With an MCA?
Beyond the factor rate, a merchant cash advance can carry an origination or underwriting fee taken out of the funding, ACH or bank fees, returned-payment fees, and default fees. Some are one-time, and some happen only if something goes wrong. Ask for a list of every fee in writing and add the ones taken at funding into your cost per dollar.
Which fees come with an MCA?
| Fee | When it's charged | Where it shows |
|---|---|---|
| Origination or underwriting | At funding, taken out of the money | Offer, contract, state disclosure |
| ACH or administrative | Per debit or monthly | Contract fee schedule |
| Returned payment | Each bounced debit | Contract |
| Default fee | After a default | Events of default section |
| Stacking or change fees | If you breach a covenant | Contract |
What does this look like with real numbers?
Say you're offered $30,000 at 1.35 with a $900 origination fee. You owe $40,500 but receive $29,100. Cost is $11,400, or about $0.39 per dollar received, not the $0.35 the factor suggests. See origination fee.
Where do fees hide?
- Taken out of the funding, so less cash reaches you than the contract amount.
- Added to each payment as a processing or ACH fee.
- Charged on events: a returned debit, a default, a bank account change.
- Built into the factor, as broker pay usually is.
Ask for a list of every fee with a dollar amount before you sign, and count the ones taken out of funding when you compare offers. In states with disclosure laws, the form lists finance charges and the amount you receive.
Are fees taken from the funding or added to the payback?
Most come out of the funding before it lands, so the deposit is smaller than the approved amount. Others get added to the payback or charged later, like a returned payment fee. Ask for the net funding figure in writing next to the total payback.
What should you ask the funder?
- Which fees come out of the funding?
- Is there a per-debit or monthly fee?
- What does a returned payment cost?
- What fees apply after a default?
Where can you check your own numbers?
The short version is in the Cost FAQ. To check the numbers on your own advance, use the factor rate calculator.
Want a second look at your advance?
Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.