Most merchants who get a merchant cash advance have no idea whether they are working with the actual funding company or a middleman broker. That distinction is costing them thousands of dollars on every deal — and nobody is telling them.
This guide explains exactly what a direct lender is, how brokers mark up your offers, and how to access direct lenders without the markup.
A direct MCA lender is a company that funds advances using its own capital. They underwrite your file, make the decision, and send you the money directly. There is no middleman.
A broker is a middleman who collects your information, shops it to multiple lenders, and presents you with offers. Brokers earn their income by adding a commission on top of the lender's actual rate — which you pay without knowing it.
| Category | Direct Lender | Broker |
|---|---|---|
| Who funds the advance | They do — it's their money | A lender behind the scenes |
| Who sets the factor rate | They do — based on your risk | Lender sets base rate; broker marks it up |
| Commission built in | No | Yes — typically 3% to 10% of the advance |
| Who you talk to | The funder directly | The broker — you may never meet the funder |
| Speed | Faster — one decision maker | Slower — depends on lender response time |
| Transparency | High — you see the real offer | Low — markup is hidden in the factor rate |
Here is how the markup works in practice. A lender underwrites your file and determines you qualify at a 1.25 factor rate. They communicate this to the broker. The broker adds their commission — typically 5 to 10 points — and presents your offer at 1.32 or 1.35.
You see 1.35. You never see 1.25. You never know the difference existed.
| Advance Amount | Lender's Real Rate | Broker Markup | What You See | Extra Cost to You |
|---|---|---|---|---|
| $50,000 | 1.25 | +0.08 | 1.33 | $4,000 |
| $100,000 | 1.22 | +0.10 | 1.32 | $10,000 |
| $150,000 | 1.20 | +0.12 | 1.32 | $18,000 |
On a $100,000 advance, a broker markup of just 10 points costs you $10,000 extra. That money goes to the broker. The lender gets paid. You pay more. And nobody told you.
Ask one question directly: "Are you the funding company, or are you a broker placing my file with lenders?"
A direct lender will tell you they are the funder. A broker will often say they "work with many lenders" or deflect the question entirely. Ask it in writing — email or text — so you have a record of the answer.
Other signs you are working with a broker and not a direct lender:
Going direct sounds like the obvious solution — but most direct lenders only offer their own products. If their rates are not competitive for your profile, you have no comparison. You either take their offer or start over somewhere else.
The best setup is access to multiple direct lenders competing for your business — without a broker's markup sitting between you and the actual offers.
That is exactly what AI MCA Exchange does. Our AI underwrites your file and sends it directly to matched lenders in our network. You see real offers from real funders — no broker layer, no markup, no hidden commission. The factor rate you see is the factor rate the lender actually quoted.
Upload 3 months of bank statements and receive real offers from our lender network. Every number is exactly what the lender quoted — no markup, no commission layer, no hidden fees.
Apply Free at mcaexchange.ai