8 Questions to Ask a Business Funding Broker Before You Sign Anything

Most business owners spend more time vetting a new hire than vetting the broker who controls which lender sees their financials. That's a problem. The Federal Reserve's 2025 Small Business Credit Survey found that 60% of businesses that borrowed from online lenders reported their actual costs came in higher than expected — the highest surprise-cost rate of any lender category tracked. A broker who's working for their commission, not your cash flow, is often the reason why. Here are the eight questions that separate honest brokers from deal-churners — and what their answers should sound like.

Why the broker interview matters more than the lender pitch

A broker controls what you see. They decide which funders get your bank statements, which offers to present, and how to frame each deal. An honest broker narrows your cost and surfaces your best options. A churner narrows your options and maximizes their payout. Knowing which one you're dealing with before you sign is the entire game.

Here's the structural problem: MCA broker commissions can reach up to 11% of the advance amount, and that commission is typically built into a higher factor rate — not listed as a line item you'll ever see. On a $150,000 advance, that's up to $16,500 quietly added to what you repay, with no disclosure required in most states. [Fed SBCS 2025, SoFi/SMB Compass MCA data]

FynFund's position: we connect you with 100+ funders and show you multiple offers side by side. Our job is done when you pick the right deal, not the highest-commission one. That's why we're telling you exactly what to ask us — and every other broker you talk to.

The 8 questions to ask before you hand over a single bank statement

1. How many lenders did you actually shop my deal with?
2. What is your commission on this specific offer?
3. Will you show me the other offers you received — not just the one you're presenting?
4. Is your commission the same across all the offers, or does it vary by lender?
5. Does this deal include a UCC lien, and if so, which assets does it cover?
6. What happens to my deal if I have existing MCA positions — will stacking hurt my rate?
7. Are you required to give me a written disclosure of costs before I sign?
8. What does this deal cost me in total dollars — not just a factor rate?

Question 1: How many lenders did you shop?

A legitimate marketplace broker shops your deal to multiple funders before presenting. The honest answer is a specific number — '14 funders,' '22 funders,' something concrete. If the answer is vague ('several,' 'our network'), or if they present only one offer immediately, you are likely talking to a direct funder's sales rep dressed up as a broker, or a single-ISO shop with limited reach.

Why it matters: the Federal Reserve's 2025 Small Business Credit Survey found that applicants who sought financing at small banks were fully approved 57% of the time — compared to much lower rates elsewhere. The principle applies to alt-lending too: more funders competing for your deal almost always produces better terms. A broker with access to a wide network is genuinely worth more to you. [Fed SBCS 2026 Report]

Question 2: What is your commission — and does it vary by lender?

This is the question most brokers hope you never ask. MCA broker commissions range from roughly 1% to 11% of the funded amount, and they are almost never disclosed upfront unless state law requires it. The commission is embedded in your factor rate, meaning a broker who earns 8% on one funder's deal and 3% on another has a strong incentive to steer you toward the more expensive option.

The math is unambiguous. On a $100,000 advance at a 1.30 factor rate, you repay $130,000 — a $30,000 cost, paid via roughly $500 per business day over 6 months. If a broker's 8% commission inflated that factor rate by even 0.05, you're paying an extra $5,000 over the life of that deal with no idea it happened. Ask the number directly. A broker who won't answer has answered. [Value Capital Funding MCA fee analysis; DailyFunder ISO commission data]

Question 3: Will you show me all the offers, not just the one you're pitching?

An honest broker has no reason to hide competing offers. A churner has every reason to. If a broker shopped 20 funders and only presents one offer, ask why the others were filtered out. Acceptable answers include: 'the other offers had higher factor rates,' 'two funders wanted a UCC on all assets and you said you wanted to avoid that,' 'this was the only one with same-day funding.' Vague answers — or flat refusal — are red flags.

The Federal Reserve's SBCS data shows borrower satisfaction with online lenders dropped from 15% net satisfaction in 2023 to just 2% in 2024 — the steepest decline of any lender category. Much of that dissatisfaction traces back to cost surprises that a transparent offer comparison would have prevented. [Fed SBCS 2025 Employer Firms Report]

Question 4: Does this deal include a UCC lien, and what does it cover?

Most MCA and short-term loan funders file a UCC-1 financing statement when they fund your deal. This is a public filing that tells other potential creditors you have an outstanding obligation. A blanket UCC lien covers all business assets — inventory, equipment, receivables, everything. A specific lien covers only named assets. The difference matters enormously if you need additional financing or if you ever want to sell the business.

What a broker should tell you proactively: which funders in your deal file blanket vs. specific liens, whether the lien gets released promptly on payoff, and whether any funder requires first-position lien rights. If they don't raise it, you raise it. Buried UCC liens are one of the most common ways a good deal quietly blocks your next one.

Question 5: What happens if I already have an existing MCA?

Stacking — taking a second or third MCA on top of an existing one — dramatically raises your factor rate and daily holdback burden. Some funders refuse to lend to stacked positions entirely. Others will lend, but at factor rates above 1.40, which translates to effective APRs that can exceed 150% when the repayment period is short. [Crestmont Capital 2026 MCA rate data]

An honest broker tells you this before they run your file. A churner runs your file first, gets approvals (at expensive stacked rates), and presents them as your only options. If you already have an open MCA position, ask the broker directly how each potential funder will treat that position, what the factor rate impact will be, and whether a consolidation or payoff first makes more financial sense than stacking.

Question 6: Are you required to show me a written cost disclosure before I sign?

Your rights depend on where your business operates. California's SB 1235 — now supplemented by SB 362 effective January 1, 2026 — requires funders to disclose total cost, payment frequency, term, and an estimated APR before you sign any commercial financing agreement. New York's Commercial Financing Disclosure Law has imposed similar requirements since August 2023. If you're in either state, a written disclosure is not optional — it's the law.

In most other states, no equivalent law exists. That means in the majority of the country, a funder can present your deal as a factor rate with no APR translation required. A broker who voluntarily converts your factor rate to an annualized cost equivalent — even where not legally required — is showing you something about their character. California SB 362 also now restricts using the word 'rate' in ways that could mislead borrowers, and requires re-disclosure of APR during the application process. [CA DFPI SB 1235; SB 362 effective Jan 1, 2026]

Question 7: What does this deal cost me in total dollars?

Factor rates sound small. They're not. A 1.30 factor rate on a $100,000 advance means you repay $130,000 — a $30,000 cost locked in from day one, regardless of how fast you pay. Factor rates between 1.20 and 1.40 are the most common range for established businesses in 2026, with rates above 1.40 reserved for higher-risk profiles or stacked positions. The number you need is the total dollar cost — not the factor rate, not the holdback percentage, the dollar amount leaving your account above what came in.

Ask for this in writing before you sign. A broker who can't or won't give you the total repayment amount, the daily or weekly payment, and the estimated payoff timeline is not protecting your interests. If you're paying a 15% daily holdback on $8,000 in daily card sales, that's $1,200 leaving your account every business day. Know that number before you decide. [Nav MCA guide 2026; attorney-newyork.com MCA cost analysis]

Question 8: Is an MCA actually the right product for my situation?

A broker worth trusting will sometimes tell you not to take the deal. MCAs carry effective APRs ranging from roughly 40% to over 300% depending on the factor rate and repayment speed. For a business using the capital for a high-return purpose — emergency equipment repair, a large inventory buy ahead of a proven seasonal spike — that cost can be justified. For covering routine operating expenses or servicing existing debt, it usually cannot.

When an MCA is the wrong call: you already have two open positions; your daily revenue is too volatile to sustain a fixed holdback; you're near the end of your fiscal year and expect a slow quarter; or you qualify for an SBA 7(a) loan. Per the Fed's 2025 SBCS, firms with 10 or more years in business had a 57% full-approval rate at small banks. If you have 5+ years of clean books, an SBA or conventional bank product will almost always be cheaper — and a good broker knows that and tells you. [Fed SBCS 2026 Report on Employer Firms]

• MCA is wrong for you if: you have 2+ open positions already (stacking risk is severe)
• MCA is wrong for you if: you're using it to cover another loan payment
• MCA is wrong for you if: you have 680+ personal credit and 5+ years in business — you likely qualify for cheaper money
• MCA is right for you if: you need capital in 24-48 hours for a time-sensitive, high-return purpose and bank speed won't work
• MCA is right for you if: your credit profile doesn't qualify for conventional options and the daily holdback fits your cash flow

The cheat sheet: what honest answers look like