Industry Lies

It isn’t. It’s the best rate the broker gets the highest commission on. Brokers are paid a percentage of the funded amount — often 8–15% of what you borrow. The higher the factor rate, the bigger their check. Always get a second opinion before signing anything.

Not with a Merchant Cash Advance. Factor rates mean you owe the full payback amount regardless of when you pay. A 1.35 factor on $100K = $135K owed. Pay it off in 30 days or 300 days — you still owe $135K. Early payoff saves you nothing on most MCA products.

“Direct lender” is one of the most misused phrases in the industry. If they’re submitting your file to multiple funders, they’re a broker — regardless of what they call themselves. Ask directly: “Will my file go to one funder or multiple?” and get the answer in writing.

Artificial urgency is a sales tactic, not a real deadline. Any legitimate offer can withstand a 24-hour review. If they won’t give you time to think, read, or get a second opinion — walk away. The urgency is designed to stop you from finding out you have better options.

Nothing is guaranteed until money is in your account. Pre-approvals, soft approvals, and conditional approvals are NOT approvals. They’re marketing tools used to get you engaged and emotionally committed before underwriting reveals the real terms. Assume nothing until you see the wire.

Some products require a hard pull. Some UCC filings affect your commercial credit profile. Some stacked positions trigger flags on every future application. Always ask specifically — in writing — which credit bureaus are pulled and what lien filings will be made.

Stacking MCA positions is one of the fastest ways to destroy a business. Multiple daily debits signal financial desperation to every future lender and make approvals nearly impossible. The broker telling you stacking is “normal” earns a commission every time you add a position.

The daily number is designed to sound small and digestible. What they don’t tell you: the total payback, the factor rate, or what that equates to in real annualized interest. A $500/day debit sounds manageable. When you do the math — $500 × 250 days = $125,000 on a $90,000 advance — it doesn’t.

This is the renewal trap. Renewing an MCA before it’s paid off means you’re paying a factor rate on money you’ve already repaid. If you took $100K, paid back $60K, and renew for another $100K — you just paid a factor rate on $60K you no longer owe. Serial renewals are how businesses end up with 4 MCAs and no runway.

Maybe. Maybe not. Ask for verifiable references, documented case studies, and proof of outcomes. Marketing claims without specifics are just noise. A company that’s actually helped thousands will have no problem showing you evidence.

Never. Confession of Judgment clauses, personal guarantees, and blanket UCC liens are buried in “standard” paperwork. A COJ clause means a lender can obtain a judgment against you without notice or a court hearing. Read everything or have someone who knows what they’re looking at read it for you.

This is the most dangerous lie because it’s designed to eliminate comparison shopping. There are 18+ legitimate funding products available to most businesses. You may not qualify for everything — but you almost certainly have more options than one. Anyone who tells you otherwise is protecting their commission, not your business.

Revenue is only one factor. Time in business, credit score, bank statement health, industry type, existing liens, and current positions all matter. A number thrown out before underwriting is a bait figure — not a real offer. It gets you emotionally invested before the real terms appear.

Most brokers are paid by the lender — often a percentage of the total funded amount. Their financial incentive is to get you to take the largest amount at the highest factor rate. Ask every funding company exactly how they get paid — and from whom.

Sometimes that’s true. Often it isn’t. The honest answer depends entirely on your situation, timeline, cost of capital tolerance, and what you actually qualify for. Anyone who tells you a high-cost product is “better” without knowing all of that is selling — not advising.