Freight Broker MCA Debt: 6 Questions About Carrier Payments and Financial Security

A merchant cash advance is a bad match for a freight broker because of how it gets repaid. As a freight broker, your MCA will typically be repaid through a daily debit from your business bank account based on your gross billings. Freight brokers often operate on thin margins, and these daily debits can eat into the money meant for paying carriers. What happens then is a patch of unpaid carriers leads to claims on your $75,000 bond. Since January 16, 2026, any drawdown on your bond not replenished within seven days can suspend your freight-broker authority. So pay carriers first.

Your Freight-broker Authority

The MCA lender can’t directly repo your freight-broker authority. To keep your authority, you’re required to obtain a $75,000 surety bond, or a BMC-85 trust. And to keep your bond, you must pay carriers. A freight broker registration stays valid only while the bond or trust is in effect.

When carriers invoice a broker and don’t get paid, they can file a claim for payment. At that point, you have seven business days to answer the claim. If you don’t, the bond company may pay the carrier and then try to recover the money from you.

If your bond drops below $75,000, the surety is supposed to tell FMCSA about it within two business days. FMCSA will then send you a letter. From the date of that letter, you have seven business days to show the drawdown was a mistake, to get the bond amount restored to $75,000, or to show you paid the claims without bond money.

When Your MCA Lender Takes Daily Payments

As a freight broker, you manage the freight for clients who hire you to arrange for the shipping of their goods. After the carriers deliver the goods, the shipper is sent an invoice for payment. This money pays off the carrier who did the work, and the broker keeps the rest. When your MCA lender takes daily payments, they often use your gross deposits to calculate the payment.

If the shipper pays $3,000 for a load, the carrier gets $2,600 and the freight broker might keep $400 for a margin of about 13%. With many MCAs, the funder may count the entire $3,000 as revenue for their daily debit to the broker, which can end up consuming most of the net revenue left for the freight broker.

Shippers often pay 30 to 60 days after they receive the invoice, but the carrier expects payment in days. MCA repayment schedules are often daily, so the loan will get paid but the carrier may not. One large shipper paying two weeks late can leave your account short on the carrier payment run even when the month looks fine on paper. Keep records of when shippers pay. That shows timing, not a refusal to pay.

The MCA lender can send notice to your shippers to make payment to the funder instead of your company, which can complicate your cash flow. After receiving this notice, shippers can’t discharge their bills by paying the freight broker. A factoring company can also send its own notice. If so, the shipper may withhold payment. Meanwhile, if carriers aren’t getting paid, they can put claims on your surety bond.

A letter of notice to accounts payable at your biggest shipper can damage a relationship it took years to build. If shippers hold payments to your business, it means carriers may not get paid. Get ahead of any letters from your funders before they arrive. An attorney can sort out conflicting notices from factoring companies and MCAs.

An MCA can be a problem if you factor your invoices. The MCA funders may claim the same receipts as the factoring company. If so, it may mean the factor that filed first has priority. Then the factor may stop advancing you money, raise your reserves, or demand you repurchase your factored receivables, which can leave you unable to pay carriers. Tell your attorney the whole story before you contact either the factor or the MCA lender.

If You’re Already in Trouble

If your MCA lender has a clause that lets you adjust for lower payments if your billings fall, use it. To get that help, follow the MCA’s procedures precisely, so they can’t argue you failed to do so. At a minimum, you must keep three years of documentation on each of your loads: the amount of the charge collected, and the date you paid the carrier. Load records plus TMS reports and aging reports can document a drop in receipts, load by load. Always keep a dated log of the date you requested an adjustment, the response you received, and each debit that continued after the request.

With several funders debiting the account, but the brokerage still having a viable book of business, reorganization may be worth evaluating. Filing triggers the automatic stay, which generally halts lawsuits, levies and debits. Subchapter V is a streamlined reorganization for small businesses.

Filing bankruptcy under Title 11 is not by itself broker financial failure under FMCSA regs. But unpaid carriers can still drain your bond, so plan your cash flow for carrier payments and bond before filing.

If you are found in financial failure, the surety has to start cancelling its bond or trust with FMCSA. The feds will post that fact in the FMCSA Register, and carriers then get 60 days to make their claims.

You and your cofounders might have signed a surety general indemnity agreement in connection with obtaining your $75,000 bond. Under that agreement, the surety might have a right to seek repayment from your company, and from each of you personally, if the bond pays carrier claims. Go over that document with your lawyer alongside your MCA personal guarantee.

Taking another advance to cover carrier payments often makes it worse. Many MCAs specifically prohibit you from getting more financing. If you do, it can trigger default under your first MCA. And then each new funder will start taking a daily cut out of your incoming receipts, and now your margins are stretched thinner than before.

Request an account reconciliation. And before you try to renegotiate with a factor or MCA lender, talk to an attorney.