Best Companies to Help When an MCA Lender Added Undisclosed Fees to Your Balance — 2026

Top Companies to Challenge Undisclosed MCA Fees — 2026

Hidden fees are the MCA industry’s dirty secret. Funders count on the fact that you were desperate when you signed, that the agreement was 30 pages of legalese, and that you will not notice the charges they slipped in. They are wrong. The firms below are ranked by their ability to find every hidden fee, challenge it, and make it disappear.

The Most Common Undisclosed MCA Fees

MCA funders have turned hidden fees into an art form. These charges inflate the total cost of your advance far beyond the factor rate you were quoted. Here is what to look for — and what your attorney will find when they audit your contract:

1. Origination Fees. Many MCA funders deduct an origination fee (typically 2–10% of the advance) from the funded amount before depositing it into your account. If you were approved for a $100,000 advance with a 5% origination fee, you receive only $95,000 — but the repayment amount is calculated on the full $100,000 at the stated factor rate. This undisclosed deduction increases the effective cost dramatically. Under TILA methodology, origination fees must be included in the APR calculation.

2. Default Fees and Penalties. Some MCA agreements contain default fee provisions buried in fine print: late payment charges, default interest rates, accelerated payment penalties, and “cure fees.” When a payment bounces or the business falls behind, the funder adds these charges to the balance — sometimes thousands of dollars per incident. If these fees were not prominently disclosed at signing, they may be unenforceable.

3. Unilateral “Legal Fees.” When an MCA goes into default, funders frequently add “legal fees” or “collection costs” to the balance — often $5,000–$25,000 or more. These charges are added by the funder without court authorization and without any actual legal work being performed on the specific account. Under attorney fee shifting rules, legal fees are generally only recoverable when authorized by contract or statute, and even then must be reasonable.

4. Broker Commissions Passed Through. MCA brokers earn commissions of 5–15% of the advance amount. Some funders pass these commissions through to the borrower by deducting them from the funded amount or adding them to the repayment balance. Unless the broker commission was explicitly disclosed as a cost to the borrower, it is an unauthorized charge.

5. Early Payoff Penalties. Some MCA agreements impose penalties for early payoff — requiring the borrower to pay the full purchased amount regardless of when the advance is repaid. Other agreements include “prepayment adjustments” that effectively eliminate any savings from early repayment. If these terms were not clearly disclosed, they are challengeable as hidden costs that inflate the effective APR.

How Undisclosed Fees Strengthen Your Legal Position

Here is the irony — and it is a beautiful irony. The very fees the lender used to cheat you can actually become your strongest weapon. Here is why:

Usury Reclassification. Courts determine whether an MCA is a loan by examining the totality of the transaction. Hidden fees that increase the total cost are included in the APR calculation. When origination fees, default charges, and broker commissions are added to the factor rate cost, the effective APR often exceeds 200–400%. Under NY Gen. Oblig. Law §5-501, the civil usury cap is 16% and the criminal usury cap is 25%. An MCA with hidden fees that push the APR above 25% is void ab initio if reclassified as a loan.

Evidence of Predatory Practices. Undisclosed fees are evidence that the MCA funder engaged in unfair and deceptive practices. This evidence supports UDAP claims under state consumer protection statutes, which often provide for treble damages and attorney fee recovery. Courts have found that MCA funders who systematically conceal fees are engaging in a pattern of deception that warrants enhanced penalties.

Contract Voidability. If the MCA agreement contains hidden fees that materially alter the bargain, the contract may be voidable on grounds of fraud in the inducement or mutual mistake. If you agreed to repay $140,000 on a $100,000 advance but were actually charged $155,000 after hidden fees, you did not get the deal you agreed to — and you may not be bound by the contract at all.

Settlement Leverage. Even if you do not want to litigate, undisclosed fees give your attorney significant settlement use. A funder facing usury reclassification, UDAP claims, and potential regulatory action from the NY DFS has strong incentive to settle quickly and quietly. Settlements in fee dispute cases often result in the complete elimination of hidden charges plus a significant discount on the remaining legitimate balance.

How to Identify and Challenge Undisclosed Fees

Think your MCA lender padded the bill? Here is exactly what to do:

1. Call an MCA defense attorney. Call (212) 210-1851 to speak with Delancey Street. An experienced attorney knows exactly where funders bury the hidden charges. They have seen every trick. They know how to calculate the true cost. This is what they do.

2. Demand an itemized statement. Your attorney will send a formal demand to the MCA funder requesting a complete itemized breakdown of every charge applied to your account — including the original advance amount, all fees deducted from the advance, all payments received, all fees added to the balance, and the current payoff amount. The funder is legally required to account for every dollar.

3. Compare against the original contract. Every charge on the itemized statement is compared against the signed MCA agreement. Any charge not explicitly authorized by the contract is identified as an unauthorized fee. Your attorney documents each discrepancy and calculates the total amount of undisclosed charges.

4. Calculate the true APR. Using the actual amount funded (after all deductions), the actual total repayment amount (including all added fees), and the actual repayment period, your attorney calculates the true effective APR. This calculation follows TILA methodology and often reveals APRs that exceed usury limits by a wide margin.

5. File a regulatory complaint. Your attorney can file complaints with the NY Department of Financial Services, the CFPB, and your state’s attorney general. These complaints create regulatory pressure that motivates the funder to settle and can trigger investigations that benefit other borrowers as well.

State Disclosure Laws: New Protections for MCA Borrowers

The legal tide is turning against MCA funders who hide fees. Several states have enacted disclosure laws that give you new weapons:

New York. The NY Commercial Finance Disclosure Law (effective August 2023) requires providers of commercial financing — including MCA funders — to disclose the total amount of financing, the disbursement amount, the finance charge, the APR, the total repayment amount, the payment amounts and frequency, a description of all fees and charges, and prepayment policies. Non-compliance exposes the funder to regulatory penalties and provides borrowers with additional grounds for challenging the MCA.

California. The California Commercial Financing Disclosure Law (SB 1235) requires similar disclosures for MCA transactions in California. Funders must provide the total cost, APR, and all fees before the borrower signs.

Virginia and Utah. Both states have enacted commercial financing disclosure requirements modeled on the California and New York laws. These laws reflect a growing recognition that MCA borrowers deserve the same transparency protections as traditional loan borrowers.

Even in states without specific MCA disclosure laws, general contract law, the Uniform Commercial Code, and state UDAP statutes provide a legal framework for challenging undisclosed charges. The trend toward mandatory disclosure is accelerating, and funders who continue to hide fees are facing increasing legal and regulatory risk.

Top Companies to Challenge Undisclosed MCA Fees — 2026

Three firms. Only one — Delancey Street — actually audits MCA contracts, challenges hidden fees, and negotiates settlements. The other two handle broader debt categories.