# MCA ISO Commission: Points, Upsell and Clawbacks

- Author: TrueBankFlow (https://www.truebankflow.com)
- Published: 2026-09-12
- Updated: 2026-09-12
- Category: MCA deals and funding
- Canonical: https://www.truebankflow.com/blog/mca-iso-commission

> How MCA ISO commission is paid on funded deals: points on the advance, upsell above the buy rate and clawbacks when a merchant defaults early.
MCA ISO commission is the fee a funder pays the independent sales organization that brought in a funded merchant cash advance. It is usually a number of points on the advance amount, plus extra when the ISO sells above the funder's buy rate. The ISO agreement decides when the funder can take that commission back.

## How is MCA ISO commission calculated on a funded advance?

MCA ISO commission is usually calculated as points on the funded amount, where one point is one percent of the advance. The funder pays once the deal funds, not when the merchant signs, so a deal that falls through before funding pays nothing.

The base matters. Most agreements measure points on the purchase price, the cash the merchant receives before fees, rather than on the total payback amount. A few measure on payback, which raises the figure for the same deal. Read which one your agreement uses before comparing offers from two funders.

The point count itself is set by the funder's ISO schedule. It often depends on the factor rate the ISO sells, the term and the merchant's risk tier. Some funders also pay a smaller share on deals they price themselves, or nothing on a deal where the merchant came to them directly first.

## Buy rate, sell rate and the ISO commission upsell

The buy rate is the lowest factor rate a funder will accept on a deal, and the sell rate is the factor rate the ISO actually quotes the merchant. When the ISO sells above the buy rate, the extra payback becomes upsell, and the funder shares it with the ISO under its schedule.

Upsell makes the merchant's cost the ISO's lever. A higher sell rate means more commission and a larger daily payment, which can push the account past what it can bear. Funders cap the sell rate for that reason, and some cut points when upsell is high so the total pay stays inside a band. Pricing basics, including how a factor rate turns into payback, are in [how funders price an advance with a factor rate](/blog/mca-factor-rate).

### A worked example

Every figure here is an example. Real point schedules, buy rates and upsell shares vary by funder and by deal.

| Item | Example value |
| --- | --- |
| Advance (purchase price) | $40,000 |
| Funder's buy rate | 1.30 |
| ISO's sell rate | 1.38 |
| Payback at buy rate | $52,000 |
| Payback at sell rate | $55,200 |
| Base points | 8 points = $3,200 |
| Upsell above buy rate | $3,200 of extra payback |
| ISO share of upsell (example: half) | $1,600 |
| Total commission at funding | $4,800 |

The merchant here pays $3,200 more over the term because of the upsell, and the ISO's check grows by half. Whether that trade is fair to the merchant is a question the ISO should ask before quoting.

## ISO commission on renewals and add-on advances

ISO commission on renewals depends on the agreement. Many funders pay the original ISO again when the same merchant renews, often at a lower point count, since the funder already holds the relationship. Others pay only if the ISO submits the renewal itself within a set window.

Renewals often pay off the open balance from the new advance. If commission is measured on the full new purchase price, the ISO earns on money that only refinances the old balance. Some funders measure only the net new cash for that reason. Check this term, since it changes the value of a merchant book over time.

House accounts are a second trap. A funder that keeps renewals in-house after the first deal can stop paying the ISO entirely. An agreement that names the ISO's rights to renewals for a stated period protects the ISO's book.

## When does a funder claw back ISO commission?

A funder claws back ISO commission when the merchant defaults, stops paying or the deal unwinds within a window the ISO agreement names, often the first few payments or months. The clawback is usually all of the commission or a share that falls as more of the payback is collected.

Common triggers include:

- **Early default.** The merchant stops paying, closes the account or blocks debits inside the window. The terms and stages of a default are covered in [what happens when a merchant cash advance defaults](/blog/merchant-cash-advance-default).
- **Reconciliation that cuts collections.** When a merchant asks to reduce payments to match lower sales, some agreements treat a large cut early on as a clawback event. How that reduction works is set out in [the MCA reconciliation clause](/blog/mca-reconciliation-clause).
- **Fraud or misrepresentation.** Altered statements or hidden positions in the submission usually trigger a full clawback, with no time limit.
- **Early payoff with a discount.** Some agreements reduce commission when the merchant pays off early at a discount, since the funder collects less.

Funders often take clawbacks out of the ISO's next commission checks instead of billing them, so a bad month for one deal shows up on unrelated ones.

## ISO commission terms to read before signing an ISO agreement

ISO commission terms that decide what the ISO keeps are the base used for points, the upsell share, the clawback window and triggers, renewal rights and the payment timing. Read each one before sending the first deal, because they are hard to change after a book is built.

A short review list for an ISO agreement:

1. **Commission base.** Purchase price, payback or net new cash.
2. **Upsell share and caps.** The share paid and the highest sell rate allowed.
3. **Clawback window.** How long it runs and whether the share falls over time.
4. **Renewal rights.** Whether the ISO is paid on renewals and for how long.
5. **Offset rights.** Whether clawbacks come out of future checks.
6. **Data duties.** ISOs handle merchants' bank statements and IDs, so the agreement should say how that data is stored and shared. Lenders' privacy obligations are outlined in [what a GLBA privacy notice must say](/blog/glba-privacy-notice).

Clean files help the ISO keep what it earns. A submission whose deposits and debits are already totaled, with every figure traceable to a statement line, gives the funder fewer reasons to question it later. That is the kind of summary [TrueBankFlow](/get-started) builds from a merchant's statements.