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Renewal Commission Calculator

Project income from merchant renewals factoring in decay rates and portfolio aging.

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What Is MCA Renewal Commission?

Renewal commission is the fee earned when an existing merchant takes a new MCA position after paying down a significant portion (typically 50-70%) of their current advance. Renewals are the lifeblood of a mature brokerage because they require no new lead acquisition cost -- the merchant already trusts you and the funder already has payment history. However, renewal commissions are typically 2-5 points lower than new-deal commissions because the funder's underwriting cost is minimal. The decay rate accounts for merchants who do not renew -- they either paid off and do not need more capital, defaulted, or switched to a competitor. Tracking and projecting renewal income separately from new-deal income gives you a clearer picture of your recurring revenue base.

How to Use This Calculator

Count your renewal-eligible merchants

Review your portfolio for merchants who are 50-70% paid down on their current position. Most funders allow renewals at the 50-60% paydown mark. This is your renewal pipeline.

Set the renewal commission rate

Renewals typically pay 5-8% commission versus 8-12% on new deals. Some funders offer the same rate on renewals if volume is high. Check your specific funder agreements.

Estimate your decay rate

Decay represents merchants who leave the renewal cycle each month. Reasons include business closure, competitive poaching, graduation to bank lending, or choosing not to take additional capital. A 3-8% monthly decay rate is typical.

Key Concepts

Renewal Eligibility

The point at which a merchant can qualify for a new advance. Most funders require 50-70% paydown of the current RTR. Some offer "early renewals" at 40% paydown with adjusted terms.

Decay Rate

The monthly percentage of renewal-eligible merchants who do not actually renew. This shrinks your renewal pool over time and is the primary headwind against renewal income growth.

Renewal Upsell

When a renewal merchant qualifies for a larger amount than their previous advance due to improved processing history or business growth. Upsells increase your average renewal amount and commission.

Expert Insights

Renewals Are Your Highest-Margin Revenue: The cost of acquiring a new merchant through marketing and sales effort averages $500-$2,000. The cost of renewing an existing merchant is near zero -- a phone call or email. Even at a lower commission rate, the profit margin on renewals exceeds new deals by 3-5x. Top-performing brokerages generate 40-60% of their commission revenue from renewals.

Proactive Renewal Outreach Beats Waiting: Do not wait for merchants to call you when they need more capital. Set up alerts at the 50% paydown mark and reach out proactively. If you wait, the merchant may contact a competitor or the funder may renew them directly, cutting you out. A simple CRM reminder system for renewal-eligible merchants can increase your renewal capture rate by 30-50%.

Frequently Asked Questions

Industry data suggests 40-60% of successfully completed MCA merchants take a renewal. The rate is higher for businesses with seasonal cash flow needs (restaurants, retail, construction) and lower for businesses that used the advance for a one-time expense.

It depends on your funder agreement. Some funders credit the original broker of record for all renewals regardless of who initiates. Others only credit you if you actively submit the renewal. Clarify this with each funder -- it can represent thousands of dollars in passive income.

Yes, and they often do if a competitor offers better terms. This is called a "buyout" -- the new funder pays off the remaining RTR from the first position and provides additional capital. As the broker, you earn full new-deal commission on buyouts, which is higher than renewal commission. Some brokers strategically move merchants between funders to maximize commission.

Results are estimates for educational purposes only. Actual amounts may vary based on your specific financial situation, market conditions, and other factors. This calculator does not constitute financial advice.