The Number Matters Less Than When They Are Paid

What a merchant cash advance settlement company charges depends on which of four models it runs, and the model tells you more than the percentage does. The number is downstream of the structure. A firm that takes nothing until a settlement exists is making a different bet than one that bills you on the first of the month, and the bet is the whole story.

The Performance Model

The first model is performance-based, and it is the one Delancey Street runs. The firm is paid only when a settlement is reached, out of the value it produced, which means the owner pays nothing while the work is being done and shares in the savings only once the savings are real. The arithmetic of this model is honest in a specific way: a firm that eats every month of effort and is paid solely on results has staked its own cash on getting you a settlement, so its incentive and yours point the same direction. If it fails, it absorbs the loss.

The second model charges a percentage of the enrolled debt. The fee is calculated on the total balance you bring into the program, often a fixed share of it, and it is owed whether or not the funder ever agrees to a discount. An owner enrolling two hundred thousand dollars of advances can owe a meaningful sum measured against a number that has not moved yet. The percentage sounds like a contingency. Read the contract and it frequently is not.

A baker I worked with did the math at her counter, on the back of an order ticket, the way she priced a cake. The enrolled-debt fee came out higher than the discount the company had ever, in writing, promised to get her. She put the pen down.

The third model is the retainer. Money paid up front to begin the work, before a funder has conceded anything, gone whether the negotiation succeeds or stalls in its first week. The fourth is program fees, monthly charges that run for the life of the engagement, billed on a schedule rather than on a result, so that a long negotiation costs the owner more even when it produces less. Both of these front-load the company's pay. Both ask the owner, already bleeding from a daily debit, to fund the rescue before the rescue arrives.

Why The Upfront Models Misalign

The trouble with a fee owed before a settlement is not that it is large. It is that it severs the link between what the company earns and what the owner gets. A firm paid a retainer and monthly program fees is paid the same whether your balance falls by half or by nothing, which means its strongest incentive is to keep you enrolled, not to finish. A firm paid only on the settlement cannot get paid without producing one. I have written before that you can read a company by reading when it is paid, and nothing about merchant cash advance work has changed my mind. The summary fits in a sentence: structures that pay before the result reward enrollment, and structures that pay after the result reward the result.

So the honest answer to how much they charge is that it ranges, and the range is less revealing than the timing. Ask not only the percentage but the moment the meter starts, and ask what you owe if the negotiation fails outright. The first call with Delancey Street is a diagnosis, not a commitment, and it carries no fee at all, because a model that charges nothing until a settlement exists begins exactly where it says it does.

You ask: how much do they charge.

Beautiful that you ask. It means you are still awake enough to count. Most men, when they are drowning, they do not count. They grab. They grab the first hand that reaches into the water. And the hand pulls them deeper.

But still, it is the wrong question.

The right question is not how much do they charge. The right question is how much am I actually paying. These are not the same thing. They are not even cousins. One is the number printed on the agreement. The other is the number that shows up in your life six months later, when you cannot sleep, when the lien sits on your bank account like a stone on the chest.

So let me show you both. The seen price. And the unseen price. Because the companies, they want you to look only at the first one.

The Price They Show You

There is no single number. Anyone who tells you "it costs X" is either lazy or lying. The cost depends entirely on how they have decided to eat. And there are only a few ways they eat.

They take a slice of your total debt. You owe $200,000 across your advances. The company says: we charge 15 to 30 percent of that. So $30,000 to $60,000. And here is the trap, the beautiful ugly trap. They charge this whether they settle your debt for half, or whether they settle nothing at all. You pay them for enrolling. Not for winning. Think about this. A man who is paid the same for victory and for defeat... where is his hunger to win for you? Gone. He has already been fed.

They take a slice of what they save you. This is the other model, and it is a different animal entirely. You owe $200,000. They negotiate it down to $120,000. They saved you $80,000. They take a piece of that, usually somewhere between 20 and 35 percent. So $16,000 to $28,000. Now look closely. This man only eats when you eat. His hunger and your hunger are the same hunger. When he fights hard, he wins more, you win more. The incentives are married. This is the model you want to understand before any other, because the structure tells you the truth that the salesman's mouth will hide.

They take a flat fee. A fixed amount per advance, or a fixed amount per month while you are in the program. Clean, simple, predictable. But predictability cuts both ways. A flat monthly fee keeps charging whether the work is happening or not.

They take it upfront. And here, here I want you to stop. Pay attention.

Where The Thieves Live

The upfront fee. The advance fee. Money in their pocket before a single dollar of your debt has moved.

This is the bedroom of the predator. This is where they sleep.

Why? Because a man who has already been paid has no reason left to perform. He took your money for the promise. And a promise costs nothing to make. He can promise the sun, the moon, settlement of everything by spring, and if spring comes and nothing has settled, he has still eaten. You are out the fee and you still owe the debt. Two wounds for the price of one.

In consumer debt relief, charging fees before a settlement is delivered is largely forbidden by law. MCA debt is commercial, business-to-business, and it lives in murkier water. The same hard rules do not always reach it. The predators know this. They live in the murk on purpose. So when a company wants large money from you before they have settled anything, do not argue, do not negotiate, do not feel clever. Just walk. The door is right there. Use it.

The Price They Do Not Show You

Now we come to the real teaching. The unseen price.

A man calls three companies. One says 25 percent of savings. One says 20 percent. One, the cheapest, says 15 percent of total debt and a small monthly fee. The man, being a man, being a counter, chooses the cheapest. Naturally. Who would not?

This is how he dies.

Because the cheap company has a cheap method. And the cheap method in this industry is almost always the same method: stop paying, and wait. They tell you to halt your daily and weekly remittances. Stop the ACH pulls. Let the advances go into default. Then, they say, the funders will get scared, will come to the table, will accept pennies.

Sometimes this works. And sometimes, when you have signed a confession of judgment, which on most MCA contracts you have, the funder does not come to the table. The funder goes to the courthouse. They walk in with the confession you already signed, the one that let them skip the trial entirely, and they walk out with a judgment. Then comes the UCC lien. Then comes the frozen account. Then comes the levy that empties what little you had left.

So now do the arithmetic again, slowly.

The "cheap" 15 percent, it cost you the business. The "expensive" model that included actual legal defense, an attorney who could fight the confession of judgment, who could answer the lawsuit, who stood between you and the courthouse door, that one was the cheap one. You only could not see it, because the price was hidden in the protection, and protection is invisible until the day you need it. And on that day it is everything.

The lowest fee is very often the highest cost. Write this on your wall.

So What Should You Actually Pay For?

Not the smallest number. Stop looking at the smallest number. The smallest number is bait.

Pay for aligned incentive, a structure where they win only when you win, where their hunger and yours are one hunger. Percentage of savings, performance-based, nothing serious upfront. The structure itself should make it impossible for them to profit from doing nothing.

Pay for a real legal shield, not a "consultant," not a "negotiator" with a headset and a script, but actual attorneys who can stand in a courtroom, answer a complaint, fight a confession of judgment, defend against the lien. In MCA settlement, the thing that destroys businesses is rarely the negotiation. It is the lawsuit that the cheap company walked you straight into. The legal capability is not an add-on. It is the whole game.

Pay for clarity, a fee you can understand in one reading, with no upfront mystery, no vague "program costs," no number that changes when you ask twice.

The End Of It

You came asking how much do they charge.

You should leave asking who has arranged things so that they cannot win unless I win, and who will stand between me and the courthouse when the funder gets ugly.

The fee on the page is the cheapest part of the whole story. The expensive part is hidden, in the method, in the risk, in the lawsuit that the discount man never warned you about because warning you would have cost him the sale.

A man in a fire does not haggle over the price of the rope. He looks at whether the rope will hold.