How much does MCA settlement actually cost?
MCA settlement firms charge in three main ways: flat fees, percentage of total debt, and percentage of savings. Each has trade-offs. The number that actually matters is the total cost of resolution, not the headline rate.
The three main fee structures
Flat fee: a single agreed dollar amount, usually paid in installments tied to milestones (intake, agreement signed, settlement closed). Predictable and clean. Best when the case is straightforward.
Percentage of total debt: usually 12 to 25 percent of the original MCA balance. Easier for the firm to underwrite. Owners pay the same whether the firm settles for 50 percent or 30 percent of the balance, which can misalign incentives.
Percentage of savings: usually 20 to 35 percent of the difference between original balance and settled amount. Aligns the firm with the owner. Higher upside for both. Some firms blend this with a smaller flat retainer.
What 'cheap' actually costs you
The cheapest fee quote is rarely the cheapest total resolution. A firm that charges 10 percent up front but cannot defend a UCC freeze will cost you a separate litigation retainer when the funder escalates. A firm that quotes a low headline percentage but bills hourly post-signature can run far past the initial number.
Total cost of resolution = settlement firm fees + any referred-out legal fees + any per-funder add-ons + any post-engagement fees if the situation evolves. Ask for that number in writing before signing.
Red flags in fee disclosures
Watch for verbal-only fee discussions, separate retainers required for each funder, hourly billing on what should be a fixed-fee case, and 'success fees' that activate on outcomes you did not specifically authorize.
- No written fee schedule before contract
- Separate retainer per funder
- Hourly billing for routine settlement work
- Vague 'additional services may apply' clauses
- Fee tied to total debt rather than savings achieved
Get the total cost of resolution in writing, not the headline rate. The cheapest quote that requires a separate litigation retainer later is rarely the cheapest path to resolution.