Broker, lender or marketplace: three different things

Most owners searching for a funding company are really choosing between three business models, and the difference decides who is accountable when something goes wrong.

None of the three is inherently better. A direct lender is simplest when you already know the product you want and qualify for it. A marketplace shows breadth quickly. A broker earns its place when the file is complicated — poor credit, several open positions, an unusual industry — because someone is arguing your case rather than forwarding your form. RAN Funding is a broker; that is a disclosure, not a claim of superiority.

How the person advising you gets paid

This is the first question to ask, and the answer should be immediate and specific. Brokers are paid a commission by the funder that closes your deal, which creates an obvious tension: the funder paying the most is not always the funder that suits you best.

What to listen for:

• Is the commission disclosed? “The funder pays us” is an answer. “We don’t charge you anything” is a deflection — the cost is inside your factor rate either way.
• Does it change what I am quoted? At RAN Funding it does not, and you should expect any broker to say the same in writing.
• Are there fees payable by me? Origination, processing or payoff fees should be stated in dollars on the term sheet, before signing. An advance fee demanded before funding is a well-known fraud pattern.
• Am I being sold one product, or shown several? An adviser who only ever recommends the same product is a salesperson for that product.

Eight questions that separate a good funding partner from a bad one

• What is the total dollar cost, not the rate? Total repayment minus amount funded. One number, in dollars.
• What is the payment, how often, and is it fixed or a percentage of sales? A fixed daily debit behaves very differently from a percentage holdback in a slow week.
• Is there a personal guarantee, and who signs it?
• Will a UCC-1 be filed, and on what? It affects your ability to borrow again.
• Is there an early payoff discount? With a factor rate, the total is fixed unless the agreement says otherwise.
• What happens if revenue drops? Ask whether a reduction can be requested, and what evidence is needed.
• Can I take other financing while this is running? Most agreements restrict it. Know before, not after.
• Who is my point of contact after funding? A name and a direct line, not a general inbox.

Any provider worth working with answers all eight without hesitating. Hesitation on the first one is the whole answer.

Red flags, and why they matter

• A confession of judgment. A clause letting the funder obtain a judgment without notice or a hearing. The FTC won a $20.3 million judgment in February 2024 against a merchant cash advance operator over misrepresented funding and collection amounts, unauthorised account withdrawals, and the use of confessions of judgment to seize assets.¹ Earlier FTC action in 2022 banned another operator and its owner from the industry entirely.² If a confession of judgment is in front of you, stop.
• Numbers that move between the term sheet and the contract. The amount funded and the total repayment should be identical in both. Compare them line by line.
• A fee demanded before funding. Legitimate fees are deducted at funding or disclosed on the term sheet, not wired in advance.
• Pressure to sign today. A real offer survives a night’s sleep. Urgency is a sales technique, not an underwriting constraint.
• No written cost disclosure. A growing number of states now require providers to give you the amount financed, the total repayment and the payment schedule in writing before you sign.³ Our guide to MCA disclosure laws by state sets out what yours requires.
• Unsolicited calls after you applied somewhere else. If your application was distributed, expect a flood. That is a sign of how your data is being handled.
• Encouragement to stack. An adviser pushing a second or third advance on top of existing ones is optimising their commission, not your cash flow. If you are already stacked, read merchant cash advance consolidation instead.

How to verify a company in ten minutes

• Check the FTC. Search the company name at ftc.gov. Enforcement actions are public.
• Check your state regulator. Several states now license or register commercial financing providers and brokers.
• Check the Better Business Bureau for the rating and, more usefully, the pattern of complaints and how they were answered.
• Read the one-star reviews, not the five-star ones. Look for repeated themes: surprise fees, unreachable contacts, debits that did not stop after payoff.
• Confirm a physical address and a named person. Then call the number on the website and ask for them.
• Ask for a sample agreement before you apply. A provider confident in its terms will send one.

What the data says about borrower experience

Two findings from the Federal Reserve’s 2025 Small Business Credit Survey are worth carrying into any conversation with a funding company. Only 42 per cent of applicants received the full amount of financing they sought, so a partial approval is a normal outcome rather than a sign you were treated badly. And 60 per cent of firms that borrowed from online lenders reported higher-than-expected costs, against 32 per cent of large-bank borrowers.⁴

That second number is mostly a disclosure gap rather than a pricing conspiracy: owners compared a factor rate to an interest rate and assumed they were the same kind of number. They are not, and factor rate vs APR shows the arithmetic. Insisting on the total dollar cost closes the gap before you sign, whoever you work with.

How RAN Funding works, stated plainly

We are a business financing broker headquartered in Pembroke Pines, Florida, funding businesses in all 50 states. We are not a lender, a law firm or a financial adviser.

• One application reaches our funder network; you are not distributed to dozens of callers.
• A named specialist owns your file from application to funding and afterwards.
• Our compensation is paid by the funder and disclosed to you. It does not change the terms you are quoted.
• Every offer comes back with the amount funded, the total repayment and the payment schedule side by side, before anything is signed.
• We say who a product is wrong for. Our editorial standards commit us to that on every page of this site.
• We place buyouts and refinances, and we do not place reverse consolidations.

Whether you work with us or with someone else, take the eight questions above into the conversation. A funding partner who welcomes them is the one worth having.