How to Sell ERC Tax Credits to Businesses: The Complete Guide for MCA Brokers

Why ERC Credits Are a Goldmine for MCA Brokers

If you're already selling merchant cash advances, you're sitting on the perfect client base for Employee Retention Credits (ERC). The businesses that need MCA funding — restaurants, retail stores, service companies — are exactly the same businesses that qualify for massive ERC refunds.

Here's the opportunity: ERC credits can be worth $5,000-$26,000 per employee for businesses that retained staff during COVID-19. A restaurant with 15 employees could be looking at $200,000+ in refunds. Your commission on that deal? Typically 20-30% of the credit amount.

The best part? You already have relationships with these business owners. They trust you. They know you understand their cash flow challenges. Instead of cold calling strangers about how to sell ERC tax credits to businesses, you're having consultative conversations with existing contacts.

Most MCA brokers are missing this completely. They're focused only on funding deals, leaving hundreds of thousands in ERC commissions on the table. The brokers who've figured this out are adding $50,000-$200,000+ annually to their income from the same client base.

Which Businesses Actually Qualify for ERC Credits?

Not every business qualifies for ERC, but the criteria are broader than most people think. You need to identify businesses that either experienced a significant decline in gross receipts OR were subject to a full or partial suspension due to COVID-19 government orders.

Revenue Decline Test

For 2020: 50% decline in gross receipts compared to the same quarter in 2019. For 2021: 20% decline compared to the same quarter in 2019. This is much easier to meet than most business owners realize.

Government Order Test

Any business that had to limit capacity, close dining rooms, cancel events, or modify operations due to government COVID orders qualifies. This includes restaurants that went takeout-only, gyms that had capacity restrictions, event venues that cancelled bookings.

Perfect ERC Prospects

• Restaurants and bars (especially those that lost dine-in revenue)
• Retail stores with foot traffic disruption
• Event venues, wedding planners, entertainment companies
• Gyms, fitness studios, spas, salons
• Hotels and hospitality businesses
• Manufacturing with supply chain disruptions
• Professional services that couldn't meet clients in person

The key insight: if they needed MCA funding during 2020-2022, they probably qualify for ERC. The same financial stress that drove them to alternative lending likely makes them eligible for credits.

How Should You Position ERC Credits to Business Owners?

The biggest mistake brokers make when learning how to sell ERC tax credits to businesses is leading with the technical details. Business owners don't care about CARES Act provisions or IRS forms. They care about cash flow and keeping money they've already earned.

Lead with the Financial Impact

"Based on your employee count, you could be eligible for up to $390,000 in tax credits for keeping your team employed during COVID. This isn't a loan — it's money you've already earned that the government owes you."

Notice the framing: it's money they've earned, not a government handout. This positioning removes stigma and positions you as helping them claim what's rightfully theirs.

Address the Urgency

The ERC program has deadlines. For 2020 credits, businesses had until April 15, 2024 to file amended returns. For 2021 credits, the deadline is April 15, 2025. But here's the key: processing times are extending as the IRS gets backlogged.

"The IRS is taking 12-18 months to process ERC claims filed today. Every month you wait is another month without that cash in your account. Businesses that filed in early 2023 are just getting their checks now."

Connect to Their Current Challenges

Link ERC benefits to problems they're already discussing with you. If they need MCA funding for equipment, show how ERC credits could fund that expansion without taking on debt. If they're worried about seasonal cash flow, position ERC as the buffer that eliminates those concerns.

What Are the Standard Pricing Models for ERC Sales?

ERC pricing typically follows one of three models. Your choice depends on your risk tolerance, the client's situation, and how quickly they need cash.

Contingency Fee (Most Common)

You get paid 20-30% of the credit amount, but only after the client receives their refund from the IRS. No recovery, no fee. This model requires no upfront payment from the client but means you wait 12-18 months for payment.

Example: Client gets $300,000 in ERC credits, you earn $75,000 (25% fee). But you wait until the IRS cuts the check.

Upfront + Contingency Hybrid

Client pays $5,000-$15,000 upfront to cover preparation costs, then you take a reduced contingency fee (15-20%) on the back end. This gives you immediate cash flow while still aligning incentives.

ERC Advance/Buyout

Partner with funding companies that buy pending ERC claims. Client gets 70-80% of the credit amount immediately, you get paid your commission upfront. The funding company waits for the IRS payment.

This is powerful for clients who need cash now. Businesses that need funding immediately often prefer getting $200,000 today over waiting 18 months for $300,000.

Proven Outreach Tactics for ERC Sales

The outreach approach for ERC is different from MCA. With MCA, you're solving an immediate cash flow problem. With ERC, you're often introducing an opportunity they didn't know existed. This requires more education and trust-building.

Warm Outreach to Existing Clients

Start with your MCA client database. Send a personal email or make a phone call: "I've been helping businesses recover money they're owed from the government — an average of $150,000 per business. Based on what I know about your company, you likely qualify. Worth a 15-minute conversation?"

Cold Email with Specific Dollar Amounts

Generic ERC emails get ignored. Specific emails that mention their industry and employee count get opened. "Most restaurants with 12-15 employees like yours are eligible for $180,000-$390,000 in ERC credits. Have you looked into this?"

The key is doing research upfront. Cold email templates for MCA work well adapted for ERC when you personalize the financial impact.

LinkedIn with Social Proof

LinkedIn works well for ERC because business owners want to see credibility before discussing tax strategies. Share case studies of similar businesses you've helped: "Just helped a local contractor recover $240,000 in ERC credits they didn't know they were owed."

Referral Partnerships

CPAs, bookkeepers, and payroll companies are goldmines for ERC referrals. They have client lists full of qualifying businesses. Offer them 5-10% of your commission for qualified referrals that close.

How Do You Handle Common ERC Objections?

ERC sales involve larger dollar amounts and longer time horizons than MCA deals. This creates unique objections you need to handle confidently.

"This sounds too good to be true"

Response:"I understand the skepticism. The government created this program to reward businesses that kept employees on payroll during the pandemic instead of laying them off. You paid those wages, you kept people employed when it was expensive to do so — this credit is literally compensation for that decision. Here's documentation from the IRS website explaining exactly how it works."

"My CPA never mentioned this"

Response:"Most CPAs focus on compliance, not proactive credit recovery. The ERC rules have changed three times since launch, and many accounting firms don't specialize in this area. That's exactly why businesses are working with specialists like us. We can coordinate with your CPA to make sure everything is filed correctly."

"What if the IRS audits us?"

Response:"We document everything according to IRS guidelines and provide full audit support if needed. The bigger risk is leaving $200,000+ on the table because of audit fear. We've had clients audited, and proper documentation has resolved every case successfully."

"The processing time is too long"

Response:"The IRS processing time is exactly why we also offer advance funding options. You can get 75-80% of your credit amount within 2-3 weeks while we handle the IRS paperwork. You're not waiting 18 months for cash you need now."

Proven Closing Techniques for ERC Sales

ERC closes are different from MCA closes because the decision timeline is longer and involves more stakeholders. You need techniques that create urgency without pressure.

The Opportunity Cost Close

"Here's how I look at it — if we start the process today, you're in line to receive $280,000 in credits. If we wait six months, you're still going to receive $280,000, but you've lost six months of processing time. The money doesn't get bigger by waiting, but you do get it later."

The Documentation Close

"The hardest part of ERC is gathering documentation from 2020-2021. Payroll records, government orders, revenue reports — it gets harder to find this information as time passes. Let's start the documentation process now while everything is still accessible."

The Partnership Close

"I know this feels like a big decision. Here's what I suggest — let's move forward with the initial qualification and documentation review. Once we confirm your exact credit amount, then you can decide whether to proceed. Fair enough?"

This works because it lowers the commitment threshold while moving the process forward.

Advanced Strategies: Combining ERC with MCA Sales

The most successful brokers don't just sell ERC as a separate product — they integrate it into their MCA sales process to create bigger, stickier client relationships.

The Bridge Strategy

When a client needs immediate funding but also qualifies for ERC, position MCA as the bridge: "We can get you $75,000 in funding next week for immediate needs, and then use your ERC refund to pay down the advance when it comes in. This gives you cash now and reduces your long-term cost."

The Expansion Strategy

For clients who don't need immediate funding: "Your ERC credit will be around $200,000. Have you thought about what you want to do with that capital? We can help you plan the expansion or equipment purchase so you're ready to deploy the money when it arrives."

This positions you as a strategic advisor, not just a transaction broker. Clients are more likely to return for future deals when you've helped them with long-term planning.

The Referral Multiplier

ERC clients tend to give better referrals than MCA clients because the experience is more consultative and the dollar amounts are larger. A client who receives $300,000 in ERC credits will actively refer friends and industry contacts.

Build referral requests into your ERC process: "Once your credit comes through, I'd love to help other businesses in your industry recover money they're owed. Who comes to mind that might be in a similar situation?"