How are business loan brokers paid?

Answer in brief

Most business loan brokers are paid a commission by the lender when your loan completes. Some also charge you a fee, which should be agreed in writing before they start, and ideally paid only if you take a loan. Ask how they're paid and whether it affects the rate you're offered.

The two ways brokers earn

Lender commission. The lender pays the broker when the deal completes. This is the most common model.
Client fee. You pay the broker, either a fixed fee or a percentage of the loan. Some brokers charge both.

Questions to ask before you start

How are you paid on this deal?
Do you charge me anything? How much, and when?
Is any fee refundable if I don't get a loan, or if I turn the offer down?
Does your commission change the rate I'm offered?

Upfront fees

Paying a fee before you've seen a loan offer is a common warning sign. Reputable brokers usually take any fee on completion, once you've accepted an offer.

Questions and answers

Are business loan brokers free?

Many are free to you because the lender pays them. Others charge a fee. Always ask, and get the answer in writing.

Does Tally charge me?

No. Tally is free to use. It may be paid by the brokers and lenders it introduces you to.

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