Where to borrow
Business loan brokers and marketplaces: when they help and when they cost you
A good broker earns their fee on a complicated file. A bad one sells your information. Here is how to tell the difference before you submit anything.
How the money works
Almost every broker and marketplace is paid by the lender, as a percentage of the funded amount. Rates vary by product, and here is the important part: the commission is usually highest on the most expensive products. A broker who places you in a merchant cash advance typically earns several times what the same broker earns placing you in an SBA loan.
When a broker genuinely adds value
- Business acquisitions, where knowing which lender is comfortable with your specific deal structure saves months.
- Unusual industries or situations — a prior bankruptcy, a complex ownership structure, a business type most lenders avoid.
- Commercial real estate, where the lender universe is fragmented and genuinely hard to navigate.
- When you have been declined and do not know why, and need someone who can read the file the way an underwriter would.
What a broker does not add value on: a plain-vanilla request from a healthy two-year-old business with good credit. You can call three banks yourself in an afternoon.
The questions to ask before you send documents
- How are you paid, by whom, and does it vary by product?
- Which specific lenders will you submit to, and why those?
- Will you submit to more than one at a time, and will you tell me before you do?
- For SBA: will you sign Form 159 disclosing your fee? (There is only one correct answer.)
- What happens to my information if this does not fund?
Marketplaces specifically
A marketplace collects one application and distributes it. The convenience is real. The cost is control: your information may be sold as a lead, and the calls can continue for months. Some marketplaces are genuinely curated and disclose their model clearly; others are lead generators with a lending veneer.
- Read the privacy policy specifically for whether they sell or share your information with "marketing partners".
- Use a dedicated email address and phone number for any financing enquiry.
- Check whether the entity is a lender or a broker — this is disclosed, usually in the footer, and it is frequently not what the homepage implies.
Questions people actually ask
How much do business loan brokers charge?
Most are paid by the lender rather than by you, typically as a percentage of the funded amount. Some also charge the borrower a packaging fee, commonly $2,000 to $5,000 on SBA deals. On an SBA loan any fee paid to an agent must be disclosed on Form 159.
Should I use a broker for an SBA loan?
Only for a complicated file — an acquisition, an unusual industry, a previously declined application. For a straightforward request you can approach SBA lenders directly at no cost, and a lender doing high 7(a) volume will guide you through the package themselves.
What happens to my information when I apply on a marketplace?
It depends entirely on the privacy policy, and many permit sharing with marketing partners. That is how one application becomes forty phone calls. Read that section before you submit, not after the calls start.