Business Finance Broker Fees and Commissions: What to Ask First
Business Owners
Broker fees · Commission · Licence checks
Who pays a business finance broker, when a broker fee is fair, and how to check a broker before you hand over your details. Written for self-employed business owners and ABN holders, with the questions to ask before you sign anything.
Quick Answer
Most business finance brokers are paid a commission by the lender when your loan settles, so you usually pay them nothing directly. Some charge a fee, which should be agreed in writing before any work starts. Before you share your details, check who the broker is licensed under.
Also called: broker commission, brokerage, mandate fee or finance broker charges. Not the same as a business broker, who sells businesses.
Do business finance brokers charge a fee in Australia?
Most business finance brokers do not charge you a fee, because the lender pays them a commission when your loan settles. That is how most of the business loans we arrange are paid for, and it is why a first conversation with a broker usually costs you nothing.
For home loans, the position is set by law. Moneysmart's guide to using a mortgage broker says lenders generally pay the broker a commission, and that “Sometimes brokers might charge you a fee directly.” It adds: “You must sign a quote before a broker can provide services and request payment of a fee.” This is a home loan rule under consumer credit law. A business loan sits outside that consumer law, as the protections comparison further down sets out.
That does not leave a business borrower with no rules at all. A broker who is a member of the MFAA must put any fee to you in writing, saying what it is for, how much it is and when it is payable, under clause 6.2 of the MFAA Code of Practice, which has applied since 26 September 2026. The Code binds MFAA members only, so ask whether your broker is one.
Any broker fee is separate from what the lender charges. Establishment costs, valuation costs and exit fees on the loan itself sit in the loan contract, not in the broker's terms. If you are coming back to finance after a bank has said no, the same question comes first: how is the broker paid on this deal?
If you searched for business broker fees, a business broker sells businesses; that is a different trade.
When is a broker fee reasonable?
A broker fee is reasonable when there is a real reason for it. The common ones are a funder that pays no commission, a deal that needs unusual work to get across the line, or a facility small enough that the commission does not cover the work. In each case the fee should be agreed in writing before work starts, should say what it covers and when it is payable, and should leave you free to walk away before it applies. A fee you only hear about at the end, or one with no stated purpose, is the one to question.
How does broker commission work on a business loan?
Broker commission on a business loan is paid by the lender, usually as a once-off amount when the loan settles. You do not receive an invoice for it. Some lenders also pay a smaller ongoing amount while the loan runs, called trail commission.
Most brokers are paid through an aggregator, a larger business that holds the lender agreements and passes commission on to the brokers in its network after taking its share. The mechanism is the same whether the money comes from a bank or a non-bank lender: the lender pays, at settlement, under its agreement with the aggregator.
The only regulator data on commission levels is for home loans. ASIC Report 516 (paras 28 and 33(a)) found that in 2015 the typical upfront commission was 0.62% and the trail 0.18%, paid to the aggregator, with the broker business keeping 0.54% and 0.14%. Lenders recovered 4% to 10% of upfront commission through clawback, where a lender takes commission back when a loan ends early, over a period commonly two years. These are home loan figures, from 2015 data on a $500,000 loan. No regulator publishes commission levels for business loans, so treat any percentage you see quoted online with care.
The table below is how business facilities are usually paid for in our experience. It is a pattern, not a rule, and the only reliable answer for your deal is the one the broker gives you in writing.
| Facility | Who usually pays the broker | Broker fee to you? | Where it should be disclosed |
|---|---|---|---|
| Equipment and vehicle finance | The lender, by commission at settlement | Usually none | Before you proceed (MFAA members: cl 6.13) |
| Unsecured business loan | The lender, by commission at settlement | Usually none | Before you proceed |
| Invoice finance | The lender or funder | Sometimes, by agreement | In writing before work starts |
| Commercial property loan | The lender, by commission at settlement | Sometimes, on complex deals | In writing before work starts |
| Development finance | The lender, often with a fee to you on larger deals | Often | In writing before work starts |
| Private, caveat and second mortgage loans | Often no lender commission | Often a brokerage fee, deducted at settlement | In writing before lodgement, and in the loan documents |
Sources: Broking desk observation, Switchboard Finance, October 2026; MFAA Code of Practice (effective 26 Sep 2026), read 2 Oct 2026. Practice varies by lender and deal.
Does the commission change your interest rate?
The commission comes out of the lender's margin, and you do not pay it as a separate charge. What matters more is whether the broker has shown you the options they compared, so ask to see them and why one was chosen. A broker who is an MFAA member must disclose the commission, who pays it, who receives it and the amount or how it is worked out, before you proceed, under clause 6.13 of the Code.
What is a lender panel and does a bigger panel mean a better deal?
A lender panel is the list of lenders a broker is accredited to submit deals to, usually through an aggregator. It is the broker's reach: a deal can only go to a lender on the panel.
A bigger panel is not automatically a better deal. What matters is whether the panel includes lenders that fit your deal type, your security and your trading history. A broker with a long list of home loan lenders may still have few options for a low-doc equipment deal or a property-secured private loan, and the reverse is just as true.
So rather than asking how many lenders a broker has, ask which lenders on the panel would actually look at your deal, and why. Our matrix of what non-bank lenders accept and charge shows how far lender policy varies across the market, which is the reason fit beats size.
What does lender accreditation mean?
Accreditation means a lender has approved the broker to lodge applications with it. A broker can only lodge with lenders that have accredited them, usually through an aggregator, and accreditation is lender by lender. Ask which lenders they are accredited with for your type of loan, not across the board. For property and development deals, see how panels differ by deal size.
How do you check a finance broker is licensed in Australia?
Check the broker on ASIC's register before you send any documents, and note which licence holder they work under. ASIC's Professional Registers show licensees and the representatives authorised under them.
Credit law applies to consumer credit, so a broker who also arranges consumer credit must hold an Australian credit licence or be a credit representative, a person or business authorised by a licence holder to act on its behalf. Ask which licence holder they work under, then check that name on the register, along with the banned and disqualified lists.
Switchboard Finance is a credit representative of an Australian credit licence holder; the numbers are in our footer and on the ASIC register.
The checks below take a few minutes and are worth running on every broker you speak to. If you are comparing several, our guide to filtering brokers before you call covers the first-call questions.
| Check | Where to check it | What a good answer looks like |
|---|---|---|
| Licence or authorisation | ASIC Professional Registers | A licence holder, or a credit representative linked to one |
| Banned or disqualified | ASIC Professional Registers, banned and disqualified search | No listing |
| Complaints body | AFCA member search at afca.org.au | The licence holder is an AFCA member |
| Industry accreditation | FBAA find a broker; MFAA find a broker | A current listing |
| How they are paid | Ask, and get it in writing | Commission disclosed before you proceed |
| Any fee to you | The broker's written fee terms | Amount, what it covers and when it is payable |
Sources: ASIC Professional Registers (updated 30 Jun 2026); AFCA, small business; FBAA; MFAA Code of Practice cl 6.2 and 6.13. All read 2 Oct 2026.
Is a lead generation site the same as a broker?
No. A lead generation site collects your details and passes or sells them to someone else, while a broker works your deal. The difference matters because a lead site's customer is whoever buys the enquiry, not you.
In September 2026 ASIC sued a lead generation business. ASIC alleges its websites presented themselves as comparing loans, including business loans, while enquiries were sold by auction to the highest-bidding broker. These are allegations, not findings. ASIC's media release 26-221MR sets out the case, which relies on the misleading conduct provisions of the ASIC Act.
Going straight to a lender is the other option, and it suits some borrowers; the trade-offs are set out in the cost of going direct. In private lending especially, where funders vary widely, knowing who is actually handling your enquiry is the first check.
Signs you are dealing with a broker
- Names its licence holder
- Tells you how it is paid
- Talks to you before asking for documents
- Can name the lenders it is accredited with for your deal
Signs you are dealing with a lead site
- Claims to compare many lenders instantly
- No licence holder shown
- Asks for full details before any conversation
- You hear from several firms after one form
| Question | Broker | Lead generation site | Direct lender |
|---|---|---|---|
| Who works your deal | The broker, through to settlement | Nobody; the enquiry is passed on | The lender's own staff |
| How it is paid | Lender commission, sometimes a fee to you | Paid for each lead or sale | Interest and fees on the loan |
| Lenders considered | Those on its panel | None directly | Only its own products |
| Licence | Licensee or credit representative | Often none shown | Licensee for consumer credit; commercial-only lenders may have none |
| What happens to your details | Used for your application | May be sold or passed to several firms | Used for its own assessment |
Sources: ASIC INFO 207 (Apr 2024); ASIC media release 26-221MR (18 Sep 2026). Read 2 Oct 2026.
Is it a problem if a broker buys leads?
Buying leads is legal, and plenty of brokers do it. The risk is a site that claims to compare or recommend loans when all it does is sell your enquiry. Before you fill in a form, ask who will call you and why, and if the answer is several firms you have never heard of, you are on a lead site.
What should you ask a business finance broker before you sign anything?
Ask how the broker is paid, what you will be charged and when, and which lenders they can actually use. Those three answers tell you most of what you need. The rest of the list tests the recommendation itself: why one lender over another, and how many applications will go in, because each lodgement can show up on your file and lenders notice how many credit enquiries is too many. The same questions apply whether you are choosing between brokers or deciding between a broker or direct lender for a short-term property-secured loan.
| Question | Why it matters | A straight answer sounds like |
|---|---|---|
| How are you paid on this loan? | Shows who the broker answers to | “The lender pays us a commission at settlement” or a stated fee |
| Will I pay you anything? | Avoids surprise fees | “No”, or a written fee with an amount |
| When would a fee be payable? | You can stop before it applies | “Only at settlement” or a date in writing |
| Which licence holder do you work under? | Lets you check the register | A named licensee you can search |
| Which lenders can you use for this deal? | A panel only helps if it fits your deal | Lender types that fit your purpose and security |
| Why this lender over the others? | Tests the recommendation | Reasons tied to your deal, not to speed alone |
| How many applications will you lodge? | Each lodgement can be a credit enquiry | “One, after we have tested it” |
| What will the lender charge on top? | Lender fees sit outside the broker fee | Establishment, legal and valuation costs listed |
| What happens if it does not settle? | Fees and commission depend on settlement | What you pay, if anything, in writing |
| Who handles a complaint? | You need a path before you need it | The licence holder's complaints process, then AFCA if it applies |
Sources: MFAA Code of Practice cl 6.2, 6.13 and 7 (effective 26 Sep 2026), read 2 Oct 2026.
What protections do you have on a business loan compared with a home loan?
A business loan carries fewer protections than a home loan, because most consumer credit law stops at business purpose lending. ASIC's guidance on when the credit legislation applies says it covers credit that is predominantly for personal, domestic or household purposes, and predominantly means more than 50% consumer. A loan used mostly for business sits outside it.
That is why Moneysmart notes that “responsible lending obligations do not apply to business loans.” It goes further on the lender side. ASIC INFO 207 states: “Lenders that only provide commercial loans are not required to have a credit licence and are not legally required to be a member of AFCA.”
Some protections do reach business borrowers. The ASIC Act still prohibits unconscionable and misleading conduct, and unfair terms in standard form small business contracts. On unconscionable conduct, courts look for evidence that the lender took improper advantage of a power imbalance, which is a high bar. ASIC lists business loans and broker agreements among the standard form contracts small businesses sign, and since 9 November 2023 unfair terms in those contracts are illegal and attract penalties, each term a separate contravention.
Whether a contract term is unfair, or whether you have a claim against a broker or lender, is a question for a solicitor. If a bank has already declined you, see what the bank must tell you after a decline and whether a broker can help after a decline.
| Protection | Home loan (consumer credit) | Business loan | Source |
|---|---|---|---|
| Responsible lending | Applies | Does not apply | Moneysmart, read 2 Oct 2026 |
| Signed quote before a broker fee | Required by law | No legal requirement; MFAA members must put fees in writing | Moneysmart (4 Sep 2026); MFAA Code cl 6.2 |
| Lender licence and AFCA membership | Required | Not required for commercial-only lenders | ASIC INFO 207 (Apr 2024) |
| Unfair contract terms | Apply | Apply to standard form small business contracts (fewer than 100 employees or turnover under $10 million, upfront price $5 million or less) | ASIC (9 Nov 2023) |
| Misleading or unconscionable conduct | Prohibited | Prohibited under the ASIC Act | ASIC INFO 207 |
| Internal complaints | Response within 30 calendar days | Same where the firm is a licensee or its representative | ASIC RG 271.56 |
| External complaints (AFCA) | Available | Small businesses under 100 employees; credit facility up to $6.3 million | AFCA (read 2 Oct 2026) |
Sources: Moneysmart, Going guarantor on a loan, last updated not shown; Moneysmart, Using a mortgage broker, last updated 4 Sep 2026; MFAA Code of Practice, effective 26 Sep 2026; ASIC INFO 207, Disputes about commercial loans, last updated Apr 2024; ASIC, Unfair contract terms reforms commence, 9 Nov 2023; ASIC RG 271, Internal dispute resolution, 2 Sep 2021; AFCA, Small business, last updated not shown. All read 2 October 2026.
Can you complain to AFCA about a business loan?
Yes, if the firm is an AFCA member and you are a small business under its rules. AFCA's small business page says the complaint must be about an AFCA member, a small business means fewer than 100 employees, and it cannot consider a small business credit facility over $6.3 million for complaints lodged from 1 January 2024. Limits are adjusted every three years; next 1 Jan 2027. A commercial-only lender may not be a member at all. Start with the firm's own complaints process, which must respond no later than 30 calendar days under RG 271.56; a credit representative's conduct is handled through the licence holder's process.
How is Switchboard Finance paid, and what happens to your enquiry?
We are paid by the lender on most business loans, and we tell you in writing before you proceed if that ever changes. Here is how that works in practice.
From the broking desk, October 2026. General information, not an offer.
On most business loans we arrange, the lender pays us a commission when the loan settles, and you pay us nothing. Some private and caveat funders pay no commission. On those, any fee we charge is set out in writing before anything is lodged, so you can say no before it applies. We do not charge you to make an enquiry, to be assessed, or to be told a deal will not work.
General information based on how we work, not a quote or an offer. Actual terms depend on lender policy and your circumstances at the time of application. Not financial advice.
When you enquire, there is no credit check at that stage, and a broker calls you back the same business day. As our privacy policy puts it: “We do not sell personal information.”
What does a broker actually do between your enquiry and settlement?
Between your first call and settlement, a broker matches your deal to a lender, packages it, lodges it and manages it through approval. In our experience the work before lodgement matters most, because it decides whether the application goes to the right lender the first time.
- First call. What you need, what you own and what has happened, including any past declines.
- Scenario. The broker tests the deal against lender policy before anything is lodged.
- Documents. The broker builds the pack the chosen lender needs, and nothing it does not.
- Lodgement. One application to the best-fit lender, not a spray across several.
- Assessment and valuation. The lender assesses the deal and, where there is security, orders the lender's valuation.
- Approval and conditions. The broker works through any conditions with you and the lender.
- Settlement and drawdown. On settlement day the funds are released, followed by the first drawdown on a facility. Commission is paid by the lender at this point.
On most business loans the lender pays the broker a commission at settlement and you pay the broker nothing. Where a funder pays no commission, a broker fee can be fair, as long as it is agreed in writing before work starts. Business loans sit outside most consumer credit law, so the checks are yours to run: the ASIC register, AFCA membership, how the broker is paid, and whether you are talking to a broker or a lead site.
Key takeaway: ask how the broker is paid and get the answer in writing before you send a single document.Frequently Asked Questions
Usually yes: on most business loans the lender pays the broker a commission when the loan settles, so you pay nothing directly. A fee can apply where the funder pays no commission, which is common in private lending, and it should be agreed in writing before any work starts.
It depends on the lender and product, and no regulator publishes commission levels for business loans. ASIC's last published data is for home loans, from 2015. A broker who is an MFAA member must tell you the commission, or how it is worked out, before you proceed. If you are weighing a broker against going direct, ask for that figure first.
Yes, on some deals, as long as both are disclosed before you proceed. Ask what the fee covers that the commission does not, and check the lender's own costs separately, including any exit fees, so you can compare the whole cost.
Lender commission is normally paid only when a loan settles, so a broker paid that way earns nothing if the deal falls over. A written fee may say otherwise, which is why the fee terms should state when payment is due. On caveat loans through a broker, read that clause before you sign.
Search the broker on ASIC's Professional Registers and note the licence holder they work under. Then check that the licence holder is an AFCA member, and look for a current FBAA or MFAA listing. Our guide to filtering brokers before you call covers the questions to ask on that first call.
It can be, because some private funders pay no commission. A mandate or brokerage fee should be in writing before lodgement and should say what it covers, the amount and when it is payable. On a caveat loan it is usually deducted from the advance at settlement.
Use ASIC's Professional Registers search, which shows licensees and the representatives authorised under them. A broker should give you their licence holder's name on request. If you are comparing brokers for a business loan, run the same check on each before sending documents.
Often yes. Many business loans, including most equipment finance, are paid for by lender commission. Ask at the first call whether you will pay anything, and get the answer in writing before you agree to proceed.
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