What a business loan broker does, and whether you should use one
A broker sits between you and the lenders. That can save you weeks and get you offers you would not have found, or it can add a fee and a layer of fog. This page explains how the role actually works, how brokers are paid, what to ask before you hand one a bank statement, and how Fundur, which is a broker, does it.
A broker never approves or declines you. It decides where your file goes and how it is presented, and it is paid when a lender funds.
What a business loan broker actually is
A business loan broker is an intermediary. You give it one application and one set of documents; it decides which lenders are likely to approve that file, presents it to them, collects the offers, and usually stays involved until the money lands. In commercial finance the same role goes by several names: broker, independent sales organisation (ISO), referral agent, loan consultant, or, when the front end is software, a marketplace. The names describe how the intermediary is organised, not whether it is one.
The one thing a broker never does is make the credit decision. Approval, the amount, the rate and the terms are set by the lender that funds the deal. A good broker changes which lenders see your file and how it is presented to them. It cannot change what the file says.
This page is for business owners deciding whether to use one. If you are looking for how to become a broker, or for broker or ISO recruiting programmes, that is a different subject and this page will not help.
| Direct lender | Broker or ISO | Marketplace | |
|---|---|---|---|
| Who you deal with | The lender's own sales and underwriting staff. | One broker, who deals with the lenders for you. | Software first, then usually an advisor or a broker behind it. |
| Who underwrites and decides | The lender. | Each lender the file is placed with. | Each lender the file is matched to. |
| How many applications you fill in | One per lender you try. | One. The broker re-uses it. | One. The system re-uses it. |
| How the intermediary is paid | No intermediary. The lender's margin is in the price. | Normally a commission from the lender when the deal funds; some brokers also charge the borrower a fee. | Normally a commission from the lender when the deal funds. |
| What you get that you would not otherwise | A direct relationship, and sometimes a lower price if you already bank there. | Reach into lenders you would not have found, and a file packaged the way underwriters want to read it. | The same reach, plus a side-by-side comparison of what came back. |
Fundur is a marketplace in this sense: one application, checked against a lender network, with an advisor reading the file and the offers. The credit decisions are the lenders'. Fundur does not make them and does not guarantee approval, rates, terms or funding times.
What happens to your information once a broker has it
The part most borrowers never see. Knowing the sequence tells you what a good broker is doing on each day of silence, and what a bad one is not.
Intake
The broker reads the application and the bank statements before any lender does, and works out what the file can realistically support: which products, roughly what amount, and what the obvious questions will be.
Packaging
The file is assembled the way underwriters read it: statements in order, the use of funds stated plainly, existing financing declared, and the answers to the obvious questions supplied before they are asked.
Placement
The file goes to the lenders whose credit box it fits. This is the broker's actual expertise. Sending one file to twenty lenders is not placement; it is noise, and lenders notice files that have been everywhere.
Offers
Lenders respond with approvals, declines or questions. A good broker translates the offers into the same six lines — amount received, total repaid, payment, frequency, term, prepayment treatment — so you can compare them.
Closing and funding
You accept one offer. The lender verifies, may run a hard credit check now, and funds. The broker is paid by the lender at this point, which is why its incentive is to get a deal funded, and why you should hold it to getting the right one funded.
Whether seeing your options involves a soft inquiry or a hard one is a policy decision each broker and lender makes, and it is worth asking in writing. Checking your options with Fundur won’t affect your credit score. A lender may run its own credit check before funding, which may affect your score.
How brokers are paid, and what that does to your offer
The normal model in commercial finance is that the lender pays the broker a commission when a deal funds. The borrower pays nothing to the broker directly; the lender's price to the borrower includes the cost of acquiring the deal, exactly as it would include the cost of a sales team. The consequences are worth understanding.
The broker earns only when you fund
Which aligns it with getting you an approval, but not automatically with getting you the cheapest one. Commission structures differ by lender and product, and a broker is not obliged to tell you what it earns on each. You are entitled to ask.
Some brokers charge you as well
Packaging fees, success fees, or a percentage of the amount funded, deducted at closing. These are legal when disclosed, and they are on top of the lender's price. Ask for every fee in writing before you sign anything, and ask whether it is deducted from what you receive.
An advance fee is the red flag
The Federal Trade Commission's guidance on advance-fee loans is blunt: an up-front fee the lender wants to collect before granting the loan is a cue to walk away, especially if it is described as insurance, processing or paperwork. The same applies to brokers.
| Context | What applies | Why it matters to you |
|---|---|---|
| SBA 7(a) loans | Any fee paid to an agent, broker or packager for help with an SBA loan must be disclosed on SBA Form 159, the Fee Disclosure and Compensation Agreement, signed by the applicant and the agent and filed with the lender. The SBA also caps what can be charged for packaging and referral services and lets the lender pay a referral fee instead of the borrower. | If a broker is helping with an SBA loan and has not mentioned Form 159, ask why. |
| State commercial-financing disclosure laws | A growing list of states requires providers, and in some states brokers, to give a written disclosure of the total cost of certain commercial financing offers before signing. California and New York were first; others have followed. | The written disclosure is yours to keep. If an offer arrives without one in a state that requires it, ask before you sign. |
| State broker registration | Some states now register or license commercial financing brokers. Texas, for example, requires brokers of sales-based commercial financing to register with its Office of Consumer Credit Commissioner by 31 December 2026, regardless of where the broker is based. Virginia and Connecticut have their own regimes. | Registration is a public record. Where it applies, you can check it. Fundur's state guides summarise the commercial-lending rules that apply in each state. |
Sources: Federal Trade Commission, What To Know About Advance-Fee Loans; U.S. Small Business Administration, 7(a) loan programme terms, conditions and eligibility and SBA Form 159; Texas Finance Code Chapter 398, as summarised on business loans in Texas. This is general information, not legal advice; the rules that apply to a specific offer depend on the state, the product and the amount.
Fundur is compensated by the financing provider in the form of a commission if and when a financing transaction actually funds. Fundur is not paid for transmitting your information to a financing provider and does not receive payment simply because your information was sent to one. That is stated in Fundur's privacy policy, and it is the whole of the arrangement: checking your options costs you nothing, and there is no fee before, at, or after funding from Fundur.
When a broker helps, and when going direct makes more sense
A broker is a tool for a particular job. It is not the right tool for every borrower, and a broker that tells you it is has told you something about itself.
A broker is likely to help when
- You do not already have a lending relationship with a bank that knows your business, and the bank you do have has said no.
- Your file has something an underwriter will ask about — a slow quarter, an existing financing position, a short trading history — and it needs to be explained, not just submitted.
- The product you need is one banks rarely offer at your size: invoice factoring, equipment financing on used assets, a short-dated working capital loan.
- You want to compare more than one real offer without filling in more than one application, and without a hard inquiry per lender.
- Speed matters. A broker that already knows which lender funds which file in two days is faster than discovering it yourself.
Going direct makes more sense when
- Your bank already knows you, has offered you a line or a term loan, and the price is competitive. A broker cannot usually beat a relationship price on a clean file.
- You are applying for an SBA loan through a bank that is an active SBA lender. The bank packages it; the extra layer adds little, and any agent fee has to be disclosed and justified.
- You need a product brokers do not typically place, such as a conventional commercial mortgage.
- The broker will not tell you which lender an offer is from, or what it is paid. Direct is better than opaque.
The SBA runs its own free matching service, Lender Match, which connects applicants with participating SBA lenders. It is a reasonable first step for an SBA-eligible business that wants to go direct.
Seven questions to ask any broker, and the answers you want
Ask them in writing. A broker that answers all seven plainly is one you can work with. One that answers none of them has answered the question anyway.
- How are you paid, and by whom?You want: by the lender, on funding, and any borrower-paid fee named in dollars before you sign anything.
- Is there any fee before funding?You want: no. A fee for processing, insurance or paperwork before you have an approval is the signature of an advance-fee scam.
- Does seeing my options involve a hard credit inquiry?You want: a clear answer on whether checking your options affects your credit, and whether a lender will run its own credit check.
- Which lenders will see my file, and how many?You want: a short, specific answer. A file sent to every lender at once is a file that has been shopped, and lenders price that.
- Will you tell me which lender each offer is from?You want: yes, before you accept. You are signing that lender's contract, not the broker's.
- Will you show me total repayment, APR where applicable, and the payment frequency for every offer?You want: yes, in the same format for each offer. A broker that only quotes a factor rate or a monthly figure is hiding the comparison.
- What happens to my information if I do not proceed?You want: a clear statement of who has it and what they may do with it, consistent with a written privacy policy.
Six things that should end the conversation
“Guaranteed approval”
No broker can guarantee a lender's decision. The FTC lists promises like “no hassle, guaranteed” and “bad credit? no problem” among the signs of a loan scam, and the same words from a broker mean the same thing.
A fee before funding
Application, processing, insurance or “lock-in” fees payable before the money arrives. Legitimate brokers are paid on funding. Where a lender charges a genuine application or appraisal fee, it is the lender that charges it, and it does not guarantee the loan.
An offer with no lender's name on it
You cannot check a lender you cannot name. An offer should identify the funder, and the contract you sign should be that funder's.
Pressure and expiry
“This offer is gone by five o'clock.” Real offers have expiry dates measured in days, and a broker whose interest is in your business does not need you to sign before you have read the schedule.
Numbers that will not resolve
A broker that cannot or will not put total repayment and payment frequency next to the headline rate is preventing the comparison the whole exercise exists to make.
“We’ll just add another position”
A pitch to take a second or third advance on top of an existing one, rather than to pay the first one off, is usually a pitch for the broker's next commission. What consolidating business debt actually changes explains why the two are opposites.
How Fundur works as a broker
Fundur is a business financing marketplace and, in the language of this page, a broker. It is not a lender, it does not make credit decisions, and it does not guarantee approval, rates, terms or funding times. What it does is take one application, check it against a network of lenders, have an advisor read the file and the offers, and explain what is actually different between them. Fundur is paid a commission by the financing provider if and when a transaction funds, and is not paid for sending your information anywhere.
The products that come back are the ones on the small business loans hub: working capital loans, lines of credit, term loans, equipment financing, invoice factoring and SBA loans, with the trade-offs between them set out on the comparison pages. Checking with Fundur won’t affect your credit. There is no obligation to accept anything, and every offer is shown with the amount received, total repaid, payment, frequency and term on the same six lines so that they can be compared.
Apply the seven questions above to Fundur as strictly as to anyone else. The answers are on this page, in about us, and in the privacy policy.
Business loan broker FAQs
Is a business loan broker the same as a lender?
No. A lender funds the loan and makes the credit decision. A broker arranges the loan: it presents your file to lenders, collects the offers and helps you close. Some companies do both, which is why it is worth asking any intermediary whether it is lending its own money or placing your file with someone else's.
Do I pay a business loan broker?
Usually not directly. The normal model is that the lender pays the broker a commission when the deal funds. Some brokers also charge the borrower a packaging or success fee, which must be disclosed, and any fee demanded before funding is a warning sign. Fundur charges the borrower nothing; it is paid by the financing provider only if a transaction funds.
Does using a broker mean several hard credit inquiries?
It depends on the broker's and the lenders' policies, so ask in writing. Checking your options with Fundur won’t affect your credit score. A lender may run its own credit check before funding, which may affect your score.
Can a broker get me a better rate than going direct?
Sometimes, and sometimes not. A broker's advantage is reach and packaging: lenders you would not have found, and a file presented the way underwriters want to read it. On a clean file with an existing bank relationship, the bank's price is often hard to beat. The honest test is to compare a broker's offers against any direct offer you already hold, on total repayment rather than headline rate.
What is the difference between a broker and a business loan marketplace?
A marketplace is a broker with software at the front. One application is matched against a network of lenders, and the offers are compared side by side, usually with an advisor involved. The economics are the same: the lender pays on funding. Fundur is a marketplace in this sense.
Are business loan brokers regulated?
Increasingly, at state level. Several states require written cost disclosures on commercial financing offers, and some now register or license commercial financing brokers: Texas requires brokers of sales-based financing to register with its consumer credit regulator by the end of 2026, and Virginia and Connecticut have their own rules. SBA loans have their own federal rule, Form 159, requiring any agent fee to be disclosed. Fundur's state guides summarise what applies where you are.
Put the seven questions to Fundur
One application, compared across a lender network, with an advisor who will tell you which lender each offer is from and what it actually costs. No fee to you, before or after funding.