The short answer
A commercial loan broker is paid by the borrower, the bank or both, and should say which in the first conversation and in writing. On SBA loans the fee is capped and disclosed on Form 159, and contingency fees are not allowed. A broker who regularly refers borrowers is covered by Regulation B's bans on discrimination. Banks treat a referral arrangement as a third-party relationship and will ask about you.
What a community bank gets from a broker
A community bank has a handful of commercial lenders and a defined market. A broker brings loans the lenders would not have met, already organized. That is worth something to the bank only if the loans fit and the packages hold up. A broker who sends ten requests and one fits has cost the lender nine reviews.
Banks keep their own lists of brokers they will take calls from. Getting on the list is a matter of conduct over time. Nothing in this guide is a rule about what banks value. It describes common practice and the federal rules that sit behind it.
Rule one: say who pays you
Say it in the first call and put it in writing.
Paid by the borrower. The usual case. You have a signed fee agreement with the borrower. The fee is paid at closing, often from loan proceeds, and appears on the closing statement. The bank will ask for the agreement, because a fee paid from proceeds is a use of proceeds.
Paid by the bank. Some banks pay referral fees. The borrower should be told. If you are paid by both, each must know about the other.
A lender who learns at closing that the broker had an undisclosed side arrangement will not take the next call.
SBA loans: a separate set of rules
On an SBA loan a broker is an agent, and SBA regulates what agents charge. From SOP 50 10 8.1 and 13 CFR part 103:
What an agent may charge a borrower on an SBA 7(a) loan (SOP 50 10 8.1)
| Point | What the SOP says |
|---|---|
| Basis | Hourly, or a percentage of the loan amount |
| Hourly | No maximum, but fees must be reasonable and customary, and the rate and time on each service must be documented |
| Percentage, loans of $50,000 or less | Not more than 3 percent |
| Percentage, larger loans | 2 percent on the amount between $50,000 and the first $1,000,000, and 0.25 percent on the portion over $1,000,000 |
| Overall cap on percentage fees | $30,000 in the aggregate |
| Documentation | All fees over $2,500 must be supported by documenting the service performed |
| Not allowed | A standard or flat fee charged to all borrowers. Contingency fees. Charges for services not reasonably necessary |
| Disclosure | Fees are reported on SBA Form 159. Under 13 CFR 103.5 an agent must execute a compensation agreement, and must reduce or refund a charge SBA finds unreasonable |
The SOP also says an agent who packages for a borrower may act as a referral agent for a lender, “provided both” the borrower and the lender “are aware of both relationships.”
Worked example (hypothetical). You place a $750,000 SBA 7(a) loan and bill on a percentage basis. The most you may charge the borrower is 2 percent, which is $15,000. On a $2,500,000 loan the formula gives 2 percent of the first $1,000,000, or $20,000, plus 0.25 percent of the remaining $1,500,000, or $3,750. That is $23,750, under the $30,000 cap. In both cases the fee cannot depend on the loan closing, and you must be able to document the services.
SBA does not require a borrower to use an agent or broker. Say so if asked.
Regulation B reaches referrers
Regulation B defines a creditor as a person who “regularly participates in a credit decision.” For the sections that bar discrimination and discouragement, the term “also includes a person who, in the ordinary course of business, regularly refers applicants or prospective applicants to creditors, or selects or offers to select creditors to whom requests for credit may be made.”
That describes a broker. In practice:
- Take clients and present their requests without regard to any characteristic the Equal Credit Opportunity Act protects.
- Do not discourage anyone from seeking credit on such a basis.
- Do not collect or pass along information a lender could not ask for.
- The decision, and the notice of it, are the bank’s. A business that is turned down has rights to notice and reasons under 12 CFR 1002.9. Tell your client so.
Looking for a lender now? Find lenders for this in your state.
Why the bank will ask about you
In June 2023 the Federal Reserve, the FDIC and the OCC published joint guidance on third-party relationships. It covers “any business arrangement” between a bank and another entity, “by contract or otherwise,” says a relationship “may exist despite a lack of a contract or remuneration,” and lists “referral arrangements” among its examples. The guidance says it “does not have the force and effect of law and does not impose any new requirements.” It does describe what examiners expect, scaled to the risk.
For a broker this explains requests that can seem intrusive: a bank may ask for your company details, your licenses, references from other banks, a description of how you are paid, and sometimes a short written agreement. A bank that does this is following its own program. Have a one-page profile of your firm ready.
Gifts and the criminal law
Under 18 U.S.C. 215 it is a federal crime to corruptly give, offer or promise “anything of value to any person, with intent to influence or reward an officer, director, employee, agent, or attorney of a financial institution in connection with any business or transaction of such institution.” The statute exempts “bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.”
Disclosed fees paid to the bank or by the bank in the ordinary course are one thing. Something of value given to an individual lender to win a decision is another. Banks have codes of conduct with their own limits on what staff may accept. Ask, and stay well inside them.
State licensing
Some states license commercial loan brokers, some require registration or disclosures for certain loans, and some do neither. Real estate brokerage laws can also reach loans secured by real property. Licensing varies by state: check yours, and the borrower’s. No state statute was opened for this guide and none is cited.
How to be a broker a bank wants to hear from
These are conventions, stated without numbers.
- Bring loans that fit. Read the bank’s filings before you call. How to pick banks with public data is the method. A bank that holds no construction loans is not a construction lender because you need one.
- Lead with the one line and the hardest fact. A lender who hears the problem from you first trusts the rest.
- Send complete, accurate packages. What a lender-ready package looks like. Mark your own estimates as estimates and the borrower’s documents as documents.
- Tell each bank who else has it. If three banks are reviewing the loan, say so. Do not send one loan to twenty banks.
- Do not shop a term sheet. Using one bank’s written terms to pry a quarter point from another works once.
- Step back at credit. The lender runs the bank’s process. Answer questions fast and do not lobby the credit officer.
- Stay through closing. Collect the borrower’s documents and keep them moving. That is the part of the fee the bank can see.
- Respect the relationship. After closing the borrower is the bank’s customer. Do not move the loan in a year for a new fee unless the borrower’s interest is plain.
Mistakes that end a relationship
- Inflated income, a missing debt, an occupancy claim that is not true. One is enough.
- An undisclosed fee or an interest in the deal you did not mention.
- Promising the borrower a rate or a closing date the bank never gave.
- Going around the lender to the president after a no.
- Sending the borrower’s personal financial documents by open email.
When the bank says no
Ask the lender one question: is it size, property or business type, market, or timing? Each answer points somewhere different. Size points to a larger bank or a participation. Type points to a lender that already holds that kind of loan. A cash flow or collateral gap may point to an SBA guaranty. Then give the borrower an honest read. What to do after a bank says no covers the notice rules and the legitimate ways an answer changes.
What the public record shows, and what it does not
It shows: for each of the 4,313 FDIC institution record, banks here, size, loans held by kind, branches, and HMDA and SBA loans made. That is enough to choose which banks to call.
It does not show: which banks work with brokers, what they pay, or who at the bank takes broker calls. Ask.
Questions to put to the bank
- Do you take loans from brokers, and do you have a process for approving one?
- Do you pay referral fees, or do you expect the borrower to pay?
- What do you want in a first package?
- What loans do you want more of this year?
Terms used here
- Commercial mortgage broker: A commercial mortgage broker is a person or firm that takes a borrower's loan request to lenders and is paid a fee, without lending its own money.
- Community bank: A community bank is a smaller bank that takes deposits and lends mostly in the area around its offices, and decides on loans close to home.
- SBA agent (packager, referral agent or broker): Anyone who represents an applicant or a lender in dealings with SBA for pay: an attorney, accountant, consultant, packager or broker. SBA does not require a borrower to use one.
- SBA Form 159 (fee disclosure): The form that discloses to SBA any fee paid to an agent such as a packager or broker, and a lender fee above $2,500, with the compensation agreement behind it.
- Regulation B: The federal rule, 12 CFR part 1002, that carries out the Equal Credit Opportunity Act: it bars credit discrimination on prohibited bases and sets notice rules, for business credit as well as consumer credit.
- Adverse action notice: The notice a lender must give under Regulation B when it refuses credit in substantially the amount or on the terms requested, with the reasons or the right to ask for them.
- Term sheet: A term sheet is a short written outline of the loan a lender is prepared to consider: amount, rate, term, fees and main conditions. It is usually not binding.
- Portfolio lender: A portfolio lender is a lender that keeps the loans it makes on its own books instead of selling them to an investor.
- House limit: A cap a bank sets for itself, below the legal lending limit, on how much it will hold for one borrower, one property type or one market.
- Originator: An originator is the person, or the lender, that brings in a loan request and carries it through to closing.
Sources
Every rule and outside figure above comes from one of these, opened on . Dates are the source's own. Figures from this site's data carry their own source and date beside them.
- SBA SOP 50 10 8.1, Lender and Development Company Loan Programs (Section A, Chapter 4: agents, fees and SBA Form 159), dated .
- 13 CFR part 103, Standards for Conducting Business with SBA, retrieved .
- 12 CFR 1002.2, Regulation B, definitions (creditor), retrieved .
- Interagency Guidance on Third-Party Relationships: Risk Management, 88 FR 37920 (Federal Reserve, FDIC, OCC), dated .
- 18 U.S.C. 215, Receipt of commissions or gifts for procuring loans, retrieved .
Next step: check the record
- Search lenders by state and kind of loanBuild a list of banks and credit unions that hold loans like the one you are placing.
- Loan CompsLenders that hold or made loans like a described deal, with the source of each figure.
- For brokersWhat this site offers people who place commercial loans.
Keep reading
- Deal summary builder: Turn the facts of a deal into a clean one-page summary you can copy or print. Nothing is saved or sent.
- Maximum loan calculator: The loan each test allows: DSCR, LTV and debt yield side by side, and which one binds.
- A banker's guide to working with loan brokers: Broker-sourced loans are ordinary business for many banks. Handling them well is mostly a matter of knowing who the broker is, who pays them, and keeping the credit work your own.
- How to pick banks for a deal with public data: Public filings cannot tell you which bank will say yes. They can tell you which banks are large enough, already hold loans like yours and lend where the property is. That is enough to turn four thousand banks into six phone calls.
- How to find the right person at a bank for a loan: The main number reaches a branch. A commercial loan is handled by a commercial lender, and at many banks there are only a few. Finding that person is half the work of a first contact.
- What a lender-ready loan package looks like: A lender decides in minutes whether to keep reading. A package that answers the first five questions on one page, and backs each answer with a document, gets read.
- What to do after a bank says no to a business loan: One bank's no is one lender's answer, and the reasons are yours to ask for. They usually point to a constraint you can name.
- A credit union lender's guide to working with brokers: Brokers bring loans a credit union would not otherwise see. Taking them well means four checks before credit: can the borrower join, is there room under the cap, is the loan inside the limit to one borrower, and who pays the broker.
- How to place a commercial loan with a bank: A bank loan moves through the same stages every time. Knowing them tells you what the bank needs at each point, what its answer means, and where time is lost.
Questions people ask
Who pays a commercial loan broker?
Usually the borrower, at closing, under a written fee agreement. Some banks pay a referral fee, and some arrangements have both. Whichever it is, the bank and the borrower should both know, in writing, before the term sheet.
Do I need a license to broker commercial loans?
It depends on the state and sometimes on the kind of loan. Licensing varies by state and no statute was opened for this guide, so check the rules where you work and where the borrower and property are.
Can I charge a success fee on an SBA loan?
No. SOP 50 10 8.1 says SBA does not allow an agent to charge a borrower contingency fees, which it defines as fees paid only if the loan is made or closed, or a standard flat fee charged to everyone.
Cite this
Source: The Lender Report, How a loan broker works with community banks, https://lender.report/guides/how-a-broker-works-with-community-banks/, data as of November 11, 2026.
General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.
SBA does not require you to use an agent or broker for a loan application. SBA has not reviewed or endorsed this site.
Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem