Does your commission affect the terms or rates I’m offered by lenders?
Short answer
In most commercial lending situations, the commission paid to a broker or introducer does not directly change the headline interest rate set by a lender. Lenders primarily price loans based on credit risk, collateral, sector, and market conditions, not the fee an introducer receives.
However, commissions can influence overall cost and the options presented to you in specific circumstances, so it’s important to ask for transparent breakdowns and comparisons before you accept any offer.
How broker and introducer commission structures work
Commercial brokers and introducers commonly earn fees in two main ways: lender-paid commission (a percentage of the loan or facility) or client-paid fees (fixed or success-based). Lender-paid commission is often built into the lender’s business model and paid after a deal completes.
Client-paid fees are agreed up-front and are separate from the lender’s pricing; these fees pay for time spent preparing applications, negotiating terms, and arranging documentation. Some brokers combine both models, with regulatory or contractual rules determining which applies for a given product.
Introducers such as Best Business Loans act as matchmakers and do not underwrite loans, set interest rates, or retain lender funds. We connect you with lenders and brokers who match your profile and funding needs, while remaining transparent about our role and any fees involved.
Why lenders mostly set rates by credit factors, not commission
Lenders price facilities by assessing the borrower’s financial strength, trading history, industry sector, security (assets or invoices), loan-to-value or advance rates, and the lender’s own funding costs. These credit and capital factors are the primary drivers of interest rates and fees.
Regulated lenders, especially in consumer credit, must meet strict disclosure rules and cannot disguise commission as higher rates without clear client information. For commercial finance there is more variation, but professional lenders still focus on risk and return rather than the introducer’s commission when setting the headline rate.
Where markets are competitive, margin compression can occur and lenders may share a portion of their origination capacity as commission to brokers without materially changing borrower pricing.
Scenarios where commission can indirectly affect what you pay
Although commission rarely directly alters a published rate, there are practical scenarios where it affects the outcome you see. For example, a lender may offer a lower headline rate to brokers who bring repeat, high-quality business and accept a smaller net margin, effectively subsidising a portion of the cost.
Conversely, some brokers may add a handling fee or uplift on top of the lender’s price for arranging complex deals or for added services, and this additional charge will increase your overall cost. Always ask whether any uplift is being added and whether it is refundable if a deal does not complete.
Another situation is blended pricing in packages, where arrangement fees, upfront commissions, or facility fees are incorporated into an effective interest rate. If you’re considering invoice finance, for example, compare annualised costs including fees — see this practical overview of invoice finance to understand typical cost components: https://bestbusinessloans.ai/loan/invoice-finance/.
How to ensure commissions don’t lead to unexpected costs
Ask for an itemised quote from both the lender and the broker before you proceed. The quote should show the headline interest rate, arrangement or facility fees, any broker uplift, whether commission is lender-paid or client-paid, and the total annualised cost.
Request a Decision in Principle (DIP) or Indicative Offer that clearly states all fees and terms, and compare at least two independent offers where possible. A direct comparison helps reveal whether one provider’s rate is genuinely better or simply presented differently due to commission structure.
Where regulation applies, ensure the provider complies with the relevant transparency rules and that any promotional material is fair, clear and not misleading. If a quote seems low but lacks clear fee disclosure, treat it with caution and seek clarification in writing.
Practical steps, rights and how Best Business Loans helps you
Your rights include receiving clear information about fees and commission where applicable, and the ability to request a full breakdown before you agree to proceed. If you feel a commission arrangement has not been properly disclosed, you can ask for written confirmation and escalate to a compliance contact within the lender or broker firm.
Best Business Loans is an independent introducer and does not lend. Our role is to speed up matching and to introduce you to lenders and brokers who are a good fit for your business. We encourage you to complete a Quick Quote so our AI can identify options tailored to your profile and highlight transparent fee structures.
To protect your interests, we recommend you: request written fee schedules, compare total annualised cost across offers, confirm whether commission is included in lender pricing or charged separately, and insist on a Decision in Principle. If you’d like to start, submit a Quick Quote and we’ll match you to providers who meet your needs.
Key takeaways
1) Commission rarely changes a lender’s headline rate — lenders mostly price by risk and market funding costs. 2) Commission arrangements can affect the total cost you pay through uplifts, arrangement fees or blended pricing, so always ask for itemised quotes. 3) Ask for a Decision in Principle, compare offers, and request written disclosure of any commission or broker fee.
Best Business Loans helps UK businesses get clear, comparable information and connects you to lenders and brokers who disclose fees up-front. Submit a Quick Quote to begin an eligibility check and get matched to suitable providers with transparent pricing.
Ready to compare transparent quotes? Submit a Quick Quote for a free eligibility check and to see lender and broker offers that disclose fees and commission clearly. We don’t lend — we help you find the right finance solution quickly and fairly.