What Fees Do Business Loan Brokers Charge UK?
George Wilks
Commercial Lead · Jun 30, 2024 · 6 min read
Fee transparency is one of the most important criteria when choosing a business loan broker. Fee models vary significantly across the market. Understanding how brokers charge, and when, helps you avoid surprises and choose a broker whose incentives are aligned with yours.
Ready to compare your options?
Check your eligibility across 100+ UK lenders in 60 seconds.
The main broker fee models
Commission-only (no upfront fee to borrower): the most common model among reputable UK brokers. The broker is paid a commission by the lender on completion, typically 1% to 3% of the loan amount. This commission is disclosed in your loan documents before you proceed. You pay nothing unless and until your loan completes. This model aligns the broker's incentive with yours: they only earn when you fund.
Upfront retainer plus completion fee: some brokers charge an upfront fee (typically £500 to £5,000) to cover search and advisory costs, plus a completion fee. This model is more common in complex structured transactions, property finance, or trade finance where significant advisory work is required before a lender can be engaged. Any upfront fee should be agreed in writing in advance with a clear description of the work covered.
What to ask before working with a broker
Ask directly: do you charge any fees to borrowers? If so, when are they due and what do they cover? Is any fee refundable if no loan completes? All of this should be confirmed in a written engagement letter before you share any confidential information. FCA authorised brokers are required to disclose their remuneration clearly before you proceed with an application.
Spark Finance charges no fees to borrowers. Our revenue comes entirely from lender commission paid on completion, which is disclosed in your loan documents. This means you can use our service, receive competing offers, and decide whether to proceed without any cost or commitment.
"Any broker that asks for money before your loan completes should be able to explain in plain terms exactly what that fee covers and what happens to it if nothing funds. If the answer is unclear, treat that as a warning sign."
- George Wilks, Commercial Lead
Frequently Asked Questions
Is it normal for a business loan broker to charge an upfront fee?
It is not unusual for complex transactions, but it is not the norm for standard business loans. Most reputable brokers operate on a commission-only model for standard unsecured and asset finance transactions. If asked for an upfront fee, request a written explanation of what it covers and confirm the refund policy if no loan completes.
The bottom line
Spark Finance operates on a no-upfront-fee model. We are paid a commission from the lender when your loan completes, disclosed fully before you proceed. Start at apply.sparkfinance.co.uk.
Check your eligibilityAbout the author
George Wilks
Commercial Lead
George leads commercial relationships at Spark Finance, specialising in property-backed finance including bridging loans, development finance, and commercial mortgages. He works with investors, developers, and owner-occupiers to structure short and long-term property finance.
