Commercial loan broker fees commonly range from 0.5% to 2% of the loan amount, depending on loan size, complexity, and program. On a $1 million loan, that range equals $5,000 to $20,000. The borrower commonly pays the agreed commission when the loan closes, although some transactions use lender paid compensation or another written arrangement. The broker agreement should identify the fee, who pays it, when it becomes due, and whether any amount is owed if the loan does not close. A broker fee is separate from lender charges and commercial loan servicing fees.
Some brokers also receive yield spread premiums or lender paid compensation, similar to how residential mortgage brokers are sometimes compensated. In these arrangements, the lender pays the broker for bringing them a qualifying deal, which can reduce or eliminate the fee paid directly by the borrower. The specific compensation structure should always be disclosed and agreed upon before the broker begins working on the deal. Transparency in fee disclosure builds trust with borrowers and ensures there are no surprises at the closing table.
What does a commercial loan broker do? A broker packages the request, identifies potential lenders, compares term sheets, helps manage due diligence, and coordinates the financing process through closing. For borrowers evaluating commercial loan fees, the key question is whether the broker's access to better terms, faster execution, and deal structuring expertise creates value that exceeds their fee. A broker who secures a better rate or structure can create meaningful savings, but no broker can guarantee a loan approval, rate, or closing.
Broker compensation also varies by loan type. SBA deals, which involve significant documentation and a longer approval process, may command higher fees relative to deal size because of the work involved. Bridge loans and private placements, where speed and lender sourcing are the primary value propositions, also tend to carry higher fees. Conventional commercial mortgages placed with banks or agency lenders may have lower fees because the process is more standardized. Understanding the fee landscape helps borrowers evaluate whether a commercial mortgage broker fee is reasonable for the transaction they are pursuing.
Commercial loan brokerage is generally success fee work. If the loan does not close, the broker typically earns nothing, regardless of how many weeks went into packaging the file, sourcing lenders, and negotiating term sheets. A conventional commercial mortgage takes 45 to 90 days from engagement to closing, and a broker may run that entire process on multiple deals that die in underwriting before one funds. A broker's commission is not the same as personal take home income: commission splits, business expenses, and the time spent on deals that do not close affect what an individual broker earns.
Compensation disclosure rules differ sharply from residential mortgage lending. Residential mortgage originator pay is governed by RESPA and TILA compensation rules, while commercial broker fees are set by private contract between broker and client. The main exception is SBA lending. When a commercial broker is paid in connection with an SBA 7(a) or 504 loan, that compensation is disclosed on SBA Form 159, the Fee Disclosure and Compensation Agreement, signed by the borrower, the SBA lender, and the agent. If the fee exceeds $2,500, the broker must also provide itemized documentation of the work performed and hours billed. For borrowers, the practical takeaway is the same across loan types: a reputable commercial broker puts the fee structure in a written agreement before work begins, whether or not a regulator requires it.