Guide · Applying without getting burned
How do business funding brokers get paid, and does it cost you?
By Alex Makowski Published
Not by you. Introducers in this market are paid by the funding side — some per application introduced, some as a commission when a deal funds — and both arrangements are ordinary. What is never ordinary is being asked for money before you have any: an application fee, a processing fee, an insurance deposit. That is the oldest scam in this industry.
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01
How the money actually moves
Money flows from the funding side, not from you. Depending on the arrangement, an introducer is paid when it passes on a qualified application, or when a funder writes the deal, or both.
The commission is a real cost and it is reflected in your pricing, in the sense that a funder prices a brokered deal knowing it pays a commission on it. That is worth understanding, not worth hiding.
Which is why the question worth asking is not whether someone is paid — everyone is — but who pays them, how many parties end up with your details, and whether they will tell you both without hedging.
02
The advance-fee scam
The pattern is always the same: an approval that seems too good, then a fee required before release. It is described as insurance, a processing charge, a first payment, or a good-faith deposit.
Legitimate funding takes fees out of the advance or builds them into the terms. Nobody needs money from you before you have money from them.
If you have paid one, report it to the FTC. It is a common enough fraud that reporting genuinely feeds enforcement.
03
What to ask any broker
Who pays you, and how much on this deal? A straight answer is a good sign; evasion is information.
How many funders will see my application, and will you tell me which? You are entitled to know where your details go.
How many companies will end up with my details, and can you name them? This is the question that actually predicts how many calls you get, and it is the one evasive operators dislike most.
Is there any fee I pay directly, in any circumstance?
Written by
Alex Makowski, Owner
Alex Makowski owns and runs Business Loans for America and has been placing funding for U.S. small businesses since 2021. Businesses he has worked with have secured $50M+ in financing across 1,200+ placements. He writes and reviews every guide on this site.
FAQ
Related questions.
- Does using a broker cost me more than going direct?
- Not usually in a way you can capture — funders price brokered and direct deals from the same sheet, and a broker shopping several funders often produces a better offer than one direct approach.
- Are any upfront fees legitimate?
- In small-business funding of this kind, essentially none. Some SBA and commercial mortgage processes have genuine third-party costs, but a broker asking for money to release an approval is not one of them.
- How do I check someone is real?
- Ask for the legal entity name and address, look for a real privacy policy naming who data is shared with, and search the name alongside the word complaint before you send anything.
Guides
More on applying without getting burned
After you apply
Verification, then underwriting, then offers — usually inside a day.
What must be disclosed
A dozen states now require the numbers in writing, before you sign.
What the FTC found
A $20.3m judgment, and a list of the practices that produced it.
Making them tell you why
Business applicants have a right to reasons. It is narrower than the consumer version and almost nobody uses it.
What documents do you need for a merchant cash advance?
Will applying for business funding get you flooded with calls?
Sources
- Federal Trade CommissionEnforces against deceptive practices in small-business lending and marketing.
- FTC — Report FraudWhere to report advance-fee and business-funding scams.
- Consumer Financial Protection BureauFederal consumer-finance regulator. Publishes guidance on credit terms and disclosure.
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