The short version
- Commercial finance brokers are usually paid by the lender, not the borrower — an upfront commission, calculated as a percentage of the loan amount.
- Commercial commission is far less standardised than home-loan commission. It commonly sits somewhere around 0.5% to 1.5% of the loan, but varies widely by lender, product and deal size.
- A broker may also charge you a direct fee on complex or low-commission deals. That fee must be disclosed in writing, in the Credit Guide, before you commit.
- The real risk is not the commission itself — it is lender tier status. Brokers earn more, and get faster service, from their highest-tier lenders, which can quietly bias where your deal goes.
Most business owners know their broker gets paid. Few know how, how much, or by whom — and the broker rarely volunteers it. That is not always sinister: broker commission is a normal, legal part of how finance is distributed. But "normal" and "transparent" are not the same thing. The honest question is not whether your broker is paid — of course they are. It is whether the way they are paid changes which lender your deal goes to. This article explains how commercial finance brokers actually earn, where the genuine conflicts sit, and the questions that surface them.
How commercial finance brokers actually get paid
A commercial finance broker is, in almost every case, paid by the lender that funds your deal — not by you. The lender treats that payment as a distribution cost, the same way it treats running a branch network. It arrives in three forms.
Upfront commission
Upfront commission is a one-off payment from the lender to the broker when your loan settles, calculated as a percentage of the loan amount.
Unlike the residential mortgage market, where commission rates are fairly well documented, commercial commission structures vary widely and are rarely published. As a broad guide, upfront commission commonly sits somewhere in the range of 0.5% to 1.5% of the loan amount — but it depends heavily on the lender, the product and the size of the deal. A large, clean term loan and a small, complex equipment facility can pay the broker very differently.
The point for a borrower is this: the commission is funded by the lender, but it is not free money. It is a cost the lender carries, and like any cost it is reflected somewhere in the pricing of the loan — which is why the real cost of a business loan is rarely just the headline rate.
Trail commission (where it applies)
Trail commission is an ongoing annual payment from the lender to the broker for as long as the loan stays on the books — often in the order of 0.1% to 0.4% per annum of the outstanding balance.
Trail is standard on home loans and common on some asset finance. On commercial term loans it is far less consistent: many commercial products pay upfront only. Where trail does apply, it gives the broker a mild incentive to keep you with the existing lender rather than refinance you — worth being aware of when a broker reviews a facility they originally placed.
This is not a reason for alarm — trail is a small number — but it is a fair thing to raise directly. Ask whether your broker earns trail on the loan, and whether that shapes their view when a refinance is on the table. A broker who answers plainly has nothing to hide; a broker who bristles at the question has told you something.
Direct broker fees (when they apply)
A direct broker fee is a fee charged to you, the borrower, rather than paid by the lender.
It is not the norm in commercial finance, but it is legitimate, and it appears in two situations: a complex deal that takes substantial work to structure and place, or a deal where lender-paid commission is low or absent. A broker who charges a fee must disclose it to you in writing, upfront, before you are committed — in Australia that disclosure belongs in the broker's Credit Guide. A fee that surfaces late, or only in the fine print at settlement, is a red flag regardless of the amount.
If you are quoted a fee, two questions make it concrete: is it a fixed amount or a percentage of the loan, and what work does it actually cover. A fee tied to genuine structuring effort on a hard deal is reasonable; a fee with no clear rationale on a straightforward deal is not. The number itself matters less than whether it was disclosed early and explained plainly.
Why commercial finance broking is different from home loan broking
Commercial finance broking and home loan broking look similar from the outside and are regulated very differently underneath.
Home loans are consumer credit. They sit squarely inside the National Consumer Credit Protection Act — the NCCP Act — which brings a defined set of borrower protections and broker obligations. Most commercial finance does not. A loan taken wholly or predominantly for business purposes is generally exempt from the NCCP Act, which means the statutory scaffolding a homebuyer relies on is simply not there for a business borrower.
The Best Interest Duty gap (NCCP scope)
The clearest example is the Best Interest Duty.
The Best Interest Duty, or BID, is a legal obligation introduced in 2021 that requires mortgage brokers to act in the best interests of their clients when providing consumer credit assistance — and ASIC enforces it. It is a genuine, enforceable standard, and it applies to home loans and other consumer credit.
It does not apply to commercial finance. Because most commercial lending sits outside the NCCP Act, the broker arranging your business loan is generally not under a statutory best-interests obligation at all. They may be an excellent, principled broker — many are — but where that is true, it is a function of their professionalism, not a legal floor you can assume.
This is the single most important thing a business borrower can understand about broker regulation: the protection you would have as a homebuyer does not follow you into a commercial deal. It makes the broker's own standards, disclosures and professional memberships matter more, not less.
Most reputable commercial brokers are members of CAFBA, the Commercial & Asset Finance Brokers Association, or the FBAA, the Finance Brokers Association of Australia. Both maintain professional codes of conduct that go beyond the bare legal minimum. Membership is not a guarantee of quality — but its absence is worth a question.
How lender tiers can bias broker recommendations
The real conflict in broker pricing is not the commission. It is lender tier status.
Lenders rank the brokers and broker groups that send them business. The labels vary — accredited, preferred, silver, gold, platinum — but the mechanism is consistent: the more volume a broker writes with a lender, the higher their tier, and the higher their tier, the more they get. Higher tiers typically mean a better commission rate and faster, more senior credit assessment — sometimes a dedicated contact who can get a marginal deal across the line.
That creates a structural pull. A broker sitting at platinum tier with one lender has a quiet incentive to send deals there: they earn more, and the process is smoother and quicker. Neither of those things is necessarily in your interest. The lender that pays the broker best, and answers the phone fastest, is not automatically the lender that prices your deal best or structures it most sensibly — and the bank versus non-bank choice that sits underneath every commercial deal deserves to be made on its merits, not on a broker's tier status.
This is not an accusation that brokers act in bad faith — most do not. It is a description of the gravity the system applies. A good broker is aware of that pull and places deals against it. The way to find out whether yours does is to ask.
Questions every business owner should ask their broker
You can surface almost every conflict in broker pricing with six direct questions. A broker worth using will answer all of them without hesitation.
- How are you paid on this deal — lender commission, a fee to me, or both? You are entitled to a straight answer before you commit, not at settlement.
- Which lender are you recommending, and how many did you genuinely consider? "I took it to three" is a different answer from "I sent it to my usual lender".
- Do you hold a preferred or top-tier status with the lender you are recommending? It does not disqualify the lender — but you should know the relationship exists.
- Is there trail commission on this loan, and does that change your advice if I want to refinance later? Relevant whenever a broker reviews a facility they originally placed.
- Will you show me your Credit Guide and any fee disclosure in writing? The Credit Guide is the formal document; it should be offered, not requested.
- Are you a member of CAFBA or the FBAA? Not decisive on its own, but a reasonable baseline for a commercial broker.
If a broker is evasive on any of these — particularly the first and the third — that evasion is itself the answer.
How Aurelius approaches this
We are paid the way every commercial finance broker is paid: by the lender, on settlement. We are not going to pretend otherwise — the model is not the problem, opacity is.
So we set out how we are paid in writing, in the Credit Guide we publish, before you are committed to anything; and if a deal ever warrants a direct fee, you will know the number before you decide, not after. We place deals across the full panel rather than defaulting to a lender we hold tier status with, and we will tell you which lenders we considered and why we recommended the one we did. Aurelius Capital is a member of both CAFBA and the FBAA — the baseline professional memberships for a commercial broker operating in Australia. You can read more about how the brokerage is built on our about page. None of that is heroic — it is simply the disclosure a business borrower should be able to treat as standard. If that is the standard you want on your next deal, start an application.