The short answer: most commercial finance brokers, including Pinks, are paid commission by the lender when a deal completes. Some also charge the client a fee. Commission is normal and legitimate, but you are entitled to know how it works and how much it is, because it can affect the rate you pay. This guide explains the models, the questions to ask, and when going direct makes more sense.
Most brokers do not write about this. We think it is one of the most important things a business owner should understand before choosing who to work with.
Who pays the broker
There are three common arrangements.
Lender commission only. The lender pays the broker when the facility completes. You pay nothing directly. This is the most common model in asset finance, vehicle leasing and much business lending.
Client fee only. You pay the broker an agreed fee, and any commission is either not taken or is passed back to you. Less common, usually seen on complex or larger transactions.
Both. The broker receives commission and charges you a fee as well, for example an arrangement or success fee. This is legitimate if it is agreed in writing before work starts.
The commission models
Pinks works with four commission models, as set out in the regulatory information at the foot of every page on this site. Different lenders use different models, and the model and amount are disclosed to you during your application.
Fixed fee. The lender pays a set amount for introducing the deal, regardless of the size of the facility or the rate.
Fixed rate of commission. The lender pays a fixed percentage. It does not change with the interest rate you are offered.
Percentage of the amount you borrow. Commission is a percentage of the facility, so a larger facility pays more commission.
Rate for risk. The lender sets your rate based on the risk profile of your business, and the commission follows from the lender's pricing rather than from the broker's choice.
Why disclosure matters: the motor finance lesson
For many years, some car finance arrangements allowed the dealer or broker to set the customer's interest rate within a range, earning more commission at higher rates. These discretionary commission arrangements were banned in motor finance in 2021. After a Supreme Court ruling in August 2025, the FCA confirmed a redress scheme on 30 March 2026 for consumers with regulated motor finance agreements taken out between 6 April 2007 and 1 November 2024 where commission was not properly disclosed.
That scheme covers consumer motor finance, not most business lending. But the lesson applies everywhere: if a broker's pay rises when your rate rises, you need to know about it. That is why we disclose how we are paid.
Does commission make finance more expensive?
Sometimes, and it depends on the model.
Where commission is a fixed fee or a fixed rate, it is usually built into the lender's normal pricing. You would not necessarily get a lower rate by going direct.
Where commission rises with the rate or the amount borrowed, a broker has a theoretical incentive to push you towards a bigger facility or a higher rate. That is exactly why you should ask.
Against that, a good broker often saves money by matching you to a lender that prices your business fairly, presenting the case properly, and avoiding unnecessary declined applications.
The honest answer is that commission is a cost of distribution, like any other. What matters is that it is disclosed, that it does not drive the recommendation, and that the broker earns it by getting you a better outcome than you would get alone.
Questions to ask any broker
How are you paid on this deal, and by whom?
Which commission model applies, and roughly how much will you receive?
Does your commission change if my rate or facility size changes?
Are you charging me a fee as well? If so, when is it payable, and is it refundable if the deal does not complete?
How many lenders do you work with for this type of finance?
Are you authorised by the FCA, directly or as an appointed representative? You can check any firm on the FCA register.
A good broker will answer all of these without hesitation. If one will not, that tells you what you need to know.
When going direct makes more sense
A broker is not always necessary. Going direct to a lender is often the better choice when:
your own bank already knows the business well and is keen to lend
the facility is small, simple and available online with instant decisions
your business has a strong, clean profile that most lenders will welcome
A broker earns their place when the case is more complex, when the right lender is not obvious, when a bank has already said no, or when structure matters as much as rate. Our guide on what to do after a bank decline covers that situation in detail.
How Pinks works
Pinks is a credit broker, not a lender, and we work with a panel of lenders whose details are available on request. We are paid commission by the lender, and we disclose the commission model, how it is calculated and the amount to you throughout your application. Our recommendation is based on what fits your business and protects your future borrowing, not on which lender pays most. Our full regulatory information appears in the footer of every page, and you can read more about our approach on the business funding page.
Frequently asked questions
Do finance brokers charge a fee?
Some do, some do not. Many are paid entirely by lender commission. If a broker charges you a fee, it should be agreed in writing before any work starts.
Is it cheaper to go direct to a lender?
Not necessarily. Lenders often price broker-introduced and direct business similarly. For straightforward cases, going direct can be simpler. For more complex cases, a broker can often secure better terms.
Do I have a right to know how much commission a broker earns?
You should be told how the broker is paid and the nature of any commission. Ask directly if it is not clear.
Does the motor finance redress scheme apply to business finance?
Generally no. It covers regulated consumer motor finance agreements. Most finance taken out by limited companies is unregulated. Disclosure is still good practice, and you are entitled to ask.
How do I check a broker is legitimate?
Search the FCA register for the firm's name or reference number. Appointed representatives are listed along with their principal firm.
Will a broker push me to borrow more?
A good one will not. If a broker suggests a larger facility than you asked for, ask them to explain why it is in your interest.
Talk it through
If you would like to know exactly how we would be paid on your deal before you commit to anything, speak to Pinks. We would rather you asked.
Pinks Associates Limited is a credit broker, not a lender. Finance is subject to status and lender criteria. Information correct as at November 2026.
