SBA Loan Broker Fees

searcher profile

February 07, 2025

by a searcher from Northwestern University in Melbourne, FL, USA

Can we settle this concern once and for all?? Is it FREE to use a loan broker for an SBA loan? I keep seeing comments like “The bank pays us, so our service is 100% FREE to you as the borrower.”

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commentor profile
Reply by a lender
from University of Southern California in Los Angeles, CA, USA
Haha, I think you quoted me! I say, “100% free service to borrowers” all the time. Yes, using our service is completely free for borrowers. We get paid by the lender, not from your loan proceeds.

A good SBA loan broker should never charge borrowers directly. The real advantage of working with a broker is that we navigate the credit boxes of multiple banks, ensuring you get the best possible rate and terms. The savings can range from 0.5% to 2% in annual interest—savings that would be significantly reduced if you paid out of pocket for a broker.

We refer a high volume of deals, which means we can often get a quicker yes or no, saving you time and hassle. It’s a win-win-win: the bank gets a fully packaged loan, you get better rates and terms, and we get paid by the lender. We work with all major SBA lenders and are highly effective at what we do.

You can reach me here or directly at redacted You can also click here to schedule a meeting with me: https://cal.com/ishan-jetley-3d73m8/30min. Look forward to chatting!
commentor profile
Reply by a lender
from University of Missouri in St. Louis, MO, USA
Hi Ryan, Confirming that the actual fee is paid by the bank to the broker(s). To elaborate why we would do this; we sell off the guaranteed portion of the loan (usually) and collect a large fee. This is how a bank can justify paying a fee on SBA loans whereas that would be difficult on a conventional loan or an SBA loan that is held on the books. It is also why you will hear lenders say that there is no fixing a rate on SBA loans. That isn't accurate. The SBA is fine with fixed rates but there is little/no market to buy a fixed rate loan so most banks want to float the rate. The question Tom Hogans alluded to above is the nuance. Individual banks may charge more if they pay a fee. However the only way to do this would be to increase the interest rate. That is pretty easy to see though when you and your broker compare rates.
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