Loan Broker »

Loan broker describes an individual who acts as a middle man between lenders and borrowers. There are many different types of loan broker, including a business loan broker, a commercial loan broker and a mortgage broker. These different types of mortgage loan broker are categorized by the types of loan he or she specializes in. For example, a commercial loan broker is an individual who matches up businesses or individuals looking for a commercial loan and commercial lenders. In addition, there may be a commercial loan broker who only deals with businesses seeking a large loan and other brokers who specialize in very small commercial loans.

Loan brokers can be compensated by either the borrower or the lender. It is more typical for the loan broker to be compensated by the lender on a flat fee per loan or percentage of loan basis, but it is not uncommon for such an individual to be engaged by a business or individual seeking financing and paid by that person upon the closing of a successful financing. If a business or an owner of a business is seeking a business loan it is advisable to first determine whether a business loan can be obtained without using a loan broker before engaging such an individual. It is advisable to use a broker when all broker fees are to be paid by the lender because such an individual could be helpful in researching all financing options and identifying the most favorable option.