Quick answer: The referral fee is paid for making an introduction—no brokering. The broker split is earned for actively placing the deal—sourcing, matching lenders, documentation. Referral partners earn 25–40% of the fee; brokers earn more (2–5 points) because they do the work. Refer when you can't or don't want to broker; broker when you can. See referral agreement for referral terms.
Last updated: March 2026
Compensation
Referral fees and broker splits are both ways to earn from commercial finance deals—but they're different. Referral partners earn for making an introduction; brokers earn for placing the deal. This guide explains the key differences, compensation structures, and when to use each model.
A referral fee is paid for making an introduction. The referrer does not broker, structure, or place the deal.
Referral partners introduce borrowers to financing partners. The financing partner evaluates the opportunity, matches it to lenders, and handles placement. The referrer receives a fee when the deal closes—typically 25–40% revenue share or 0.5–2 points on funded amount.
Effort: low. A referral takes 15–30 minutes—identify the borrower, make the introduction, send basic info. No brokering, documentation, or lender matching. See making money as a referral partner for the process. Payment is typically within 30 days of funding. See when referral commissions are paid for timing. Referral partners who refer consistently build recurring income—the cumulative effect creates a residual-like stream. See residual income in commercial lending for pipeline strategies.
Who uses referral: CPAs, equipment dealers, business consultants, fractional CFOs, and brokers who refer overflow or declined deals. See referral fee structures for how compensation is structured.
A broker split is the share of the fee the broker earns for actively placing the deal.
Brokers source deals, match lenders, negotiate terms, and manage documentation. They typically earn 2–5 points on funded amount—or a significant share of the lender fee. A $300,000 deal at 3 points generates $9,000 for the broker.
Effort: high. Brokering involves application review, lender matching, term negotiation, documentation, and closing coordination. See how brokers place loan deals and how broker splits work.
Who uses broker split: Full brokers who have lender relationships and capacity to place deals. Brokers may also have a split with their firm—e.g., 70/30 or 80/20—depending on the arrangement.
| Factor | Referral Fee | Broker Split |
|---|---|---|
| Compensation | 25–40% of fee | 2–5 points (full fee) |
| Effort | Low (intro only) | High (full placement) |
| Per-deal income | Lower | Higher |
| Brokering | None | Full |
| Typical users | CPAs, dealers, consultants | Full brokers |
On a $300,000 deal: referral at 35% might yield $2,625–$4,375; broker at 3 points yields $9,000. See business loan broker earnings and average business loan referral fee for typical ranges. The trade-off is effort: referral takes 15–30 minutes; brokering takes 5–15 hours. Per-hour efficiency can favor referral when capacity is limited. Many brokers do both—broker fits, refer overflow and declined—to maximize total income.
Refer when: The deal doesn't fit your lender panel. You're at capacity. The deal was declined elsewhere and needs a second look. The product is outside your specialty (e.g., you're equipment-focused, deal is SBA). You don't want to broker—you want passive income. See declined business loans and where brokers send declined deals. A signed referral agreement is required before submitting. See referral agreement for terms. Brokers who refer overflow preserve opportunities without adding brokering workload.
Broker when: The deal fits your panel. You have capacity to place it. You have lender relationships for the product. You want to maximize per-deal income.
Many brokers do both: Broker deals that fit; refer overflow and declined. A signed referral agreement enables the referral path. See referral partner earnings for earnings by volume.
Brokers sometimes refer deals instead of brokering them—and still earn broker-level fees on some deals. The hybrid model: broker deals that fit your panel and support full fees; refer deals that don't fit or that were declined elsewhere. Your total income = broker fees from placed deals + referral fees from referred deals.
Referral agreements typically include prospect protection and non-circumvention terms so the financing partner can work the deal without the referrer brokering it later. See non-circumvention referral agreements and referral agreements explained for key terms. The hybrid approach maximizes total income while respecting agreement terms. Payment for referral deals is typically within 30 days of funding. See when referral commissions are paid for timing. Brokers who refer overflow and declined deals preserve opportunities that would otherwise be lost—and earn income without adding brokering workload. See declined business loans for second look options.
FAQ
A referral fee is paid for making an introduction—the referrer does not broker the deal. A broker split is the share of the fee the broker earns for actively placing the deal: sourcing, matching lenders, documentation. Referral partners earn 25–40% of the fee; brokers earn more (often 100% of their fee or a split with their firm) because they do the work.
Yes, per deal. Referral partners earn 25–40% of the fee; brokers typically earn 2–5 points or a larger share. But referral partners do no brokering—they just introduce. The trade-off is effort vs. passive income per deal. On a per-hour basis, referral can be highly efficient—15–30 minutes per introduction vs. 5–15 hours per brokered deal. Volume matters for total income.
Refer when: the deal doesn't fit your panel, you're at capacity, the deal was declined elsewhere, or the product is outside your specialty. Broker when: the deal fits your panel and you have capacity to place it. Many brokers do both—broker fits, refer overflow and declined.
Referral agreements typically define the relationship: you refer, they place. If you want to broker some deals and refer others, you may need separate arrangements. The key is clarity—referral agreements include prospect protection and non-circumvention terms. See non-circumvention referral agreements for how these protect both parties.
Sign a referral agreement with a financing partner before submitting any deals. Identify borrowers who need financing—clients, declined buyers, overflow—and make the introduction. The partner handles placement; you earn when deals close. See making money as a referral partner for the step-by-step process and referral agreement for terms.
Ready to earn referral fees?
Review the referral agreement and submit opportunities for evaluation. 35% revenue share when deals close.
