2% – 15% of the amount funded
Paid by: The funder, out of your advance
Priced into the factor rate. A higher commission means a higher payback, and the two are never shown separately.
Packaging and referral fees, itemised
Paid by: You or the lender — the form says which
Nothing, by regulation. SBA Form 159 requires it and both you and the lender sign it.
1% – 5% of the amount financed
Paid by: The lender, via rate markup
The funder quotes a buy rate; the broker adds points to reach your sell rate. You are shown only the sell rate.
10% – 15% of the factor's fee, monthly, for the life of the relationship
Paid by: The factor, out of its discount
It is recurring. A factoring broker keeps earning every month you factor, for as long as you factor.
1% – 3% of the facility
Paid by: Usually the lender
Folded into origination or arrangement fees on your closing statement.
Ranges compiled from publicly published broker and ISO program terms. Individual arrangements vary widely and some funders pay materially more than the top of these ranges. These are industry figures, not Transparent’s fees.
The SBA already solved this. For one product.
If you take an SBA 7(a) loan, anyone paid to help you get it must be named on SBA Form 159 — the Fee Disclosure and Compensation Agreement. It captures packaging fees, consulting fees, broker and referral fees. You sign it. The lender signs it. And where the compensation exceeds $2,500, the agent has to attach an itemised explanation of the work performed, the hourly rate, and the hours spent.
That is a real standard, and it exists because the government concluded borrowers were being charged fees they could not see. It applies to one product. Take the identical business to a merchant cash advance and no equivalent disclosure exists at all — the commission is simply priced into your factor rate.
A broker earning 9% on a $200,000 advance takes $18,000 out of that transaction. You will not find that number on any document you sign. It arrives as a slightly higher payback, and it is indistinguishable from the funder’s own margin.
What we do about it
We apply the Form 159 standard to every product we place, not just the one where it is mandatory.
- You see our compensation in writing before you sign — the amount, who pays it, and on the same page as your terms.
- Every product, not just SBA. Equipment, factoring, ABL, contract finance, bridge. The disclosure does not depend on whether a regulator is watching.
- We show the rate annualized, so you can tell what the money costs independently of what we make.
- We do not originate cash advances, which removes the single largest conflict in this industry — the product that pays brokers the most is the one that costs you the most.
There is no application fee, no retainer and no charge for the underwriting memo or the package we build from it. Transparent is paid a success fee of 2% of the facility, owed only if one closes. On SBA transactions that fee is disclosed on Form 159, signed by you and by the lender. Where a lender pays us instead, we tell you the amount in writing on the same page as your terms.