Whether you’re exploring asset finance or looking for the best loan options, staying informed is the key to making smart financial decisions. But let’s be honest – finance can feel like a maze, and not all brokers are as transparent as they should be.
More businesses than ever are relying on brokers to secure funding, and while the vast majority are reputable, some may not be entirely up to date with their disclosure requirements, leaving clients uncertain about the true costs involved. Understanding financial arrangements fully can be the difference between securing a great deal or getting locked into something unsuitable. So how do you ensure you’re getting the right advice? By working with brokers who value honesty, transparency, and trust.
Why transparency matters
When it comes to funding your business, clarity is everything. You need to know exactly what you’re signing up for – terms, fees, commissions, the works. A good broker will lay it all out on the table, making sure you’re equipped with the facts, not just the sales pitch. Transparency builds trust, and trust leads to better long-term financial outcomes.
Following recent cases in commission transparency, lenders now disclose the commissions paid to brokers to clients. Brokers should now be disclosing their commission arrangements to clients prior to this point as well, usually early on in the form of percentage fees charged or the actual fee once it is calculated on the facility you are being offered.
How does broker commission actually work?
Lenders offer brokers a set of terms for the finance facilities they provide to clients. These have base rates. Brokers then add an additional rate element to these base rates as their commission to reflect the work they do in pulling together the finance proposal and managing it through the chosen finance provider. This is usually in the form of a percentage of the amount financed.
Without transparency in this area, businesses can find themselves tied into agreements they don’t fully understand, perhaps realising too late that there were better options available. The financial world is complex enough without added confusion, which is why working with an open and professional broker makes such a difference.
Unfortunately, not all brokers work this way. While many prioritise client success, some may steer businesses towards deals that benefit their commission more than their clients. This is why it pays to do your homework and choose a financial partner who is upfront about their earnings and genuinely invested in your best interests.
How do I compare services and solutions from brokers?
Firstly, consider the overall cost of the offer. Not all brokers use all available lenders, so the final overall cost of the option being provided to you is still the first comparison to consider.
Secondly, where you are being offered options that are fairly similar, you should ask what commission your broker is making. This is currently a discretionary amount the broker can select. It may be possible to negotiate this amount on a deal-by-deal basis. However, some brokers will have policies on commission rates and percentages, and if they do, they will have disclosed these to you in advance. They usually apply a consistent approach to all their clients in similar situations.
A broker who knows their apples
A common misconception is that working with a broker means paying more than going directly to a lender. But in reality, a knowledgeable broker has access to a broader range of financial products and can often secure better rates and terms than you’d get on your own. Plus, they handle the legwork – negotiating, paperwork, liaising with lenders – saving you a headache and a heap of time.
Reputable brokers work to find financial solutions that suit the specific needs of each business. They take the time to understand their clients’ goals, financial circumstances, and long-term plans before recommending any products. Their job isn’t just to get a deal done – it’s to ensure the deal is right.
Where a sole lender experience is being suggested by a franchise brand and you are being directly linked up with just one lender, make sure you check that this is the best option available in the market for you. All clients are different, and there are nearly always multiple options to consider.
Businesses must be vigilant. Brokers who prioritise commission over client success can leave businesses with financial products that don’t align with their needs. Franchisors that “propose” only one lending provider may mean franchisees miss out on more appropriate solutions. Being informed and asking the right questions is crucial.
How to spot a trustworthy broker
A top-notch broker should be:
- Crystal clear on costs – no hidden fees, no nasty surprises. Everything should be explained upfront, in plain language.
- Experienced in the industry – they should know their stuff, with a track record of securing the right deals.
- Well-reviewed by clients – check testimonials and reviews. Happy clients usually mean good service, but be aware that the cost of that broker’s services may not have been visible to the reviewer at the time.
- Compliant and ethical – they should follow industry regulations and best practices. If a broker is reluctant to discuss their commission or affiliations with lenders, that’s a red flag. It is strongly recommended that you select brokers who are members of the National Association of Commercial Finance Brokers (NACFB).
A good broker will always prioritise long-term client relationships over short-term gains. The best brokers build trust over time, proving their value by consistently delivering great results. Ask how they will support you going forward.
Transparency as a growth strategy
Being open about financial arrangements isn’t just good ethics – it’s smart business. When businesses work with transparent financial partners, they can plan more effectively, as clear costs lead to better budgeting and resource allocation. Having the right financial solutions in place improves returns.
With access to the right financial products and a broker with the highest professional standards guiding the way, businesses can make decisions with confidence, secure in the knowledge that they are getting the most suitable facility possible.
The future of finance: no more smoke and mirrors
The demand for transparency in finance is only growing. Businesses are becoming more aware of the importance of working with ethical brokers, and regulators are increasingly scrutinising financial practices to protect clients.
This shift towards openness benefits everyone. Transparency on commissions and fees helps businesses navigate financial requirements with confidence. Brokers who build lasting client relationships based on trust will be easier to identify as the finance industry becomes stronger and more reputable.
At the dt group, we believe you deserve nothing less than full financial clarity. No jargon, full upfront fee disclosure, and just honest, straightforward advice to help you make the best financial decisions for your business.
After all, finance should be about opportunities, not obstacles. Let’s navigate them together.
