A commercial mortgage broker places your loan with lenders rather than funding it themselves, and typically charges 0.5–2% of the loan amount — often paid by the lender on bank-executable deals. The value is reach: a bank shows you one credit box, while a broker runs the same file past banks, credit unions, CDCs, life companies, agency lenders, CMBS desks, and debt funds. If your deal is clean, owner-occupied, and your bank already wants it, going direct is usually cheaper. Brokers earn their fee on declines, unusual property types, and speed.
What a Commercial Mortgage Broker Actually Does
A broker is an intermediary, not a lender. No broker funds your loan — they package it and place it. In practice the work is four things:
- Packaging. Turning your financials, rent roll, and property information into the format a credit committee expects. Weak packaging is why solid deals get declined.
- Placement. Knowing which lenders are actively quoting your property type this quarter. Lender appetite shifts constantly, and last year's best source may be closed to your asset class today.
- Structuring. Choosing between a bank first, an SBA structure, a bridge-to-perm, or a cash-out refinance — and sizing it to the constraint that actually binds.
- Managing the close. Appraisal, environmental, title, and the lender's condition list, which is where most timelines slip.
Broker vs Going Direct to a Bank
Going direct is often the right answer, and a broker who won't tell you that is selling rather than advising.
| Go direct when | Use a broker when |
|---|---|
| You have a real banking relationship and deposits | You have been declined and don't know why |
| Owner-occupied, standard property, strong financials | Special-use property — hospitality, self-storage, car wash, gas station |
| Your bank has already indicated terms | You need to close faster than a bank moves |
| You have time to shop two or three lenders yourself | The structure is non-obvious — bridge-to-perm, partner buyout, cash-out |
What a Commercial Mortgage Broker Costs
Broker compensation on commercial mortgages generally runs 0.5% to 2% of the loan amount, and scales inversely with size — a $500K deal may carry 2 points, while an $8M deal is often closer to 0.5%. Two structures exist:
- Lender-paid. The lender compensates the broker at closing. Common on bank and agency executions. Your rate is not usually loaded to cover it.
- Borrower-paid. You pay at closing, typically financed into the loan. More common on bridge, hard money, and complex placements where no lender pays a fee.
Ask two questions before you engage anyone: who pays you on this deal, and how much? Then get it in writing. A broker who won't answer plainly is the one to walk away from. Also ask about upfront fees — a modest third-party deposit covering appraisal and environmental is normal; a large non-refundable "application fee" before any term sheet is a red flag.
The Lender Types a Broker Reaches
This is the actual product a broker sells — access to capital sources you cannot easily reach one at a time.
- Banks and credit unions. Best rates for owner-occupied and strong sponsors. Recourse, and the tightest credit boxes.
- CDCs / SBA 504. ~10% down and a long-term fixed second on owner-occupied property. See SBA 504 lenders.
- Life insurance companies. The lowest fixed rates in the market for stabilized, low-leverage, institutional-quality assets. Selective.
- Agency (Fannie/Freddie). Multifamily specialists — long terms, non-recourse, competitive pricing.
- CMBS / conduit. Non-recourse and size-friendly, with rigid servicing and defeasance on exit.
- Debt funds and bridge lenders. Speed and flexibility on transitional assets, priced accordingly. See commercial bridge loans.
Rates by lender type are in typical commercial real estate loan rates.
How to Vet a Commercial Mortgage Broker
Questions worth asking:
- How many deals like mine — same property type, same size — have you closed in the last year?
- Which specific lenders will you take this to, and why those?
- What do you think the weak point of my file is? A broker who says "nothing" hasn't read it.
- What are you paid, by whom, and what is refundable if we don't close?
- Will you show me the term sheets as they come in, or a summary?
Red flags: guaranteed approval before underwriting, a rate quoted before anyone has seen your financials, large non-refundable upfront fees, and reluctance to name the lenders they intend to approach.
What to Have Ready
The file that gets quoted fastest contains, on day one: three years of business tax returns and interim financials, personal financial statements and returns for owners at 20%+, a current debt schedule, the purchase contract or existing note, a rent roll and leases for any tenanted space, and property details including year built and recent capital work. Deals stall on missing documents far more often than on credit.
To model what your numbers support before you talk to anyone, use the commercial mortgage calculator and the DSCR calculator.
Next Steps
If your bank has already quoted you and the deal is clean, take the bank quote. If you have been declined, the property is unusual, or you need to move faster than a credit committee meets, that is when placement across multiple lender types is worth what it costs. Get matched and we will tell you plainly which of those you are.
Frequently Asked Questions
What does a commercial mortgage broker do?
A broker places your loan with lenders rather than funding it themselves. The work is packaging your file the way credit committees expect, knowing which lenders are actively quoting your property type, structuring the deal, and managing appraisal, environmental, title, and the lender's conditions through to closing.
How much does a commercial mortgage broker charge?
Typically 0.5% to 2% of the loan amount, scaling down as loan size goes up — roughly 2 points on a $500K deal and closer to 0.5% on an $8M one. The fee is either lender-paid at closing, common on bank and agency deals, or borrower-paid and usually financed into the loan on bridge and complex placements.
Is it better to use a commercial mortgage broker or go direct to a bank?
Go direct when you have a real banking relationship, the property is owner-occupied and standard, and your bank has already indicated terms. Use a broker when you have been declined, the property is special-use, the structure is non-obvious, or you need to close faster than a bank moves.
What lenders can a commercial mortgage broker access?
Banks and credit unions, CDCs for SBA 504, life insurance companies, agency lenders for multifamily, CMBS or conduit desks, and debt funds or bridge lenders. Each has a different credit box, rate range, and recourse posture, and appetite shifts quarter to quarter.
How do I find a commercial mortgage broker near me?
Commercial mortgage brokering is not geographically constrained the way residential is — lenders underwrite the property and the sponsor, and most of the process runs on documents. What matters more than proximity is whether the broker has closed your property type at your loan size recently.