Parties
Broker vs adviser
A broker is paid commission by the lender that wins the deal. An adviser is paid by you. That single difference decides whose side each is on when the terms are being set.
Also called commercial finance broker · debt broker · debt adviser vs broker · is a broker free
Follow the money. Whoever pays the fee is the party the incentive points toward.
| Intermediary | Paid by |
|---|---|
| Commercial finance broker | Winning lender |
| Debt adviser | The borrower |
Source: /guides/debt-adviser-vs-broker. A trade-off, not a ranking.
The difference in one line
A commercial finance broker is typically paid a commission by the lender that wins the deal. A debt adviser is paid by the borrower. Everything else follows from that.
It is not a claim about integrity. Good brokers and poor advisers both exist, and the roles are different jobs rather than the same job done well or badly. But an intermediary's economics tell you which outcomes make them money, and that is worth knowing before the terms are being negotiated rather than after.
How an adviser is paid
By the borrower, openly. The shape across the UK mid-market is a modest retainer that covers the work, plus a success fee payable only when the financing completes, set as a percentage of the facilities raised.
On lower-mid-market deals of £3-15m that success fee sits at roughly 1 to 2% by market convention. The percentage falls as the deal grows, and the retainer is commonly credited in full against it at close.
Every line of it is visible to you before you sign. That visibility is the point: you can compare it, negotiate it, and decide whether it is worth paying, in a way you cannot with a payment you never see.
On a £6m raise, an adviser's fee is visible before you sign. A broker's commission is real money you never see quoted.
| Basis | Amount |
|---|---|
| Adviser at 1% | £60k |
| Adviser at 2% | £120k |
| Broker commission at 1pt | £60k |
Illustrative on £6m using the published 1-2% success-fee convention. Broker commission shown at one point purely as an illustration; the guides publish no commission band. Derived arithmetic.
How a broker is paid
By the lender that wins the deal, usually as a percentage of the loan, and often on the lender's standard terms rather than a figure the borrower sets.
Because the payment comes from the lender, the service can be, and frequently is, presented to the borrower as free. Sometimes the commission is disclosed and sometimes it is not.
Whether it is disclosed is the question worth asking first. The commission is real money either way. Free at the point of use is not the same as free, and a fee funded out of the facility's economics is a fee the borrower pays, just not on an invoice.
What the payer alignment changes
Three things, in practice.
Which lender wins. An intermediary paid by the winning lender has an interest in a lender winning, and in the lenders on their panel being the ones who can win. An intermediary paid by the borrower has an interest in the best terms available, including the possibility that the answer is to borrow less or not at all.
How hard the terms are pushed. Negotiating a lender's margin down reduces a commission calculated on the lender's economics and does not reduce a borrower-paid success fee calculated on the facility raised. The incentives point in opposite directions on precisely the question that costs the borrower most.
What happens when the right answer is no deal. A borrower-paid adviser can tell you the terms on the table are not worth taking. An intermediary paid only on completion is being asked to advise against their own fee.
Panel against whole of market
A broker places from a panel: the set of lenders they have relationships and commission arrangements with. That panel is often extensive and the access is real, particularly at the smaller end where the products are commoditised and the panel covers most of what exists.
A whole-of-market process approaches whoever fits the credit, including lenders with no intermediary arrangement at all. At £3-15m that difference matters more, because the lenders who fit a structured raise are fewer, more specialised, and less likely to sit on a general panel.
The question to ask either way is the same: how many lenders will see this, who are they, and is anyone excluded because of how you are paid.
The two roles fit different ends of the market. Below £1m the broker is often right; at £3-15m it is not close.
| Raise | Better fit |
|---|---|
| Sub-£1m commoditised product | Broker |
| Straightforward secured loan | 30–55 on the scale |
| Structured £3-15m raise | 60–85 on the scale |
| Acquisition or covenant-heavy | Adviser |
Published: a broker is often the right tool for a sub-£1m facility; a structured £3-15m raise is adviser territory.
When a broker is the right answer
Often, and this is not a grudging concession.
For a sub-£1m facility, or for a commoditised product where the terms are essentially standard, a broker is frequently the right tool. Asset finance on a piece of equipment, an invoice discounting line, a small secured loan: these are products selected rather than negotiated, the panel covers the market, and paying an adviser a retainer to run a process would cost more than the process could save.
Speed is a genuine advantage too. A broker with a panel and a standard information pack can place a straightforward facility considerably faster than a competitive process runs.
The line is roughly where terms stop being selected and start being negotiated. Below it, access and speed are what matter. Above it, the covenant package, the definitions and the structure are where the money is, and those are not on any panel.
What to ask before engaging either
Four questions, and they work on both.
Who pays you, and how much. If the answer is the lender, ask whether the amount will be disclosed to you, and ask it before you engage rather than at completion. If the answer is me, ask for the retainer, the success fee percentage, whether the retainer is credited, and what happens if no deal completes.
How many lenders will see this, and are any excluded. Ask specifically whether any lender who might fit is outside their arrangements.
What happens if the right answer is not to borrow. The response tells you a great deal.
And what exactly you are getting: an introduction, or a run process with a pack, a shortlist, comparison on all-in cost and negotiation of the terms. Both are legitimate services. They are not the same service and should not cost the same.
Regulation, and what it does not cover
One point that surprises borrowers. Lending to a company for business purposes is generally outside the FCA's consumer credit perimeter, so a firm arranging a corporate facility at £3-15m is frequently not carrying out a regulated activity at all.
That means the consumer-facing protections people associate with mortgage or retail credit intermediation, including rules on commission disclosure, do not automatically apply to a corporate raise. Whether an intermediary is authorised for something else tells you little about the corporate work.
The practical consequence is that disclosure is a matter to ask about rather than to assume. Nothing here is a statement about any particular firm's regulatory status, and a borrower who wants certainty should check the FCA register and ask directly what, if anything, the firm is authorised for.
Common questions
What is the difference between a debt broker and a debt adviser?
Who pays them. A commercial finance broker is typically paid a commission by the lender that wins the deal, usually a percentage of the loan and often on the lender's standard terms. A debt adviser is paid by the borrower, through a retainer plus a success fee on completion. That single difference decides whose side each is on when terms are set.
Is a broker really free?
Free at the point of use is not the same as free. The commission is paid by the lender out of the facility's economics, which is money that ultimately comes from the transaction rather than from nowhere. Sometimes it is disclosed and sometimes it is not, and whether it is disclosed is the question worth asking first.
What does a debt adviser charge?
A modest retainer covering the work plus a success fee payable only on completion, set as a percentage of facilities raised. At £3-15m that success fee is roughly 1 to 2% by market convention, the percentage falls as the deal grows, and the retainer is commonly credited in full against it at close.
When should I use a broker instead of an adviser?
For a sub-£1m facility, or a commoditised product where terms are essentially standard: asset finance on equipment, an invoice line, a small secured loan. There the panel covers the market, speed matters more than structure, and paying a retainer to run a competitive process would cost more than it could save.
Does it matter that a broker places from a panel?
More at £3-15m than below it. At the smaller end panels cover most of what exists. On a structured raise the lenders who fit are fewer and more specialised, and less likely to sit on a general panel. Ask how many lenders will see it, who they are, and whether any are excluded because of how the intermediary is paid.
Why does who pays affect the terms I get?
Because negotiating a lender's margin down reduces a commission calculated on the lender's economics, while leaving a borrower-paid success fee on facilities raised untouched. The incentives point in opposite directions on the question that costs a borrower most. It also changes what happens when the right answer is not to borrow at all.
Are debt brokers regulated in the UK?
Lending to a company for business purposes is generally outside the FCA's consumer credit perimeter, so arranging a corporate facility at £3-15m is frequently not a regulated activity. The consumer protections people associate with mortgage intermediation, including commission disclosure rules, do not automatically apply. The FCA register settles it, and the question is worth asking directly rather than assuming.
What should I ask before engaging an intermediary?
Who pays you and how much; whether a lender-paid amount will be disclosed. How many lenders will see this and whether any are excluded. What happens if the right answer is not to borrow. And precisely what you are buying: an introduction, or a run process with a pack, a shortlist, comparison on all-in cost and negotiated terms.
The full treatment sits in the guide: debt adviser vs broker.
This page explains a term as it is used in the UK lower-mid-market. It is general information, not advice on any particular facility. Terms vary between lenders and between deals, and the drafting in your own agreement governs.