Direct Lender vs. Broker: What It Means for Your Funding

Search for business funding and most of what you find are brokers and marketplaces. They collect your application and sell it to lenders. A direct lender funds from its own capital. The distinction decides who makes the decision, who sets the price and how many people see your bank statements.

What a broker does

A broker gathers your application and statements, submits them to several funders, and earns a commission from whichever one funds the deal. The commission is built into your cost. Your file may be seen by five or ten underwriting teams, and you may receive calls from all of them for months.

What a direct lender does

A direct lender reviews your statements in-house, decides in-house and funds from its own capital. There is one point of contact, one decision and no commission layer. Belmont Capital Partners is a direct lender; the specialist who reviews your file is the person who presents the offer.

How to tell the difference

• Ask directly: 'Do you fund from your own capital?' A broker will say they 'work with' or 'partner with' lenders.
• Look at the contract. The funder's name on the agreement is the lender; if it differs from the company you applied with, you went through a broker.
• Watch the timeline. A direct lender gives a decision in minutes to hours; a broker waits on others.
• Count the calls. Multiple companies calling after one application means your file was shopped.

When a broker is useful

Very unusual situations, such as a business with no bank deposits or a need for specialized asset-based lending, may benefit from a broker's network. For the common case, a business with $20,000+ in monthly revenue that needs working capital, a direct lender is faster and cheaper.

Protecting your information

Your bank statements contain everything about your business. Sending them to one direct lender limits exposure. Sending them to a broker means they travel to every funder the broker uses.