“Get busy living, or get busy dying.”
— Andy Dufresne, The Shawshank Redemption (1994)
There’s a hard truth every small business owner needs to hear: commercial loan brokers are ripping you off, and the worst part? You’re letting them do it.
Sure, on the surface, brokers seem like the easy solution. They promise to connect you with lenders and streamline the process, all while claiming to save you time and hassle. You probably even think that by being connected to multiple lenders that they’ll compete for your business—driving down your cost of capital. The reality, in most cases, couldn’t be further from the truth.
Because what the broker doesn’t tell you is how much it’s actually costing you—and it’s not just a few extra bucks. It’s thousands, even tens of thousands of dollars that could have stayed in your pocket or been reinvested into your business.
Let’s break it down.
How Brokers Make Their Money (Hint: It’s Not by Helping You)
Brokers get paid through commissions, and these commissions are often shockingly high. The more money they push you to borrow, the more they rake in. Does that mean they have your best interest in mind? Absolutely not. In fact, brokers are often incentivized to push the highest-cost loans they can get approved, because that’s how they maximize their cut.
For the broker, it’s a numbers game. For you, it’s financial quicksand.
When you work with a broker, you’re not getting unbiased advice. You’re getting whatever will earn them the highest commission. And often, those fees are hidden in higher interest rates and larger payments, without you realizing the full cost until it’s too late. For a deeper dive into how brokers bury fees and drive up your costs, check out our post:
The Hidden Costs of Working with Loan Brokers.
Brokers Only Have One Tool: Debt
The thing about brokers is that they only make money through commissions. And those commissions come from getting you to sign on the dotted line for a loan—whether it makes sense for your business or not.
It’s like the old saying: when all you have is a hammer, everything looks like a nail. To a broker, every business is a nail, and the hammer they’re holding is debt. So what do they do? They push loans as the solution to every problem, even when it’s the worst possible move for your business.
Need cash flow help? “Take a loan.” Want to use your business as an ATM? “Take a loan.” Struggling to make ends meet? “Take a loan!”
It doesn’t matter if borrowing will dig you deeper into a hole—if there’s a commission to be made, brokers will make sure you get that loan.
The Cost of Convenience
Sure, brokers might save you some time on paperwork, but at what cost? That “convenience” can easily add up to tens of thousands of dollars over the life of a loan. Let’s put it in real terms:
• A broker might tack on 5%-15% in fees.
• On a $100,000 loan, that’s $5,000 to $15,000—just for their “service”.
• That doesn’t even include the higher rates you’ll pay on future fundings from that lender because now the deal is “anchored” to that first, most expensive one.
And here’s the kicker: those fees and commissions don’t disappear just because you didn’t notice them. You’ll be paying them back for years, with interest.
You Could Be Saving Thousands
What if I told you that by skipping the broker, you could get a better deal? It’s true. You can apply directly to lenders and bypass the middleman. Yes, it might take a little more legwork on your part, but you stand to save thousands—maybe even enough to hire another employee, invest in new equipment, or expand your business.
When you apply directly:
• You avoid paying unnecessary broker fees.
• You can negotiate directly with lenders for better rates.
• You’re in control of the entire process, not at the mercy of a middleman.
The Truth Hurts, But It Saves You Money
Here’s where I get real with you: if you’re overleveraging yourself just because a broker says so, that’s on you. If you’re not taking the time to understand the true cost of your loans and you’re letting brokers dictate your financial future, then you’re handing over your business’s hard-earned money on a silver platter.
It’s time to stop trusting brokers blindly and start taking control of your funding process.
What’s the Alternative?
You don’t need a broker to secure funding. You just need the right information and tools to navigate the lending landscape on your own. That’s where BrokerFreeCapital.ai (and Diogenes) comes in. Our mission is to give you the truth—whether you want to hear it or not. No hidden fees, no backroom commissions, and no overpriced loans.
We won’t push you to borrow when it doesn’t make sense, and we won’t profit off your debt. Instead, we’ll show you how to apply directly to lenders, secure better deals, and make smarter financial decisions that set your business up for long-term success.
Take Control of Your Funding
The bottom line is this: brokers don’t have your best interest at heart—you do. By taking the time to apply directly to lenders, you could save thousands in fees and put yourself in a much stronger financial position.
So the next time a broker offers to “help” you get a loan, think twice. They’re not helping—they’re profiting. And the only one who can stop them from ripping you off is you.