Earning Potential

Short term bridging loans often offer brokers up to 3 fee earning opportunities, although naturally, the amounts involved depend on a number of factors including the size of the loan and the bridging company in question.

Bearing in mind that terminology differs, the opportunities can be set out as follows;

A Procuration Fee payable by the short term lender
A Broker Fee payable by the borrower

A Commission payable by the long term lender when the bridging loan is repaid by refinance

 

What is obviously important is that there is full disclosure to the borrower of all fees and commissions earned.

 

By way of example, Cheval pays its introducers a 0.5% Procuration Fee, which is deducted from Cheval’s own Completion Fee. Some brokers then add a Broker Fee which is normally deducted by Cheval from the loan advance on drawdown, but is sometimes paid directly by the borrower to their broker.

Lastly, and uniquely to bridging loans, where the bridging loan is being repaid by refinance – as opposed to the proceeds from a of sale of a property – brokers have the opportunity to earn a further commission from the long term lender who they have arranged to repay the bridge.