News and advice for small business owners, by small business owners.

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How Does Fundera Make Money?

Curious how Fundera is able to provide a free service where every small business owner receives unlimited expert guidance and information on small business lending? It’s because the lenders that we work with pay Fundera a fee every time they successfully fund a loan for our customers.

Why? Well, believe it or not, most small business lenders normally find their customers through commercial loan brokers. Think of it as how airlines and hotels used to find customers – through travel agents. But, these lenders are used to paying loan brokers astronomical fees, anywhere between 7% to 17% of the total loan size. Which means a business loan broker can, for example, make $8,500 on a $50,000 loan. Wow.

Sounds great for the broker, right? Unfortunately, the dirty little secret of loan brokers is that these crazy fees are normally passed on to the small business owner without them ever even knowing it. How does this happen? Well, a loan broker may get you an offer for a $50,000 loan at 20% interest, but then presents the loan to you at 37% interest to accommodate their fees. Sadly, you never even knew that you were eligible for 20% interest and that loan broker is in no way, whatsoever, legally responsible or liable to disclose that information.

Sound like total bullshit? We think so, too.

With more than 50% of “online” lenders’ customers coming from these loan brokers, there needs to be change. And that’s why we started Fundera.

We think that great software coupled with a world class customer service team advocating for small business owners has the power to replace loan brokers who are taking advantage of entrepreneurs. One thing you will always find at Fundera is transparency, and we think it’s important for you to know how we make money.

So, to break it down:

Every time a small business owner successfully receives a loan through Fundera, we charge the lender a fee equal to 1.5% to 3% of the total loan size. So if you receive a $50,000 loan through Fundera, we make anywhere between $750 to $1,500. The fee we charge a lender will never impact the cost of the loan you receive. Even more, we try to keep our fees for lenders the exact same for every business loan category we service. So when a lender makes an offer for 20% interest, you can rest assured that that’s the offer you will be receiving and it will be at the lowest rate possible from that lender. You’ll never be paying for our help.

Our goal is to get you the best loan product for your needs at the best possible terms, and we think that if we can do a great job at that then we can build a pretty excellent business helping millions of small business owners. So when we say that Fundera is a free service, we mean it. We’re here to save you time and money, while being your friend, partner and advocate as you grow your business responsibly. Rest assured, your best interest is our best interest.

Jared Hecht

Jared Hecht

Co-Founder & CEO at Fundera
Jared is the co-founder and CEO of Fundera, an online marketplace connecting small business owners to the best loans for their business. He writes frequently on small business lending and management.
Jared Hecht
  • awesome post Jared!!! just found out about you and Fundera. We at Jericho Business Advisors ( are looking forward to working with you and Fundera in helping small business owners obtain the working capital needed to grow and prosper.