How broker-shop networks work for lenders and investors

Broker shops aren't lead marketplaces. Borrowers come to us, we work the file, and investors and lenders in our network see only deals that fit their box. Here's how the model actually works — and what's different about being on the investor side of one.

If you're a lender or private investor and you've been pitched on "lead marketplaces," "lender networks," or "matching platforms," it's worth understanding the model behind the pitch. The mechanics aren't all the same, and the difference shows up in what hits your inbox.

FCG runs a broker shop, not a lead marketplace. That distinction is the whole article. The rest of this post explains what the difference means in practice — for your pipeline, your unit economics, and the deals you actually have to work.

What a broker shop actually is

A broker shop takes the borrower side of the conversation. The borrower walks in with a capital need — they want to acquire a property, refinance a building, fund a business, finance equipment, bring in working capital, tokenize an asset. The broker sits with them, sorts the file, asks the questions the lender would ask, gathers the documents, runs the basic underwriting math, and identifies what type of capital actually fits.

Only after that work is done does the file go to lenders. And it only goes to the lenders whose box covers what's in the file — not to a feed where everyone races to call first.

The borrower is talking to a broker. The lender is receiving worked files, not raw leads.

What a lead marketplace is (and how it's different)

A lead marketplace sells the borrower's contact info — sometimes after a form, sometimes after a phone screen, sometimes after nothing — to multiple lenders at once. The lender is responsible for everything downstream: triaging the lead, qualifying the deal, building the file, competing with the four or twenty other lenders who got the same lead, and converting whatever's left.

The lead marketplace is paid for delivery of contact info. The borrower is shopping. Nobody is working the file.

It's a perfectly legitimate model. It's just not what a broker shop is, and the unit economics are very different.

What this means in practice for a lender or investor

Three things look different if you're on the investor side of a broker shop instead of subscribing to a lead marketplace:

1. You see files, not leads. What lands in your inbox is a packaged deal — borrower profile, deal summary, supporting docs, and an explicit reason why our routing thinks your box covers it. If the file doesn't fit, you say no and we route to the next investor whose criteria match. You don't get put in a race to be the first dialer.
2. You set the box; we filter. When you join the network, you tell us what you fund — geography, product type, loan range, LTV, DSCR, credit band, special conditions. Our routing layer reads that and only sends deals that match. The "30-lender cattle call" that drives marketplace close rates into the 1-4% range doesn't happen here.
3. You're not competing on a public feed. Deals are routed to a small shortlist of best-fit investors — usually three to five. There's enough competition that the borrower has options; there isn't so much that you're undercut on price by lenders who don't even cover the product.

The economics: success-based, disclosed, capped

The fee model in a broker shop is structurally different from a marketplace too. The relevant version, in short:

• No subscription. You don't pay to be in the network.
• No per-lead charge. You don't pay for files we route to you.
• No dead-deal fee. If a deal doesn't fund, the broker doesn't get paid either.
• Success fee only. When a deal closes and funds, a disclosed fee is paid. The exact percentage or basis-point figure is in the comp agreement before you sign, capped, with the math right there in section 2.
• Non-exclusive. You can work with anyone else. We can work with other lenders.
• No rate manipulation. Our fee doesn't get added to your rate. The borrower sees the rate you quote, not a marked-up version.

The reason this matters is alignment. When the broker only gets paid on a close, the broker has no incentive to send you junk. Bad fits clog the pipeline, train the routing on noise, and waste everyone's time. The economics push toward fewer, better-matched files — which is exactly what a worked-file pipeline should look like.

Red flags worth checking before you join any network

Whatever model you're evaluating — broker shop, marketplace, subscription, or hybrid — these are the questions worth asking the network before you sign anything:

1. Who pays, and when? If the answer is "we'll figure it out when a deal closes," that's a refusal to commit. Walk.
2. Are fees disclosed in writing in the agreement? Not in a follow-up email. Not "talk to your rep." In the agreement.
3. Is there a cancellation window or trailing-fee clause? Reasonable trailing fees on deals already in flight at cancellation are normal. Permanent fees on deals you haven't seen yet aren't.
4. Is exclusivity required? A network that demands all your deals in a footprint route through them is a gatekeeper, not a partner.
5. What does "pre-screened" mean here? Ask: who reviews each file, what gets checked, and what's the actual rejection rate. If the answer is hand-waving, pre-screening is marketing copy.
6. How wide is each routing? Three to five investors per deal is competitive. Thirty isn't. If they can't tell you the number, the shortlist isn't really a shortlist.
7. What happens to the file if I pass? If they keep routing it to the same five lenders forever until one says yes, the early respondents end up training the network for free. There should be a sensible end state.

What a clean broker-shop agreement looks like

If you're being asked to sign a comp agreement, the agreement should be readable and short. It should have all of these, explicitly:

• The success-fee percentage or basis-point figure, product-by-product
• A cap (dollar or percentage) for outlier-size deals
• Who pays the fee — lender, borrower, or split — stated for each product
• When the fee is earned (at funding is standard; anything earlier raises questions)
• What happens on a cancellation mid-deal (a trailing-fee window for deals already in flight is normal)
• Non-exclusivity clause — you can work with anyone else
• A non-solicitation window — you don't re-market to the borrower for X months after the close

If the network refuses to put any of these in writing, that's the answer.

How we do it at Freedman Capital Group

FCG is a Pennsylvania-based commercial brokerage. Borrowers come to us with capital needs across commercial real estate, residential investor debt (non-owner-occupied), unsecured business capital, hard money / bridge, SBA, construction, equipment, factoring, land, and asset tokenization. We sit with the borrower, work the file, sort the docs, and route the packaged deal to investors in our network whose criteria fit.

The model is success-fee only, non-exclusive on both sides, with disclosed caps per product. No subscription. No per-lead charge. No rate markup. If a deal doesn't fund, you owe nothing. Owner-occupied residential consumer mortgages are a separate, narrower path — regulated under TRID/RESPA, handled through a compliant referral channel to a licensed mortgage originator rather than the broker-shop model.

The comp agreement is two pages. Numbers are in section 2.

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