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Equipment Finance Broker Commission Rates: How Broker Pay Actually Works

Ask five equipment finance companies what they pay brokers and you may get five different answers.

One program may pay a percentage of the funded amount. Another may compensate through approved pricing spread. A brokerage may split its collected commission with a sub-broker. A referral partner may receive a fixed fee. Larger structured transactions can use a negotiated advisory or success fee instead.

That makes a single "normal equipment finance broker commission rate" misleading.

Quick Answer: There is no universal equipment finance broker commission rate in the U.S. or Canada. Compensation can be a percentage of the funded amount, a lender-approved pricing spread, a referral fee, a brokerage split or another contractual arrangement. Compare gross compensation, your actual split, funding conditions, clawbacks and legal requirements—not just the headline percentage.

What is an equipment finance broker commission?

A broker commission is compensation earned for helping originate, structure, place or close a commercial equipment financing transaction.

The broker may help:

• identify the equipment requirement;
• qualify the business;
• collect financial documents;
• determine whether a loan or lease fits;
• prepare the credit package;
• match the transaction with a financing provider;
• respond to underwriting conditions;
• coordinate vendor documentation; and
• move the transaction through funding.

The financing provider ultimately decides whether to approve the borrower and on what terms.

Mehmi's What Does an Equipment Finance Broker Do? explains why broker work extends well beyond sending a customer's application to a lender.

Commission compensates the broker or brokerage for that work, but how the compensation is calculated depends on the applicable agreement.

Is there a standard equipment finance broker commission rate?

No authoritative industry-wide percentage applies to every equipment finance transaction.

That is the most important answer on this page.

A commission may change based on:

• financing provider;
• deal size;
• equipment;
• borrower quality;
• financing structure;
• geographic jurisdiction;
• source of the customer;
• level of broker involvement;
• pricing discretion;
• sub-broker split;
• referral arrangement; and
• partner agreement.

That means a statement such as "equipment finance brokers make 5%" should not be treated as a universal benchmark.

The only percentage that controls a particular transaction is the compensation arrangement that actually applies to that broker, provider and deal.

Mehmi's current public disclaimer makes the same distinction for its own transactions: it states that Mehmi may receive commission, referral or brokerage compensation and that the arrangement can vary between financing providers and products.

Independent brokers comparing program economics should therefore evaluate the entire agreement, not one advertised percentage.

What are the main equipment finance commission structures?

There are several common ways an equipment finance broker or referral partner can be compensated.

Percentage of the funded amount

This is the simplest commission model to understand.

Suppose the contractual broker compensation is 3% of the amount funded.

If the transaction funds CAD $150,000:

CAD $150,000 × 3% = CAD $4,500 gross commission.

That calculation is straightforward.

What is not straightforward is assuming that 3% is the normal rate for every deal.

It is merely the rate used in that example.

The applicable program could pay more, less or use a completely different calculation.

Pricing spread or points

Some equipment finance channels provide the broker with pricing parameters.

The financing source may establish underlying transaction economics, and the broker may have approved discretion to price the customer differently within the provider's rules.

The difference can contribute to broker compensation.

This is sometimes described using terms such as:

• buy rate;
• sell rate;
• spread;
• points; or
• participation.

The exact mechanics depend on the provider.

A broker should not increase customer pricing simply to maximize commission without considering competitiveness, disclosure obligations and whether the customer can comfortably support the resulting payment.

Mehmi's Funded-Deal Commission for Equipment Financing Partners provides more detail on the difference between the financing provider's pricing and partner economics.

Fixed referral fee

A referral partner may receive a predetermined dollar amount instead of participating in the entire financing economics.

That structure can make sense when the referral partner only introduces the customer.

For example, an accountant, equipment salesperson or consultant might identify a financing need but have no interest in collecting bank statements, structuring a lease or clearing lender conditions.

That is different from operating as a full equipment finance broker.

Mehmi's Get Paid for Referring Equipment Financing Deals in Canada explains the practical difference between referral activity and deeper broker involvement.

Brokerage or sub-broker split

An independent broker working through a larger brokerage may not retain 100% of the gross commission generated by the transaction.

Instead:

Gross commission × contractual broker split = broker payout before expenses and tax.

Suppose the deal produces CAD $4,500 of gross brokerage compensation.

If the originating broker's contractual split is 70%:

CAD $4,500 × 70% = CAD $3,150.

The brokerage retains the remaining CAD $1,350 under this purely illustrative example.

Again, the 70% figure is an assumption for showing the math, not a Mehmi commitment or industry standard.

Brokers comparing this type of arrangement should review Mehmi's Equipment Finance Sub-Broker Program Canada alongside its Equipment Finance Broker Program Canada to understand how the responsibilities can differ.

Client-paid brokerage or advisory fee

Certain commercial transactions may involve a fee charged directly to the client.

That is not something a broker should add casually.

The fee needs to be lawful in the applicable jurisdiction and properly disclosed.

Mehmi's current public policy specifically states that any client-paid brokerage fee, where applicable, must be separately disclosed and charged only where lawful.

Larger structured transactions can also involve advisory fees that are negotiated differently from ordinary equipment-finance commissions.

Do not apply a small-ticket equipment commission model automatically to a multimillion-dollar structured financing mandate.

What determines the actual commission rate?

The rate is only one part of the economics.

Several variables can materially change what the broker ultimately earns.

Deal size

A percentage on a small transaction can produce very different economics from the same percentage on a large transaction.

For example:

A 3% commission on CAD $50,000 equals CAD $1,500.

A 3% commission on CAD $500,000 equals CAD $15,000.

Because larger files can generate substantial absolute compensation even at lower percentages, some programs structure compensation differently as transactions get larger.

Do not assume the percentage remains constant across every ticket size.

Amount financed

Commission calculations may use the amount actually funded rather than the original equipment purchase price.

Suppose a machine costs CAD $200,000 and the customer contributes CAD $50,000.

If the applicable agreement calculates compensation on the CAD $150,000 financed amount, using the CAD $200,000 equipment price would overstate commission.

Read the agreement and confirm the commission base.

Equipment type

A standard excavator from an established dealer is a different transaction from a highly specialized production machine bought through a private sale.

More complicated assets can require:

• valuations;
• lien searches;
• inspections;
• additional lender work;
• specialized financing providers; or
• stronger documentation.

That does not automatically mean the broker earns a higher rate, but asset type can affect the program and transaction economics available.

Customer quality

A strong established business purchasing liquid equipment can attract more financing competition.

The broker may have less room in the pricing on a transaction where the customer can easily compare offers from multiple banks and equipment finance companies.

A difficult file may require substantially more structuring work but still not generate better net economics if the borrower ultimately cannot support the transaction.

A high theoretical commission on a deal that never funds equals zero commission.

Vendor relationships

An equipment dealer generating repeat business can have different economics from a broker sourcing one customer at a time.

The important metric becomes total funded volume rather than maximizing the percentage earned on one purchase.

Dealers and independent originators considering this model should also review Mehmi's Equipment Dealer-to-Finance-Broker Program Canada.

Gross commission is not the same as broker income

This is where many new brokers miscalculate their earning potential.

Suppose a transaction generates CAD $6,000 of gross brokerage revenue.

That does not necessarily mean CAD $6,000 becomes the individual broker's income.

Potential deductions can include:

• brokerage split;
• referral split;
• partner share;
• operating expenses;
• software;
• lead-generation costs;
• employees or contractors;
• chargebacks;
• taxes; and
• other business expenses.

The useful formula is:

Broker payout before operating expenses and taxes = gross transaction compensation × contractual broker split

A broker evaluating a program should therefore ask:

What is the gross fee?

What percentage belongs to me?

What deductions apply?

When does the commission become payable?

Can it be clawed back?

Those questions usually matter more than the advertised headline rate.

Mehmi's Broker Partner Portal Canada explains why funded status, fee basis, invoicing and payout status should be visible in a properly managed broker workflow.

When is an equipment finance broker actually paid?

Approval and funding are different events.

A lender may approve a transaction subject to:

• final invoice;
• customer contribution;
• insurance;
• equipment serial number;
• lien searches;
• signed finance documents;
• proof of delivery;
• acceptance; or
• other conditions.

If those conditions are never completed, the transaction may never fund.

Under Mehmi's current funded-deal partner explanation, commission is associated with a transaction becoming funded or booked rather than merely receiving a credit approval.

Every broker should confirm the exact payout trigger in the applicable agreement.

"Approved" should never be automatically entered into a commission forecast as "paid."

Can equipment finance commissions be clawed back?

Sometimes.

A partner agreement can contain chargeback or clawback provisions.

Potential triggers can include events such as:

• early transaction unwind;
• fraud or material misrepresentation;
• first-payment problems;
• cancellation;
• equipment not being delivered;
• transaction rescission; or
• another event specified in the agreement.

The exact provisions vary.

Read them before submitting business, particularly when your personal cash-flow plan assumes that every funded commission is permanently earned on day one.

The best way to reduce avoidable problems is not clever commission structuring.

It is clean underwriting and documentation.

That means verifying the borrower, equipment, seller, invoice, ownership and delivery before treating the deal as complete.

Illustrative equipment financing and commission example

Consider a Canadian equipment transaction.

Equipment price / amount financed: CAD $150,000
Assumed customer interest rate: 10.00% annually
Term: 60 months
Payment frequency: Monthly
Financing fees assumed: CAD $0
Balloon or residual: None assumed
Illustrative gross broker commission: 3% of the funded amount
Illustrative broker split: 70%

Using standard monthly amortization, the estimated customer payment is approximately CAD $3,187.06 per month.

Estimated total scheduled repayment is approximately CAD $191,223.40.

Estimated interest over the 60-month term is approximately CAD $41,223.40.

For broker-compensation purposes:

CAD $150,000 × 3% = CAD $4,500 gross commission.

At the assumed 70% broker split:

CAD $4,500 × 70% = CAD $3,150 broker payout before expenses and taxes.

The remaining CAD $1,350 would stay with the brokerage under this illustrative split.

This example does not state that 3% is a normal market commission, that 70% is a normal broker split or that 10% customer pricing is currently available.

It is simply a mathematical illustration.

It also does not assume that the customer directly pays a CAD $4,500 brokerage fee. Whether compensation is lender-paid, embedded in transaction economics or separately charged depends on the applicable financing and broker agreements.

The calculation excludes GST/HST/PST/QST, documentation costs, registration expenses, legal expenses, insurance, late charges, prepayment provisions and other possible costs.

From the customer's cash-flow perspective, the equipment adds approximately CAD $3,187.06 of monthly debt service.

From the broker's perspective, the transaction produces CAD $3,150 before business expenses and tax under the assumed split.

That illustrates why customer economics and broker economics should always be evaluated separately.

How do taxes affect Canadian broker commissions?

Commission income is still business income.

The Canada Revenue Agency states that self-employed commission income is included as business income and requires taxpayers to track gross and net commission income.

GST/HST registration is another issue to monitor.

For most businesses, CRA's small-supplier rules currently use a CAD $30,000 threshold based on worldwide taxable supplies, subject to the rules for exceeding the threshold in a single calendar quarter or over four consecutive calendar quarters.

Whether GST/HST applies to a particular commission arrangement depends on the nature of the service and the circumstances.

Do not simply take a CAD $5,000 commission, call the whole amount take-home income and ignore the tax treatment.

A Canadian accountant should confirm how your particular brokerage is required to report commission revenue and applicable GST/HST.

How are U.S. broker commissions different?

The basic commission math may look similar, but U.S. brokerage rules cannot be treated as Canada with USD substituted for CAD.

State law matters.

Commercial financing brokerage, disclosure and licensing rules can vary based on:

• borrower state;
• equipment-financing structure;
• whether the transaction is a loan or bona fide lease;
• amount;
• provider;
• broker activity; and
• compensation arrangement.

California, for example, requires specified commercial financing disclosures from covered providers, including the amount provided, total dollar cost, term, payment frequency and prepayment information.

That is an example of why the customer's total financing economics should remain transparent even when the broker's compensation is being paid through the transaction.

Mehmi's current U.S. policy also states that its geographic availability depends in part on transaction type and compensation arrangement. It currently restricts general commercial loan-broker applications in several states unless appropriate authorization or an exemption has been confirmed.

Those are Mehmi's operating restrictions, not a statement that equipment financing itself is unavailable in those jurisdictions.

An independent broker needs to assess the rules that apply to its own company.

Should you choose a broker program based on the highest commission?

Usually that is the wrong first question.

Imagine two partner programs.

Program A appears to offer better gross economics but has weak lender fit for your typical customers, poor visibility after submission and a high percentage of approvals that never reach funding.

Program B pays less per funded dollar but understands your equipment niche, communicates conditions clearly and consistently converts qualified applications into funded transactions.

The better business model cannot be determined from commission percentage alone.

Compare:

• actual funded percentage;
• lender fit;
• equipment appetite;
• broker split;
• customer ownership;
• renewal treatment;
• turnaround and communication;
• portal visibility;
• clawback terms;
• compliance support; and
• whether the program solves the types of files you originate.

For brokers comparing the wider partner relationship, Mehmi's Commercial Finance Broker Partner Program Canada explains the difference among referral, sub-broker and deeper broker models.

How can a broker earn more without increasing the commission rate?

Improve funded volume.

A broker who regularly originates fundable transactions can produce more income without increasing customer pricing.

That means:

• qualifying customers earlier;
• understanding equipment;
• getting complete applications;
• identifying existing debt;
• collecting financial documents correctly;
• matching the lender before submission;
• clearing conditions quickly; and
• maintaining vendor relationships that generate repeat opportunities.

Brokers wanting to develop those skills can use Mehmi's How to Become an Equipment Finance Broker in Canada and Equipment Finance Broker CRM Guide.

A high commission rate cannot compensate for poor closing discipline.

Frequently Asked Questions

What percentage do equipment finance brokers make?

There is no universal percentage.

Compensation depends on the financing provider, transaction, equipment, deal size, partner agreement and broker role. Treat public commission percentages as program-specific unless reliable market-wide evidence supports a broader benchmark.

Is broker commission based on equipment price or amount financed?

It depends on the agreement.

Some arrangements may calculate compensation against the funded amount. Others can use a different fee or pricing formula.

Confirm the actual commission base before calculating expected income.

Do brokers get paid at approval?

Not necessarily.

Many partner arrangements tie compensation to a successfully funded or booked transaction rather than credit approval alone.

An approved transaction can still fail to fund if conditions are not completed.

Can a broker earn commission from a lease?

Potentially.

Equipment loans and leases can both involve broker or referral compensation.

The calculation depends on the financing provider and contractual program.

Does a larger equipment deal always pay a higher commission?

It may pay a larger dollar amount, but not necessarily a higher percentage.

Commission structure can change with transaction size and other factors.

What is the difference between gross commission and broker split?

Gross commission is the total compensation generated for the brokerage or channel under the applicable agreement.

The broker split determines how much of that gross amount goes to the individual originating broker or sub-broker.

Can a broker charge the business directly?

Potentially, where permitted, properly disclosed and consistent with the applicable agreement and law.

Mehmi's current policy says any client-paid brokerage fee must be separately disclosed and charged only where lawful.

Do Canadian equipment finance brokers charge GST/HST on commission?

It depends on the broker's registration status and the nature of the supply.

CRA's current small-supplier rules generally require most businesses to monitor the CAD $30,000 taxable-supplies threshold, but specific tax treatment should be confirmed with an accountant.

Can a commission be reversed after the broker is paid?

Potentially, if the applicable partner agreement contains a clawback or chargeback provision and the triggering event occurs.

Read those provisions before treating the commission as permanently earned.

Discuss an equipment finance broker partnership

The most useful way to compare equipment finance commission programs is with real transaction information rather than one headline percentage.

Be prepared to discuss:

• typical financing amount;
• whether your customers are in the United States, Canada or both;
• relevant states or provinces;
• equipment types;
• average transaction size;
• customer use of the equipment;
• expected monthly deal volume; and
• whether you want a referral, sub-broker or more hands-on broker structure.

Mehmi Financial Group operates as a commercial financing brokerage and intermediary, not a direct lender. Independent financing providers establish final credit decisions, pricing, documentation, security requirements and funding conditions. Mehmi's public disclaimer also states that compensation arrangements can vary among financing providers and products.

Call Mehmi Financial Group at 833-863-4644 or use the verified Mehmi Financial Group contact page to discuss partner fit. The current page confirms the toll-free number.

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