[Incbiz440]

Curious how you all handle PSFs in situations where one funder may pay a reasonable fee directly, and another good fit for a client may not pay anything, or very a very limited amount - less than you want.

For example, say a client is looking for a line of credit.

You've got two solid options.

Funder 1 pays you directly, we'll say 5 points.

Funder 2 pays 1 point, which is not where you want to be.

Do you collect a PSF for the difference only for Funder 2?

Collect a general PSF that provides an allowance for a credit for funder payment?

I try to work with funders that pay directly so I don't have to mess with PSFs, but also want to place clients where they can get the best terms - and best likelihood of closing. And of course I'd like to be paid a reasonable amount.

[MovingMoney]

You write: I try to work with funders that pay directly so I don't have to mess with PSFs, - i do the same exact thing
But,
If I'm going to seek the very best possible deal for the client, and actually do the work and the clients knows that, they usually have no issue paying you for the great representation you do on their behalf,
But it is very important that you discuss this with your client before you do all the work,
hitting the client up for money after the fact, they get the feeling that they are being deceived,

I am referring to example funder number 2

i have been in this situation, it usually works out very well, especially if the client knows you do impeccable work on their behest.....
good Luck.

[Olderguy]

Why would you mention an PSF if you don't have an offer with specific commission? I'd only bring it up if the loan product doesn't pay me other than a small referral fee and I tell that to the client....I then tell them I'm sending a fee agreement and to send it back signed with a voided check along with a signed approval offer.

[Incbiz440]

You write: I try to work with funders that pay directly so I don't have to mess with PSFs, - i do the same exact thing
But,
If I'm going to seek the very best possible deal for the client, and actually do the work and the clients knows that, they usually have no issue paying you for the great representation you do on their behalf,
But it is very important that you discuss this with your client before you do all the work,
hitting the client up for money after the fact, they get the feeling that they are being deceived,

I am referring to example funder number 2

i have been in this situation, it usually works out very well, especially if the client knows you do impeccable work on their behest.....
good Luck.

From my perspective the question is, mess around with PSFs for every client and build in a credit for funders that pay a full or partial of what I would charge for a PSF, but most of the time not need one, or go in without, not have it work out with funders that pay, then circle back for a PSF.

In cases where I'm sure there's only non- or low-paying funders for the clients particular situation, not an issue - collect a PSF.

PSF seems to spook some clients. And you could say well, not worth working with them if they don't value your time - but if more often than not I'm getting paid directly from funders, why lose some clients bringing up a PSF when it's probably not needed anyway.

[Incbiz440]

Why would you mention an PSF if you don't have an offer with specific commission? I'd only bring it up if the loan product doesn't pay me other than a small referral fee and I tell that to the client....I then tell them I'm sending a fee agreement and to send it back signed with a voided check along with a signed approval offer.

This was my question - so your approach is get an approval, then circle back if you feel its needed (funder doesn't pay, or pays a minimal amount). Thanks for sharing that. Do you give them a heads up that they may be on the hook for a PSF, or present that with the approval and say either you pay me or I don't share the approval? Seems like there would be potential to spend time getting to an approval, and then have a client decline to sign. OK, they don't get the loan, but you also wasted your time.

No judgement on your approach, just curious how others are approaching it.

[Olderguy]

This was my question - so your approach is get an approval, then circle back if you feel its needed (funder doesn't pay, or pays a minimal amount). Thanks for sharing that. Do you give them a heads up that they may be on the hook for a PSF, or present that with the approval and say either you pay me or I don't share the approval? Seems like there would be potential to spend time getting to an approval, and then have a client decline to sign. OK, they don't get the loan, but you also wasted your time.

No judgement on your approach, just curious how others are approaching it.

I don't mention it unless a loan approval comes back with only a referral fee. Then I tell them "To get you the best loan for this type of scenario, the lender's program won't pay me a broker's fees of the usual 2%. Thus I am required to charge a separate PSF when the loan is funded".

I'll send you a separate fee agreement with the approval. Please sign both and return with a voided check and we'll get your file in processing.

I just funded a SBA loan for inventory and there was no broker fee allowed....had to do this.

Sample fee agreement:

https://drive.google.com/file/d/1Rr2...ew?usp=sharing

[Incbiz440]

I don't mention it unless a loan approval comes back with only a referral fee. Then I tell them "To get you the best loan for this type of scenario, the lender's program won't pay me a broker's fees of the usual 2%. Thus I am required to charge a separate PSF when the loan is funded".

I'll send you a separate fee agreement with the approval. Please sign both and return with a voided check and we'll get your file in processing.

I just funded a SBA loan for inventory and there was no broker fee allowed....had to do this.

Sample fee agreement:

https://drive.google.com/file/d/1Rr2...ew?usp=sharing

That's a good way to position it. Thanks for the insight.

[Olderguy]

You can also say

"Some lender's programs allows it to be taken out of the loan and some lender's programs require use to do a separate PFS after the loan closes - out of proceeds".

Bottom line it costs you the same either way.