NON-DISCRETIONARY COMMISSION MODEL
A credit broker operating under a non-discretionary commission model is a financial intermediary that
facilitates loans or credit transactions between borrowers and lenders. In this context, the commission
they earn is "non-discretionary", this means the amount they earn is dictated by the lender.
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Here's an explanation of the key components:
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Non-Discretionary: Non-discretionary implies that the broker doesn't have the power to make decisions
with respect to the compensation they receive for facilitating the client's transaction.
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Commission Model: The broker earns compensation in the form of commissions for successfully
matching borrowers with lenders. This compensation is typically a percentage of the loan amount or a
flat fee dictated by the lender. Importantly, this commission is earned when a loan is successfully
facilitated, and it is paid by the lender.
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In summary, a credit broker operating under a non-discretionary commission model acts as an
intermediary, connecting borrowers with lenders, with the broker earning a commission based on the
successful completion of the loan transactions. This model aligns the broker's interests with the
borrower's since they only earn a commission when the borrower finds a suitable credit offer and agrees
to proceed with the loan.