Using a Broker vs Going Direct to a Lender: What Is Best?
An honest assessment of when a specialist broker adds value versus when going direct makes sense. We explain both sides.
Option A
Specialist Development Finance Broker
A dedicated intermediary with relationships across 100+ specialist lenders who structures, packages, and places development finance on behalf of the borrower.
- Rate
- Same lender rates + 1-2% broker arrangement fee
- Leverage
- Best available across whole market
- Term
- Matched to project requirements
Advantages
- Whole-of-market access to 100+ lenders in a single application
- Expert deal structuring optimises the capital stack
- Competitive tension between lenders drives better terms
- Saves weeks of developer time on applications and negotiations
- Navigates complex scenarios (adverse credit, first-time, unusual assets)
Disadvantages
- Broker fee adds 1-2% to the cost (often absorbed into the facility)
- Quality varies widely between brokers
Best for
Any project where optimal terms, speed, or structuring complexity matters - which is the majority of development finance deals
Option B
Direct to Lender
Approaching one or more development finance lenders directly, without broker intermediation, to negotiate terms and complete the application independently.
- Rate
- Lender's standard terms (no broker fee)
- Leverage
- Limited to that lender's maximum
- Term
- That lender's standard terms
Advantages
- No broker fee on the transaction
- Direct relationship with the decision-maker
- Suitable if you already know which lender is right
Disadvantages
- No market comparison - you cannot know if terms are competitive
- Limited to one lender's products, appetite, and criteria
- No expert packaging - poorly presented applications get worse terms
- No leverage from volume relationships that brokers maintain
- If that lender declines, you start again from scratch
Best for
Developers with an existing strong lender relationship, simple vanilla projects, or those who genuinely understand the lending market
Side by side
Feature-by-feature
comparison.
| Feature | Specialist Development Finance Broker | Direct to Lender |
|---|---|---|
| Lender Access | 100+ specialist lenders | One lender at a time |
| Market Knowledge | Real-time visibility on rates and appetite | Limited to public information |
| Application Quality | Professionally packaged to lender standards | Self-prepared |
| Negotiation Leverage | Volume relationships and competitive tension | Individual borrower only |
| Cost | 1-2% broker fee (often from facility) | No broker fee |
| Time Investment | Minimal - broker handles the process | Significant - you do everything |
| Complex Deals | Expertise in structuring and problem-solving | Limited to your own knowledge |
| If Declined | Broker pivots to alternative lenders immediately | Start again with a new lender |
Our verdict
Which should
you choose?
We are obviously biased, so let us be transparent: strictly speaking, you do not need a broker. You can approach lenders directly, and some experienced developers with established lender relationships do exactly that. The question is whether the broker fee delivers value that exceeds its cost.
In our experience, the answer is yes for the vast majority of deals. The competitive tension created by submitting to multiple lenders simultaneously almost always results in better terms than a single direct approach. We regularly see rate reductions of 0.5-1.5% and fee waivers that more than offset our arrangement fee. On a £2 million facility, a 0.5% rate improvement saves approximately £10,000 per year - more than covering a typical broker fee.
Where going direct makes sense is when you have a genuine relationship with a specific lender, a very simple deal that does not require structuring, and you are confident that the lender's terms are competitive. Even then, many developers use a broker for due diligence - to confirm that the direct offer is actually as good as it appears.
The two products
Explore
each product.
Common questions
Frequently asked
questions.
How much does a development finance broker charge?
Broker arrangement fees typically range from 1% to 2% of the gross facility. This is usually deducted from the initial advance or added to the loan, so there is no upfront cash cost to the developer. Some brokers charge a fixed fee instead. At Construction Capital, our fee is transparent and agreed before we begin work.
Do I get worse rates going through a broker?
No - in fact, the opposite is usually true. Brokers have volume relationships with lenders that individual borrowers do not. Lenders offer brokers preferential rates because brokers send them a steady flow of well-packaged deals. The competitive tension from submitting to multiple lenders also drives rates down.
Can a broker help if I have already been declined by a lender?
Absolutely. Being declined by one lender does not mean your project is unfundable. Different lenders have very different appetites for geography, asset class, borrower experience, and deal size. A specialist broker knows which lenders are most likely to support your specific scenario and can often find a solution where a direct approach failed.
Ready when you are
Not sure which
product you need?
Tell us about your scheme and we'll recommend the right finance structure. Indicative terms from the panel within one working day.