By Kaylan Pepin, CPA, CMA, Co-founder and CEO of Levr.ai. Kaylan spent his career in commercial banking at RBC, CIBC, and BDC before building Levr.
Short answer: for most business lending, in most of the US and Canada, no license is required. But the exceptions are real, they are growing, and getting this wrong is an expensive way to learn. Here is the lay of the land.
The general rule
Commercial lending sits outside most of the licensing regimes that govern consumer credit. Brokering a working capital loan, an equipment deal, or a merchant cash advance to a business generally does not require a license the way mortgages or consumer loans do. This is why the barrier to entering business loan brokering is low, and why the quality bar across the industry varies so much.
The exceptions that matter
Real estate changes everything. The moment a deal is secured by real estate, you are likely in licensed territory: mortgage broker licensing in Canadian provinces, real estate or mortgage licensing in most US states. If commercial real estate is part of your book, get licensed for it.
Some US states regulate commercial finance directly. California is the big one, where brokering loans under its financing law generally requires a license. A handful of other states have their own wrinkles, and several, including California and New York, now have commercial financing disclosure laws that affect how offers must be presented to small businesses. The trend line is toward more regulation, not less.
Consumer-adjacent products. If the borrowing is really personal credit dressed up as business credit, a sole proprietor borrowing against personal assets for example, consumer rules can apply. When a deal smells personal, treat it carefully.
Canada specifically
Pure business loan brokering is generally unlicensed across the provinces. Mortgage brokering is provincially licensed everywhere, so real estate-secured lending needs the licence. Quebec has its own regulatory character across financial services and is worth checking specifically if you operate there.
What this means in practice
Three rules keep you safe. Know your products: unsecured business lending is generally open, real estate-secured is licensed. Know your geographies: check the specific states and provinces where your clients sit, especially California and New York. And keep your paperwork clean: written fee agreements and honest disclosures are what separate professionals in an industry with a low entry bar. None of this is legal advice, and licensing rules change, so verify with your state or provincial regulator before you build.
If you are getting started, it helps to understand where brokers fit in the wider market. Our guide to business loan brokers vs business brokers covers the landscape.
Quick answers
Can I start brokering business loans today? In most places, legally yes for unsecured commercial products. Whether lenders will accept your deals is the real gate, and that is about relationships and file quality.
Do I need a license for merchant cash advances? Generally no, though state disclosure laws increasingly apply to how MCA offers are presented. California and New York lead there.
What about brokering SBA loans? The SBA has its own rules about who can be paid for packaging and referrals, and how much. If SBA is your niche, read the program rules directly.
Ready to start brokering with lender access from day one? Join Levr free.
This article is for general education, not financial or legal advice. Rules and commission structures vary by lender, state, and province, so verify anything that matters to your business.
