Is an electronic signature legally valid for this agreement?

Yes. Electronic signatures are generally legally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and retention requirements are met; exceptions apply for certain testamentary or court-submitted documents.

Do I need a written agreement for referrals?

A written agreement is strongly recommended to document payment triggers, calculation method, and responsibilities. Written terms reduce disputes, support tax reporting, and may be required by licensing authorities in regulated industries.

When is a referral fee considered payable?

Fees typically become payable on a defined trigger: loan funding, closing, or lender acceptance. Specify the exact event, invoicing timeline, and any clawback conditions to reduce collection disputes and accounting ambiguity.

Are notarization or witnesses required?

Most referral agreements do not require notarization or witnesses, but state-specific or industry rules may suggest notarization for added enforceability; remote online notarization (RON) is available in many states subject to identity-proofing and recordkeeping requirements.

How long must I keep the signed agreement?

Retain agreements for at least three years for tax and audit purposes (IRC §6501(a)); healthcare-related records require six years under HIPAA (45 CFR §164.530(j)). Verify state or industry requirements for longer retention periods.

What is the recommended dispute resolution approach?

Include a clear dispute resolution clause that specifies negotiation, mediation, or arbitration steps, identifies governing law, and requires parties to preserve records and invoices to support any claims or defenses.

Electronic Signature
Templates
Finance
Loan Referral Agreement

Loan Referral Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

LOAN REFERRAL AGREEMENT

This Loan Referral Agreement (the Agreement) is made effective as of Effective Date: by and between Referrer Name: (Referrer) and Lender Name: (Lender).

Parties and Contact Information

Referrer Business Name Referrer Address

Referrer Phone

Referrer Email

Lender Business Name Lender Address

Lender Phone

Lender Email

Definitions

For purposes of this Agreement, the following terms have the meanings set forth below: "Referred Borrower" means a prospective borrower whose contact information is delivered to Lender by Referrer; "Closed Loan" means a loan for which Lender has executed binding loan documents and disbursed funds to the borrower; "Referral Fee" means the compensation payable by Lender to Referrer as set forth in Section Referral Fee and Payment.

Referral Services

Referrer shall introduce potential borrowers to Lender by submitting a completed Referral Notice containing the information required by Lender. Submission of a referral does not create an obligation on Lender to approve financing. Referrer makes no representation that any referred party will be approved or funded.

Referral Notice - Required Borrower Information

Referral Fee and Payment

Subject to the terms and conditions of this Agreement, Lender shall pay Referrer a Referral Fee for each Closed Loan that results from a Referred Borrower introduced by Referrer and tracked in Lender's records in accordance with Section Reporting and Records.

Referral Fee (percentage of funded principal)

Flat Referral Fee (if applicable)

Payment Due (days after funding)

Payment Method

Referral Fees are calculated on the funded principal amount unless a flat fee is specified. Fees are due only for Closed Loans where the Referred Borrower was introduced by Referrer and is not already known to Lender at the time of submission. Lender may offset against any amounts due to Referrer any refunds, chargebacks, or amounts attributable to borrower default prior to funding.

Conditions for Payment

Payment of the Referral Fee is conditioned upon (a) receipt by Lender of the Referred Borrower's complete and accurate information; (b) execution of loan documents by the Referred Borrower; and (c) disbursement of loan proceeds. Referrer must not be compensated for leads for which Referrer engaged in activities constituting loan brokering or mortgage lending without appropriate licenses; Lender may withhold payment if Referrer's conduct subjects Lender to regulatory penalty or reputational harm.

Exclusivity Referrer is the exclusive referral agent for the geographic area set forth below. Non-exclusive; Referrer may make referrals to other lenders. Geographic Area (if exclusive)

Reporting and Records

Lender shall maintain records of referrals received from Referrer and the disposition of each referral. Lender will notify Referrer in writing within 30 days of funding of a Referred Borrower with the loan details necessary to calculate the Referral Fee (funded principal, funding date, loan identification). Referrer may audit such records upon reasonable advance notice and during regular business hours no more than once per calendar year.

Compliance, Licenses and Authorization

Referrer represents and warrants that it will act in compliance with all applicable laws, regulations, and licensing requirements governing referrals and broker activities. Referrer shall not make any loan terms representations on behalf of Lender or collect application payments unless authorized in writing by Lender.

Confidentiality and Data Security

Each party shall treat as confidential all non-public information received from the other party in connection with referrals and shall implement commercially reasonable administrative and technical safeguards to protect personal borrower data. Confidential information shall not be disclosed except as required by law or with prior written consent.

Representations, Warranties and Indemnification

Each party represents that it has authority to enter this Agreement. Referrer shall indemnify and hold Lender harmless from claims, losses, fines, or liabilities arising from Referrer's breach of applicable laws, misrepresentations to Referred Borrowers, or negligent data handling. Lender shall indemnify Referrer for claims arising from Lender's breach of this Agreement or wrongful denial of legitimately due Referral Fees.

Limitation of Liability

EXCEPT FOR WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, NEITHER PARTY SHALL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF THIS AGREEMENT. EACH PARTY'S AGGREGATE LIABILITY SHALL NOT EXCEED THE AMOUNTS ACTUALLY PAID OR PAYABLE UNDER THIS AGREEMENT IN THE TWELVE MONTHS PRECEDING THE CLAIM.

Term and Termination

This Agreement shall commence on the Effective Date and continue until terminated by either party with 30 days' written notice. Termination shall not relieve Lender's obligation to pay Referral Fees for Closed Loans that resulted from referrals made prior to termination, subject to the conditions for payment set forth herein.

Notices

All notices under this Agreement shall be in writing and delivered to the contact information set forth above or to such other address as the party may designate by notice. Notice shall be effective upon receipt.

Miscellaneous

This Agreement constitutes the entire agreement between the parties relating to the subject matter and supersedes prior communications. This Agreement may be amended only by a written instrument signed by both parties. Neither party may assign its rights without the prior written consent of the other, except to an acquirer of substantially all assets. This Agreement shall be governed by the laws of the state identified below.

Governing Law (State)

Dispute Resolution

Additional Terms and Notes

Referral Example / Referred Borrower Record

For each referral, Referrer shall provide at minimum the Referred Borrower name, contact information, date of submission, and requested loan amount.

Referred Borrower Name Referred Borrower Contact

Date Submitted

Requested Loan Amount

Referrer Printed Name:

By:

Date:

Lender Printed Name:

By:

Date:

What a Loan Referral Agreement Is and When It Applies

A Loan Referral Agreement is a written contract that records the terms under which one party (the referrer) introduces a prospective borrower to a lender or broker in exchange for a referral fee. The document identifies the parties, describes qualifying referrals and loan products, sets the compensation formula and payment triggers, and allocates responsibilities for invoices and tax reporting. It also addresses confidentiality, recordkeeping, compliance with licensing rules, and dispute resolution so both referrer and recipient have a clear, auditable understanding of expectations.

Why a Written Referral Agreement Matters

A Loan Referral Agreement reduces ambiguity about payment conditions, creates a record for accounting and tax reporting, helps demonstrate regulatory compliance where licensing applies, and lowers the risk of disputes by documenting triggers and remedies.

Who Typically Uses Loan Referral Agreements

Professionals using Loan Referral Agreements include brokers, agents, and referral partners who require documented fee arrangements and an auditable trail.

Mortgage brokers and lenders — document fee splits, licensing compliance, and payment triggers.
Real estate agents and brokers — record compensation for introduced buyers seeking financing.
Referral networks and affiliates — track referrals, reconcile invoices, and manage payouts.

Use this agreement when compensation depends on origination, funding, or another clear milestone to protect both referrer and recipient.

Key Elements to Include in a Professional Agreement

A professional Loan Referral Agreement should clearly cover the parties, referral scope, compensation, payment timing, confidentiality, and termination terms to avoid later disputes.

Parties & Roles

Identify referrer, recipient, and any intermediaries; include legal entity names, addresses, contact info, and authorized signatories to prevent authority disputes.

Referral Scope

Define qualifying leads, eligible loan products, geographic limits, and whether repeat referrals or warm transfers are included to reduce ambiguity.

Compensation Formula

Specify fee type (flat fee, percentage of origination, or fixed commission), calculation method, caps, and circumstances that trigger or void payment.

Payment Terms

State the triggering event for payment (funding, closing, or acceptance), invoicing timeline, payment method, and remedies for late or disputed payments.

Confidentiality & Compliance

Include confidentiality obligations, data-sharing limits, borrower consent requirements, and representations about required licenses or regulatory compliance.

Termination & Amendments

Describe term length, termination for cause or convenience, notice periods, and a clear amendment process requiring written signatures or e-signature equivalents.

Step-by-Step: Execute a Loan Referral Agreement

Follow these steps to complete and execute a Loan Referral Agreement accurately and retain an auditable record.

01

Gather Details: Collect party, borrower, and loan product information.
02

Populate Agreement: Enter terms, fees, and effective date precisely.
03

Review Terms: Confirm licensing and borrower consent obligations.
04

Sign & Distribute: Execute electronically and share copies with accounting.

Recommended Online Workflow Settings

Set up fields, authentication, and routing so agreements are complete, authenticated, and delivered to the right teams automatically.

Field	Configuration
Authentication	Email and SMS code
Signature Type	Electronic signature with audit trail
Conditional Fields	Enable fee fields after loan type selected
Routing	Lender → Referrer → Accounting

Typical Routing and Post-Signature Steps

A defined routing path ensures the lender, referrer, and administrative teams receive executed copies and next-step instructions promptly.

Send to Lender: Deliver signed agreement to lender legal or origination team.
Verify Consent: Confirm borrower acknowledgment if required by law.
Invoice Referrer: Issue invoice per payment schedule after triggering event.
Archive Record: Store executed agreement in secure document repository.

Technical Requirements for Digital Execution

Digital completion requires compatible file formats, signer authentication, and secure storage to maintain legal and audit integrity.

Integrations: Salesforce, NetSuite, Google Workspace
File Formats: PDF, DOCX, XLSX supported
Authentication: Email, SMS code, KBA optional

eSignature Pricing and Feature Comparison for Agreement Execution

A brief comparison of common eSignature providers and baseline features relevant to executing Loan Referral Agreements; signNow appears first per product data.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Free trial available	Free trial available
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Security and Compliance Features to Protect Agreement Data

Encryption in Transit: TLS 1.2/1.3 encryption

Encryption at Rest: AES-256 full-disk encryption

Certifications: SOC 2 Type II and ISO 27001

HIPAA Compliance: BAA available upon request

Audit Trail: Timestamps, IP addresses, action history

Access Controls: SSO and role-based permissions

Penalties and Key Risks of an Incomplete or Incorrect Agreement

Licensing Violations: Monetary fines, license revocation

Unpaid Fees: Collection disputes, withheld commissions

Tax Reporting: Backup withholding risk

Consumer Consent: Privacy violations, regulatory penalties

Fraud Allegations: Civil liability exposure

Record Loss: Evidence gaps in disputes

Common Mistakes to Avoid When Preparing This Agreement

Using vague payment triggers such as "upon approval" without defining whether approval requires funding, underwriting clearance, or borrower acceptance.
Failing to collect and record borrower consent or contact details, making it difficult to match referrals to loan files during audits.
Omitting tax identification details for the referrer, which can lead to backup withholding or incorrect 1099 reporting.
Forgoing a dispute resolution clause or clear invoice and documentation procedures, increasing litigation risk and collection delays.

Practical Tips for Accurate and Efficient Completion

Adopt these practical measures to improve enforceability, speed payments, and simplify audits for Loan Referral Agreements.

Define payment triggers and calculation method clearly

Spell out exactly when payment is due (for example, funding date or loan purchase), how the fee is calculated, and any conditions that reduce or void the fee, which prevents later disputes and eases accounting reconciliation.

Require borrower consent and matching identifiers

Record borrower acknowledgment and include application or file numbers so referrals can be matched to origination records during reconciliation or regulatory review; this practice also helps if regulators request evidence of consent.

Include tax and reporting information for payments

Collect taxpayer identification and payment remit instructions up front; specify responsibility for 1099 issuance and when backup withholding applies to reduce post-payment tax complications.

Use a compliant e-signature workflow with an audit trail

Execute agreements electronically under ESIGN/UETA, capture timestamps and IP addresses, require appropriate signer authentication, and retain a tamper-evident copy to support enforceability and records requests.

Frequently Asked Questions About Loan Referral Agreements

Answers to common legal, practical, and technical questions about preparing, signing, and enforcing Loan Referral Agreements.

Need help? Contact support

Is an electronic signature legally valid for this agreement?
Yes. Electronic signatures are generally legally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and retention requirements are met; exceptions apply for certain testamentary or court-submitted documents.
Do I need a written agreement for referrals?
A written agreement is strongly recommended to document payment triggers, calculation method, and responsibilities. Written terms reduce disputes, support tax reporting, and may be required by licensing authorities in regulated industries.
When is a referral fee considered payable?
Fees typically become payable on a defined trigger: loan funding, closing, or lender acceptance. Specify the exact event, invoicing timeline, and any clawback conditions to reduce collection disputes and accounting ambiguity.
Are notarization or witnesses required?
Most referral agreements do not require notarization or witnesses, but state-specific or industry rules may suggest notarization for added enforceability; remote online notarization (RON) is available in many states subject to identity-proofing and recordkeeping requirements.
How long must I keep the signed agreement?
Retain agreements for at least three years for tax and audit purposes (IRC §6501(a)); healthcare-related records require six years under HIPAA (45 CFR §164.530(j)). Verify state or industry requirements for longer retention periods.
What is the recommended dispute resolution approach?
Include a clear dispute resolution clause that specifies negotiation, mediation, or arbitration steps, identifies governing law, and requires parties to preserve records and invoices to support any claims or defenses.

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