Capital-search mandate
The contract by which the borrower authorizes the broker to seek and negotiate financing on their behalf. It sets out the mission, any brokerage fees and when they become payable, which, as a rule, is only once funds are released. The mandate protects both parties and formalizes the broker's best-efforts commitment.
Key points
- The capital-search mandate is the contract that legally authorizes the broker to act on the borrower's behalf.
- It must specify the maximum brokerage fee amount and the conditions for it becoming payable.
- Brokerage fees may only be collected after the funds have actually been released.
- The mandate formalizes the broker's commitment regarding the steps to be taken (best-efforts obligation).
Frequently asked questions
Why is the capital-search mandate mandatory?
The mandate is required by IOBSP regulations to govern the relationship between broker and borrower. It ensures the borrower is informed of the mission assigned, any fees and their payment conditions before any steps are taken. Without a valid mandate, the broker cannot legally collect any fee, even if the financing succeeded.
What mandatory particulars must a capital-search mandate contain?
The mandate must include the broker's identity and ORIAS number, the borrower's identity, a precise description of the mission (loan type, amount sought), the maximum brokerage fee amount or rate and the conditions under which it is due. It must also state whether the broker receives remuneration from the bank and indicate its approximate amount so the borrower can assess the potential conflict of interest.
What is the difference between a capital-search mandate and a simple letter of engagement?
The capital-search mandate is a legally defined instrument governed by IOBSP regulations: it confers formal authority on the broker to act and sets the legal conditions for their remuneration. A letter of engagement is a more generic term that may describe advisory or support services without necessarily including the required legal particulars. Conflating the two can leave the broker unable to collect their fees.
In practice
A borrower signs the capital-search mandate at their first meeting with the broker: the document specifies that the €1,500 fee will only be invoiced on fund release, and that the bank will also pay the broker a commission, the estimated amount of which is stated.
Official sources
- Article L519-6 (IOBSP remuneration: no funds before disbursement) · Légifrance — CMF
- The banking-operations intermediary (IOBSP) · ABE Info Service (Banque de France / ACPR)
- Single register of intermediaries · ORIAS