To work with a commercial finance broker has many benefits, rather than those that are apparent. Here’s why and how it’s going to save you a lot of time, effort and trouble.
For certain firms which have needed to borrow money from time to time, the commercial finance market has long become a mystery. Far gone are the times of only walking into the local bank and finalising with the bank manager a handshake agreement. Despite their best efforts, banks are barely able to meet the enormous capital demands that Uk companies have.
Inevitably, private lenders have succeeded in filling this supply void. It has also created problems for borrowers, except in terms of predatory loans and other ills. Moreover, many lending firms do not have the requisite expertise at their disposal to understand all the complexities of a commercial loan. That is where specialised financial brokers come into play.
There are also many factors why you should use the services of an experienced and reliable brokerage.
What Is a Finance Broker before we start?
Many individuals have don’t have a clear understanding of what finance brokers do, especially those who have not borrowed money before.
A finance broker is, in the simplest of words, a competent organisation (a person or a company) experienced to give specialist financial advice and fit the loan criteria with lenders acceptable offers.
Brokers work in nearly every sphere of lending, from small-scale private finance to large-scale corporate financing. Commercial finance brokers (such as Funding11) specialise in helping companies find the right type of financing arrangement.
Although the finer points of whether you can use a broker’s services will be covered below, it should be enough, for now, to conclude that a professional broker will help the company navigate hard cash and/or credit crunch scenarios.
Why does it not always work to contact a lender directly?
Not so long ago, having a business loan used to be a simple matter. Only call the nearest bank branch or high street lender, let them know the needs and get approved for one of their easy-to-use ready-made finance products.
However, the simplicity of this framework was at your expense. It’s undoubtedly a bad idea for a company to venture into a retail finance contract because it is not only more expensive but does not bring to your attention all the potential choices you can pick from.
Furthermore, it is a lengthy and time-consuming method to contact lenders directly, regardless of how easy it might appear to be. You have to restart the entire thing twice if a lender turns your application down, leading to numerous soft and hard credit checks that leave their fingerprints in your credit report. Here’s why your loan application is given a boost by using a professional broker.
Brokers find it simpler, faster and simpler to borrow
As we just mentioned, contacting a lender directly for a business loan may not always be the right option. Not only does it quickly drain your money, it often almost inevitably leads to an unequal bargain for you.
By making the whole financing process more straightforward, more accessible and smarter, commercial finance brokers help you escape this situation. For example, Funding11 is among the handful of brokers out there who have an impeccable track record of turning around loan requests within 24 hours.
Also, all reputable brokers expect to manage your personal information with the utmost respect. You are in charge, at all times, for your application when you use the services of a broker.
You will select through products you would never have seen before
Perhaps the most substantial advantage of using commercial finance broker services is this. They may only provide quotations that are derived from the products they already offer when you contact a lender directly. For flexibility, there is no space, and you will always have to compete with incompatible loan products and to save the day.
For, e.g., if you get qualified for bridging finance and only lump-sum business loans are proposed by the lender, they will present you with a deal that makes no sense in terms of the criteria.
We cannot avoid this question when dealing with a broker. Most lenders partner with brokers primarily and offer broker-only financing options that would not be open to you if you wanted to tackle them on your own.
To guarantee that you collect deals from UK-wide lenders, you should go a step forward and collaborate with a full business commercial finance broker such as Funding11.
Brokers will save money for you
You shouldn’t be if you’re thinking with broker fees and prices. Often, brokers working with specialised lenders may obtain offers that are much cheaper than their retail counterparts. Eventually, in the context of more reasonable interest rates and smoother disbursements, the money you save outweighs the broker fees you might be expected to pay.
A responsible broker like Funding11 will never charge you undisclosed fees and upfront fees. Before you accept any offer of financing, you will know precisely how much you will pay.
Specialist loans you can access
Usually, specialist lenders are small to medium-sized lenders that provide just extremely tailored financing items such as bridging financing, credit line and construction finance.
So that it saves lenders a lot of stress, both of these expert lenders prefer exclusively to work with brokers. Using the services of a broker, in turn, helps you to unlock offers from professional lenders.
Working with an expert broker also ensures that the broker will have invaluable industry knowledge and guidance, making that even more satisfying with any loan bid.
Experience you can not acquire
A reputed broker carries years of experience with them that you can not place a numerical value on that.
Those brokers learn how to manoeuvre around challenging financial conditions that you would not otherwise be able to manage on your own.
A professional broker such as Funding11 will assist you if you want to fast-track your bridging loan, get a business loan amid bad credit background, get advice on an especially unusual valuation and planning approval issue, or tailor your repayment strategy depending on your income.
Brokers know your affordability best
Unfortunately, both borrowers and lenders have been able to downplay the value of recognising creditworthiness and affordability over the years, time and again.
This has paved the way, somewhat unsurprisingly, for unreasonably structured, excessively priced loans that verge on being predatory at times.
Having a broker for business lending means you stay free from this debt trap easily. Based on your income and your expenditure, brokers know how to judge your affordability better, helping them only to generate deals that are in your best interests.
Brokers could offer reliable financial advice
There is a world of differentiation between private equity and commercial equity, a point that many banking firms do not take into consideration when applying for a loan.
Impaired judgement and uninformed decisions lead to failures, if not decades that the creditor has to deal with for years. By seeking financial advice from a responsible broker, such as the Funding11, you can get around this problem.
Summing up – Here’s why you should use a commercial finance broker
- Save time and stress
- Full market-wide offers
- Save cash and inject that saved money in the business
- Broker knowledge and expertise
- Stay away from expensive interest rates
Choosing a broker for commercial finance-things to bear in mind
Now that we’ve briefly talked about what a commercial finance broker can bring you to the table, it’s time to see what you can look for when selecting one.
There are no criteria or rules set in stone here, but the following points will help you make the decision which is a responsible and knowledgeable decision.
Are they affiliated with some reputed trade organisations?
This isn’t precisely an unnegotiable thing, but it also gives you a clear understanding of the broker’s role in the industry.
Look for any certifications and memberships that provide the activities of the broker with legitimacy.
Do they responsibly treat your data?
All organisations have to work responsibly with the personal details and any data they receive. That is even more so for brokers who need to gather sensitive personal and financial information from you.
Usually, a professional broker is GDPR Compliant and licenced with the Office of the Information Commissioner (ICO).
What they are specialised for?
Many brokers out there work hard to combine their industrial equivalents with personal finance goods. This is not generally a smart decision because, in terms of product versatility and range, Funding11 is far more stable.
Have they got full market access?
The market can be compared by all market brokers to find lenders who can give you quotes. This has an enormous favourable influence on the borrowings in the long term.
How does it work
To understand how their services work, ask your broker the following questions:
- Are you going to need a visit to their office?
- What paperwork is involved in the process?
- Can you send, online, the required document?
- On your submission, what is the turnaround time?
What are the fees for brokers?
It’s essential to know and understand all about the fees and expenditures that you’re going to have to pay. Although some brokers have no-obligation quotes, even if you decide not to accept the loan offer, others require you to pay a processing/administration fee.
It is also necessary to know and understand when, before you apply, after you apply or after you accept an offer, the charges will come in. Working with a responsible brokerage means working on your terms and conditions.
It is never worth it to get into a finance deal that is not cut out for the needs of your business. Not only will you be expected to borrow more than you actually should, but you will also miss out on a range of features that you can get from specialist lenders.
Funding11, the UK’s fast-growing finance brokerage, makes your life simpler by finding the right kind of loan offer for you. From all-purpose commercial finance solutions, our commercial finance services cover a broad range.
We have everything your company requires and more with a 24-hour turnaround, high approval rates, cheap interest rates and flexible repayment.