How to Pick a Loan Broker

Choosing a business finance broker is a difficult task, because from the outside they all look the same. Whether you’ve been trawling the web looking for a loan broker or you’ve met one in person, how can you be sure they are trustworthy? When you’re making a big financial decision you want to know you’re receiving professional advice and getting the best possible deal for your business.

A broker understands the evolving world of business finance, and has positive relationships with a range of lenders. They can also introduce to new opportunities you may not have considered, including a variety of alternative finance solutions.  With the right loan broker, you could simplify your options and make sure you choose a competitive finance deal which is right for you. The term loan broker can be quite daunting for many people, especially if it’s the first time they are applying for long or short term finance. Some bad apples in the industry may have given loan brokers a bad name, however as specialists in financial solutions, they can do all the work for you to find you the best deal. Whatever you need a loan for, take a look at why you should consider a financial broker.

What is a Broker?

The financial market is saturated with different credit providers and lenders to choose from. A loan broker is generally an advisor, who can present different lenders to a client and help them make the right decision. They negotiate with different financial institutions and lenders on the client’s behalf, to arrange a suitable loan or credit solution. Basically, a broker shops around and does all the leg work for an individual, and then suggests the financial option which is most appropriate for the purpose of the loan and the circumstances involved.

Some loan brokers are specialised in a certain type of loan – for example you can hire the help of a mortgage broker when looking to buy a home. As another example, Genie Lending are commercial finance brokers specialising in alternative finance solutions.

Finding a Trustworthy Broker

As loan brokers are paid a fee by lenders and financial providers, they could have a tendency to suggest those who are offering more commission. Brokers should put the clients’ interests before their own, but how can you be sure? The best way to trust a broker is to check they are regulated and accredited by official financial authorities. You can usually see on a broker’s website which bodies regulate them, such as the FCA, ICO and Financial Ombudsman Service.

Commercial Finance Brokers

When you’re looking for a variety of options to funding your business, it’s quicker and easier with a broker. Anybody can go to a bank and apply for a loan, but if you want more chance of success you’ll have to think outside the box. Alternative finance solutions are growing in popularity, thanks to the ease of peer to peer lending and other options. If you’re considering going down this path, then you will need a broker to introduce you to individual lenders or they may have access to a crowdfunding platform.

If you’re looking for a trustworthy and efficient commercial broker, look no further than Genie Lending – call our team today for more information.

What to Check For?

The world of commercial finance is complex, and difficult to navigate without a broker. But how do you pick the right one? Here are some things to consider when choosing a commercial finance broker.

1. Check they are accredited

There is no point making enquiries with a broker unless they are accredited by a professional financial body – any finance broker without an accreditation should bring up a red flag. Who is making sure they are working responsibly, and in their clients’ interests? Most financial companies should be regulated by the FCA, and you should also look out for the NACFB logo (National Associations of Commercial Finance Brokers). Brokers registered with the NACFB have to follow a Code of Practice, so usually offer the best service.

2. Sector specialities

Many brokers have a specialist in a certain sector, whether it’s sourcing agricultural finance or experience in investment property.  If you work in a particular niche, then it could be worth searching for a broker who understands your industry. However, many brokers are comfortable working within a number of different sectors but you should tell them about your business before making a decision.

3. Ask for references

Before you buy any goods or services these days, it’s a good idea to gauge the happiness of past clients. Look out for testimonials and real reviews of the broker on third party sites or social media pages. If you can’t find any of these in the public domain, you could always ask for references from the loan broker themselves. It could also help to seek out references from a similar business, so you have proof of a success story within your sector.

How can a loan broker help my business?

To some people a loan broker can be a bit old fashioned; you might think it’s an outdated career because you can simply apply for a loan yourself. It’s not until you start researching and trying to compare rates that you might find out the reason why businesses often hire a broker.

Think of a loan broker as a travel agent – someone who helps you compare different products and puts you in touch with the right people to get the best deal. Some might argue that travel agents are obsolete now that you can book the majority of holidays direct, online. However some people will always decide to rely on the travel agent for two things – expertise, and a quality service which saves time.

So how can a loan broker help businesses with funding?

Save time and effort

The lending landscape is incredibly vast, and unless you’re a financial expert it can be difficult to understand. Instead of wasting hours on end researching the most appropriate loan for your business, you can entrust this task to a broker. This way you can get on with running your company, while you let somebody else arrange the funding for it.

Favourable rates

Just like a travel agent may be affiliated with certain airlines or hotels, a loan broker will also have contacts. They work hard to find you the very best rate, by submitting your details to a range of lenders and seeing if any provider can offer a special rate. You might only have time to compare two or three rates, whereas a loan broker could compare dozens, some of which you’d never heard of.

Expertise and knowledge

Loan brokers are experienced in all the banking and financial jargon that you might not understand. You never want to sign for a loan when you don’t understand the terms and conditions fully – the broker would be able to explain everything clearly and save you agreeing to loan terms you’re not happy with. Take advantage of the expertise and recommendations offered by a commercial loan broker. They will also have a broad knowledge of the alternative finance market, and a host of different options you may wish to explore. A broker may be able to introduce you to a new form of lending you weren’t familiar with, which could save time and money.

Ready to work with a loan broker? Give our friendly team a call today and we’ll find the perfect funding source for you.

Picking a loan broker is a big decision, so don’t just select the first one you come across.