The business loan industry operates the same way as the real estate industry. When you look to purchase a home, you hire a broker that will help you find a home. When you find the right home, the broker helps you negotiate the price of the home, the terms of sale, and helps arrange the financing for you to close.
You rely on your broker to give you advice, present you with the best options, to get you the best deal.
Find a business loan is exactly the same. Business loan brokers are experts in business financing. You should rely on a business loan broker to get you the best deal. To give you the best advice. And to be on your side of the negotiating table.
Now, how do you find the best loan broker? How do you know if they are qualified?
Below are a few tips to find the right business loan broker for you.
Education and Experience
First, ask what type of education your business loan broker has. Where did they go to college? Do they have a masters or MBA? Did they study finance? Schooling is just the first checkpoint.
Next, look for a business loan broker that has been on both sides of the table. You want a business loan broker that has been a business lender before. Knowing how lenders operate is important in navigating the application process. You want to see what type of lenders they previously worked for. Make sure your loan broker can offer advice on different products, not just one.
Alternative Lending Solutions
Your business loan broker should have a variety of solutions to offer you. The solution should not be what’s easiest for them. It should be about what’s best for you!
Ask questions about what types of programs are available to you. You want to know the pros and cons of the solutions before deciding to pursue one of them. Ask about SBA Loans, Bridge Loans, Factoring, Lines of Credit, Equipment Financing, and Asset-Based Loans.
References and Reviews!
References. References. References. Ask your loan broker if you can speak with one of their clients and one of their lenders. You want to know if their past clients and their partners enjoy working with them. If they don’t enjoy working with them, why would you?
Online reviews are very important. The internet makes it easy to look for a company that people like working with. If your loan broker has no online presence an no reviews, look for one that does!
Business Loan Broker Fees
Avoid upfront fees at all costs. Why should a business loan broker earn a fee before they get you a loan? Most loan brokers have a success fee, which is a fee charged at closing. A success fee is very common and aligns your interests. If your loan doesn’t close, then your business loan broker doesn’t make any money.
Finding a reliable business loan broker can be challenging, but there are many things you can do to make sure you are in good hands. The simple checkpoints above are a great starting point.