Last Updated on: 22nd November 2023, 07:29 am
While more than 70% of all borrowers in the US understand and appreciate the advantage of using a broker for commercial finance, in the UK, that number is very different. Between 70-80% of all borrowing is completed directly with a bank, instead of using a broker. Knowing this, why even bother using a commercial finance broker?
You’ll Save Time
Everyone knows how valuable time is, and when you use a commercial finance broker, you will be able to save a lot of time during this process. Brokers will be able to quickly determine the best lender for each proposal, which means that they can quickly find the right lender for your needs. Additionally, lenders tend to work faster when dealing with a broker, as they understand that brokers have short time tables. Because they do not want to upset the broker and lose their business, lenders will work quickly to complete their jobs.
You’ll Enjoy Greater Choice of Lenders
By working with a broker, borrowers will be able to access larger numbers of lenders. This will include merchant banks, subprime lenders, private lending consortiums, development funders, and more.
They Offer Great Presentation
Another reason to use a reputable broker is that these professionals can package and present an application that will improve the possibility of the borrower getting the financing that they need. The broker is often involved in meetings between the lender and client to ensure that things run smoothly.
They Can Secure Great Rates
In addition, brokers can often secure the best possible rate for their clients. This can sometimes offset the fee that the borrower has to pay for the broker.
Why People Don’t Use a Broker
Even though there are many advantages to using a broker, many borrowers choose to try to obtain their financing on their own. There are three main reasons why borrowers neglect hiring a broker:
- Businessmen often feel like they can get the best deal on their own. As entrepreneurs, they do not want to have to outsource this task, and they will go from bank to bank if necessary.
- Many people have an outdated image of a broker and picture them working alone and without scruples. Modern-day brokers are qualified and work in a professional environment.
- There are many people who could benefit from using a broker but simply are not aware of any. Their accountants and bankers will generally refer them to a lender and not to a broker.
Using a professional broker who understands commercial finance, banking, and accounting is the best way to make sure that you get the most value for your fee. Because brokers can understand the larger picture for the clients, they are able to find the best lender for the need. Rather than dealing with a number of different bankers for your multiple needs, such as a management buy out or a full refinance, by working with a broker you can make sure that you have one person managing your financial needs and helping you get the support and financing that you need.
