Finance 8 April 2021

Six reasons to use an independent broker for business borrowing

Six Reasons to Use an Independent Broker for Business Borrowing

In the past it was the norm for small and large businesses to establish and maintain close working relations with their local bank managers.  Today, business borrowing is a slightly less intimate affair, typically involving the comparison of hundreds of deals from dozens of potential lenders.

This is one of the many reasons why business borrowing is best approached with the help and support of an independent broker. By working with a broker instead of approaching lenders directly, businesses of all sizes gain access to the following key benefits:

  1. Independent advice and support
An established commercial finance broker with plenty of experience will provide invaluable advice on the various funding solutions available. There may be a wide variety of financial products that technically suit your requirements, and some will be more flexible and cost-effective than others. Your broker will have access to lenders and lending products not available on the high street.

  1. Quicker and more convenient borrowing
The process of finding and comparing as many products as possible from appropriate lenders can be time-consuming. This can be greatly reduced by working with a specialist broker.

A broker effectively works in the same way as an automated comparison service, with the added benefit of the experience, expertise and intuition only a skilled broker can provide. All of which adds up to a faster and more convenient application process from start to finish.

  1. Inside knowledge and industry insights
Business owners know their businesses better than anyone else and have a unique understanding of their requirements, however, an experienced broker may have an entirely different wealth of inside knowledge and industry insights.

Borrowers are not expected to have an in-depth knowledge of things like average interest rates, borrowing costs, repayment options and the various factors that can influence loan affordability. These considerations are best handed to an experienced independent business finance broker.

  1. Brokers often have established relations with lenders
Many of the deal’s brokers access are not available direct to the borrower. This is due to the fact that brokers often have established long-term relationships with the lenders they work with, enabling them to access exclusive deals and preferential rates unavailable elsewhere.

In fact, there are many specialist lenders that do not work directly with clients at all, they exclusively provide their services via brokers within their networks.  This therefore makes broker support essential, if looking to get the best possible deal from the broadest range of options available.

  1. A broker negotiates for the client’s benefit
Getting the best possible deal on a commercial bridging loan can also mean knowing how to negotiate with lenders, which is where many independent brokers excel. They know how to present a case to a prospective lender, conduct comparisons to ensure deals are competitive and minimise as many borrowing costs as possible for the businesses they represent.

While it is technically possible to negotiate a good deal with a lender independently, doing so is significantly easier with a professional broker acting on your behalf.

  1. Working with a broker is cost effective
Lastly, some of the best brokers on the market provide their services and only charge a small sum, on success.  The bulk of their income is based on commissions payable by the lender, not the customer. This in turn means that the benefits of broker support could technically be free of charge.  It also means there is nothing to lose by finding out how an independent broker could support you.

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