What Is A Finance Broker?
What exactly is a commercial finance broker? A commercial finance broker works as a go between service for large corporations looking for a bank loan and small businesses looking for a merchant financing option. They arrange the companies business loan from beginning to end and generally charge either a flat fee or are compensated by the bank – sometimes both. The company’s business plan, current financial standing with the bank and creditworthiness of the company usually determine the amount of money they can borrow. As with all loans, there are many factors that go into the approval of the commercial loan including credit score, income, profits and debt to equity ratios.You may want to check it out finance Broker for more.
The purpose of a broker is to provide commercial finance lenders with an organized approach to apply for a loan through them. Most often a broker will handle the loan application, submit the application and provide periodic reports to the finance authority. A finance broker’s goal is to make sure the loan application is matched with a commercial lender that has an adequate amount of capital to make an offer. Most importantly, a broker provides a peace of mind to commercial finance lenders that they are working in an industry that is stable, which enables them to offer competitive rates.
Commercial finance is a very competitive arena. Because there is such a demand for qualified lenders, and the number of applicants to be reviewed and accepted is so high, the cost of a commercial loan can sometimes be high. Brokers bring needed contacts to the table, know where to obtain the best rates and have strong relationships with multiple lenders. Often, when a finance broker acts as an intermediary, and helps arrange multiple loan applications and get them approved.