Discover How Commercial Loan Brokers Can Help Investors And Business Owners
Business owners, investors, and developers help drive the economy. To grow their businesses and investments they often need to arrange business financing. The loans that are available for businesses, developers, and investors are provided by various lending institutions and through thousands of available lending products. Typically a business owner or investor knows their business very well but they don’t necessarily understand the financial and lending industry. This can make it difficult to know which lending products are the best for their particular situation.
How Do Commercial Loan Brokers Help Investors And Business Owners?
When a business owner or developer approaches a financial institution they do it to achieve their particular commercial goals. Even though they are experts in their fields it doesn’t mean that they have the expertise to fully understand lending products that are available through financial institutions. Any good business person recognizes their strengths and weaknesses and will, therefore, seek out experts to advise them in areas they are not expert in.
This is where commercial loan brokers can help investors, developers, and business owners. These individuals have an expert understanding of the various lending options available and can help navigate business owners and those seeking commercial loans so that they can put their effort into applying for the specific option that best suits their particular needs. Choosing the right lending option can make a tremendous difference not only in getting the loan approved but helping the business or development thrive.
What Type Of Services Do Commercial Loan Brokers Offer?
This type of broker is one who specializes in the financial industry and is an expert in helping business owners and investors get the loans they need for their commercial and business needs. Loan brokers are generally experts in all areas of commercial financing and they can guide a business owner through the landscape of getting the right commercial loan. When an investor or business owner attempts to do this on their own they could apply for the wrong type of loan.
When someone applies for the wrong commercial loan it can lead to a couple of different negative outcomes. First and foremost, it could mean that even after a lot of time and effort is invested into applying for the loan, it is ultimately turned down. The financial institution understands that the loan applied for will not get a positive outcome and therefore they are unwilling to make the loan.
The second possible negative outcome could be that the loan is approved but because it was not the best-suited loan it could cost a business owner or investor unnecessary fees, interest, and other costs. These undue costs could add a substantial burden to the success of the business or investment. It can mean the difference between an investment that is profitable and one that is not. It can also mean the difference between a business’s ability to grow or it can stand in its way of growth because of unnecessary costs.
When Is It Most Practical To Use A Loan Broker?
- When An Investor A Business Owner Is Unsure Which Loan Will Provide The Best Options
It is always important to remember that lending institutions are businesses and like all businesses, their goal is to earn profits. In order to achieve that goal, they come up with an ever-increasing range of lending products that they make available. The purpose of those products is to provide customers with a variety of choices when applying for a loan. Even so, the end goal is to profit from making those loans.
As business owners and investors we can’t fault the lending institutions for profiting. If they failed to do so then they wouldn’t be there to provide the loans that we need as business owners. But ultimately it is our business that is of the utmost concern. This means that we want to get loans with terms that are most agreeable to our business. Unfortunately, we may not understand the various products offered for commercial loans well enough to make that determination. That is where a commercial loan broker can help.
- When A Business Owner Needs To Be Introduced To A Wider Range Of Lenders
Traditional lending institutions often have a very narrow way making loan decisions. As business owners, it is often a matter of creative thinking that can help a business grow. In this type of situation, a traditional lending institution may not have the vision to see the value of making the loan. This is another circumstance where a loan broker can be of great assistance.
They are familiar with hundreds or even sometimes thousands of different lenders and they can help you decide which one might be best suited for your particular needs. This can be an invaluable service because otherwise, you may not get the loan at all. But when you’re introduced to the right institution who is familiar and comfortable with making business loans that don’t fit in the box created by traditional institutions then you are able to get your loan. This can often mean the difference between being able to grow your business and vision and not being able to.
- Help With Negotiating Terms And Fees
It is quite common for business owners, investors, and developers to be completely unaware that loan terms and fees are often negotiable. Very often the initial offer is not practical and if you were to accept the terms and fees initially offered it wouldn’t be a great opportunity. It is not always certain whether or not a lender will be willing to negotiate the terms but a business owner or investor should always attempt to do so.
Whether a traditional lending institution or not, anyone who is seeking a commercial loan should always attempt to negotiate the most favorable terms, fees, and interest rates possible. The worst thing that can happen is that the lender says no. But if they say yes then it can make for a much more positive outcome for the borrower. A good loan broker is often comfortable with making these types of negotiations on behalf of their client. They know how to push back to get lower fees and better rates.
Are There Different Types Of Commercial Loan Brokers?
Most loan brokers will commonly specialize. Some might focus on alternative lenders that can help a business who can’t get a loan through traditional resources. This broker will not only be able to introduce a business owner to these lending institutions but they can help negotiate the loan. If a company or business owner has reasonable credit and can demonstrate they have sufficient cash flow but we’re still not able to be approved with usual lender’s then this type of broker can be of great help.
Conventional brokers work with usual institutions but can be quite helpful because of their good relationships with those lenders. They have a firm understanding of what the banks and commercial finance companies want and they can help a business owner prepare a loan application so that it gets approved. Having this type of understanding is key when it comes to being approved or not.
Some Brokers specialize in helping businesses get a loan from the Small Business Association. This is generally considered a conventional loan that is simply backed by the SBA. This allows a business to get a loan that the lending institution might not be comfortable making otherwise but because of the protection offered by the SBA, they will approve the loan. The institution sees their risk reduced.
Although many of these situations are something that business owners and investors could approach on their own, it may not be a situation where they want to. They have not spent their lives becoming experts in this area and therefore getting the assistance of an expert can be quite helpful. It can save time, tremendous frustration, it can prevent mistakes, and it can ultimately help to achieve the approval of the loan being sought.
There are other areas of specialty that a loan broker may focus on. These include those who help a business who wants to open a franchise. These brokers often have expertise in both traditional loans for franchise purchases as well as having relationships with alternative lenders. If a business owner is wanting to open a franchise then getting the assistance of a loan broker that focuses on this type of loan can be quite helpful.
It is clear that there are some significant advantages to using an experienced loan broker. Most often these brokers can help business owners and investors avoid unnecessary frustrations and help prevent the business from wasting time. Most importantly their assistance can greatly improve the likelihood of getting the loan the business owner wants and needs. Although there might be someone who has the time and inclination to put it in the hard work of investigating the various options available for loans and learning all the ins-and-outs of successfully applying for one, the majority of business owners will find it very helpful to use the guidance of an expert.
Neal Business Funding has relationships with over 60 lenders which allows us to get you the best financing deal possible. Shopping your deal on your own is going to result in many credit inquiries which will hurt your credit score with each inquiry. Let us run your credit once and shop your deal across our array of lenders to get you the best deal for your particular situation. Call now to see what Neal Business Funding can do for you 315-699-4703 or fill out our contact form to the right.