There comes a time in almost every business’s journey where external financing is required to continue growing. Finance is therefore often seen as an accepted, yet complex part of running a small to medium enterprise (SME). Managing the operations of any business is challenging enough as it is, leading many SME owners to seek assistance in understanding the wide range of financing options and lenders available to them. When requesting support, your best port of call is a business finance broker.
Much like a mortgage broker, which you may already be familiar with, an experienced business finance broker will help you navigate the complex commercial financing landscape. After understanding your situation, they will help you select the most appropriate finance products available from their broad panel of trusted lenders. Business finance broker relationships can often last decades, so finding the right broker may benefit your SME for many years to come. Let’s take a look at what you need to know about finding the right broker for your business.
What does a business finance broker do?
A great business finance broker will take care of your financing needs from start to finish. Brokers often operate online or as part of a more extensive network of physical branches. Smaller brokers may offer a more hands-on, guided and personalised service whereas larger brokers tend to have a more developed process and range of lenders to source from. Either way, it’s essential to only deal with a broker that you trust to deliver the best result for your business.
“Brokers help you maximise your application with the lender, giving you the best chance at securing a great deal”
When you contact a broker, you’ll need to explain what you’re looking for and submit an application. They will usually ask for essential details such as your monthly turnover, funding requirements and age of your business. They then use their expertise to provide and recommend a range of product options that will be suitable for your situation. The broker will also be able to help you maximise your application with the lender, ensuring you stand the best chance at securing a great deal.
How do I know which broker is best for me?
There are many brokers out there, with the business finance market becoming increasingly saturated. This is good news for SMEs as long as you’re able to identify which broker is a good match for your business. When comparing different brokers, there are a few main criteria to consider:
- Dedicated service. Will you get a single broker to look after your business and your account? Personal service goes a long way, and developing a meaningful working relationship with your broker will pay dividends over the life of your business.
- Reviews and ratings. Don’t take their word for it. Does your prospective broker have proof of their excellent results and service? Check the internet for any reviews from past customers. A broker’s Trustpilot score is a fantastic indicator of what customers honestly think.
- Lending panel. Every broker works with a different range of lenders to service their clients. Have a look at who they have on their lending panel and make sure you’re comfortable they’ll be a good fit for your financing needs.
- Specialisation. Are they experts in one particular product or industry? For example, if you’re after equipment finance, then a specialised equipment finance broker will likely be your best bet. A business finance broker that usually works with established manufacturers may not be the most knowledgeable when it comes to sourcing deals for your startup restaurant.
Signs you should avoid a business finance broker
A great broker will help your business achieve your financial and operational goals by helping you source suitable funding. Working with a broker should be hassle-free, transparent and most importantly, deliver financing outcomes that serve your business well. Here are four red flags to look out for when choosing a broker for your business:
- You don’t hear back. You should have a direct line with your broker. They should be easy to get in touch with and make an effort to return your call as soon as they can. If you end up having to do most of the work to get deals done yourself, then they’re likely costing you time and money.
- They lack experience. While an eager fresh face is always nice to see, the best brokers leverage many years of knowledge and specialist experience. Research the history of your prospective broker to make sure they know what they’re doing and have the right connections.
- It’s not personal. A great broker knows that no two businesses are the same. If they don’t take time to understand your history and the finer details of your business, you probably aren’t getting the service you deserve. Be prepared to provide your bank statements, credit scores and other relevant information, so your broker has everything they need to source the best deal.
- Unnecessary fees. You should not be asked to pay money upfront. Brokers are paid by the lenders they use to source your financing. Be wary of business finance brokers that try to put you on the hook for their service.
Why use Capital Plus Finance as your business finance broker?
Whether you’re looking to sure-up your cash flow or take your growing business to the next level, your first move should be to source a great business finance broker. Capital Plus Finance is an experienced finance broker that has your best interests at heart. The team at Capital Plus Finance will do everything we can to help you secure a suitable finance solution for your SME. Please give us a call anytime to find out more or to have an obligation-free chat about your business’s funding situation.