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Working with a commercial finance broker has many benefits other than the ones that are obvious. Here’s why and how it can save you a great deal of time, money and hassle.

The commercial finance sector has long been a mystery to most businesses that have wanted to borrow money from time to time. The days of simply walking into your local bank and finalising a handshake deal with the manager are long gone. Banks – despite their best efforts – are hardly able anymore to cater to the huge capital demands that UK businesses have.

Naturally, private lenders have managed to fill this gap in supply. But that has also spelt trouble for the borrowers in terms of predatory lending and other ills. Moreover, many borrowing businesses don’t have at their disposal the necessary experience to understand all the aspects involved in a commercial loan. This is where commercial finance brokers come into play.

There are many reasons why you should use the services of an experienced, responsible and licenced broker.

Before We Start – What Is A Mortgage Broker (Or Finance Broker)?

Many people – especially those who haven’t borrowed before – have a flawed understanding what finance brokers really do.

In the simplest of words, a finance broker or a mortgage broker is a professional entity (an individual or a firm) licenced to offer expert finance advice and match your loan requirements with suitable offers from lenders.

Brokers operate in almost every lending sphere – from small-scale personal finance to large-scale commercial finance. Commercial finance brokers (like Commercial Finance Network) specialise in helping businesses find just the right kind of finance deal.

While the finer aspects of why you should use the services of a broker will be discussed below, it should suffice for now to say that an experienced broker can help your business through tricky situations of cash and/or credit crunch.

Why Approaching A Lender Directly May Not Always Work

Getting a business loan used to be a straightforward affair not too long ago. Just contact the local bank branch or high street lender, let them know of your requirements and accept one of their ready-made finance products – easy as you like.

The simplicity in this structure, however, came at your expense. Getting into a retail finance deal is almost always a bad idea for a business because it’s not only more expensive, it fails to bring to your notice all the possible options you can choose from.

In addition, approaching lenders directly is a tedious and time-consuming process, regardless of how straightforward it may seem to be. If a lender turns your application down, you have to repeat the whole process again, leading to multiple soft and hard credit checks that leave their footprints all over your credit report.

Here’s why using an experienced broker gives your loan application an edge.

1. Brokers Make Borrowing Easier, Faster And Safer

Approaching a lender directly for a commercial loan may not always be the best idea, as we just discussed. It can not only drain your resources quickly; it also almost always leads to you getting a rather unfair deal.

Commercial finance brokers help you avoid this scenario by making the entire borrowing process smoother, faster and safer. Commercial Finance Network, for example, is among the handful of brokers out there who have an impeccable track record of turning around loan applications within 24 hours.

Moreover, all licenced brokers are obligated to treat your personal details with utmost care. When you use a broker’s services, you’re still in charge of your application, at all times. 

2. You Get To Choose From Offers You Would Otherwise Have Never Seen

This is probably the most important benefit of using commercial finance broker services.

When you approach a lender directly, they can only produce quotes that are drawn from the products they already offer. There is no room for customisation, and you will often have to make do with incompatible loan products just to save the day.

For example, if you’re applying for asset finance and the lender only offers lump-sum business loans, you will be left with an offer that makes no sense in terms of your requirements.

Working with a broker eliminates this problem altogether. Many lenders work exclusively with brokers and offer broker-only finance products that wouldn’t be accessible to you if you were to approach them on your own.

You can go a step ahead and work with a whole of market commercial finance broker like Commercial Finance Network to make sure that you receive offers from UK-wide lenders.

3. Brokers Can Save You Money

If you’re worried about broker fees and charges, you shouldn’t be.

Brokers who work with specialist lenders are often able to produce quotes that are much cheaper than their retail counterparts. Eventually, the money you save in the form of lower interest rates and faster disbursals outweighs any broker fees you would be required to pay.

An FCA-regulated and responsible broker like Commercial Finance Network will never charge you hidden fees. You will know exactly how much you’ll be paying before you get into a deal.

4. You Can Access Specialist Lenders

Specialist lenders are typically small to medium sized lenders who only offer highly specialised finance products like invoice finance, development finance and HMO loans.

Since it saves them a great deal of hassle, many such specialist lenders prefer to work exclusively with brokers. In essence, using a broker’s services helps you unlock offers from specialist lenders.

Working with specialist lenders also means that the lender can offer invaluable business insights and advice, making every loan offer that much more rewarding.

5. You Cannot Buy Experience

A reputed broker brings with them years’ worth of experience that you cannot really put a monetary value on.

Such brokers know how to navigate through tricky finance situations that you wouldn’t otherwise be able to handle on your own.

Whether you want to fast-track your BTL loan, get a business loan despite poor credit history, seek guidance regarding a particularly unique valuation and planning permission problem or customise your repayment plan based on your income, an experienced broker like Commercial Finance Network can certainly help you.

6. Brokers Understand Your Affordability Better

Unfortunately, over the years, both borrowers and lenders have time and again managed to downplay the importance of understanding creditworthiness and affordability. This has, quite predictably, paved the way for unreasonably structured, unfairly priced loans that – at times – border on being predatory.

Using a commercial finance broker means you conveniently stay away from this debt trap. Brokers know how to best judge your affordability based on your income, your assets and your spending, allowing them to only produce offers that are in your best interests.

7. Brokers Can Offer Precious Financial Advice

There’s a world of difference between personal finance and commercial finance – a fact many borrowing businesses fail to take into account while applying for a loan.

Poor judgement and uninformed decisions lead to mistakes that the borrower has to live with for years, if not decades. You can get around this problem by soliciting financial advice from a responsible broker like Commercial Finance Network.

Summing Up – Here’s Why You Should Use A Commercial Finance Broker

  • Save time and energy
  • Choose from market-wide offers
  • Save money
  • Benefit from the broker’s experience and expertise
  • Stay away from unaffordable loans
  • Avail expert advice from FCA regulated professionals

Choosing A Commercial Finance Broker – Things To Keep In Mind

Now that we’ve talked at length about what a commercial finance broker brings to the table for you, it’s time to see what you should look for while choosing one.

There are no yardsticks or guidelines set in stone here, but the following points will certainly help you make an informed and educated choice.

1. Are They Licenced And Regulated By The FCA?

This is perhaps the most important question you should ask.

The Financial Conduct Authority is the sole and stringent regulator of all commercial finance activities in the UK. As a rule of thumb, you should refrain from working with brokers who don’t have the FCA licence.

How To Check If Your Broker Is FCA Regulated

Checking whether your broker is FCA-regulated or not is easy. For starters, regulated brokers will have the FCA reference number and other associated information prominently displayed on their website. If they haven’t, you can always contact them regarding the status of their licence.

You can cross-check this information by visiting the FCA register.

For example, Commercial Finance Network is FCA regulated with reference number 796413.

2. Are They Associated With Any Trade Organisations Of Repute?

This isn’t really a non-negotiable, but it still gives you a good idea of the standing the broker enjoys in the industry.

Look for any certifications and memberships that lend credibility to the broker’s operations.

For example, Commercial Finance Network is a proud member of the National Association of Commercial Finance Brokers (NACFB), the largest trade association of UK-wide brokers.

3. Do They Handle Your Data Responsibly?

All businesses are required to handle your personal information and other data they collect responsibly. This applies even more so for brokers who need to collect your important personal and financial details.

When you visit your broker’s website, look for the data protection policy and/or privacy policy page. It is usually located in the footer section of the website.

A responsible broker is typically GDPR compliant and registered with the Information Commissioner’s Office (ICO).

For example, the Commercial Finance Network website is fully GDPR compliant and registered with the ICO.

4. Do They Specialise In Commercial Finance?

Many brokers out there try very hard to merge personal finance products with their commercial counterparts. This isn’t usually a good idea since commercial finance is much more robust in terms of product flexibility and variety.

If your broker offers exclusively commercial finance products like asset finance, business loans, HMO finance among others, it’s a good starting point.

5. Can They Compare The Market?

Whole of market brokers can compare the market and find lenders who are willing to base their quotes on your requirements. In the long run, this has an immense positive impact on your borrowings.

6. How Does It All Work?

Ask your broker the following questions to understand how their services work:

  • Will you need to visit their office?
  • What paperwork does the process involve?
  • Can you submit the necessary documents online?
  • What about the turnaround time on your application?

7. What Are The Broker Charges And Fees?

It’s imperative that you know all about the charges and fees you’ll be required to pay. Many brokers offer no-obligation quotes, while some may require you to pay a processing/admin fee even when you decide not to accept the loan offer.

It’s also important to know and understand when the charges will kick in – before you apply, after you apply or after you accept an offer.

Working With A Responsible Broker Means Working On Your Own Terms

Getting into a finance deal that isn’t cut out for your business’ requirements is never worth it. You will not only be required to repay more than you really should, you will also miss out on a number of features that specialist lenders can offer you.

Commercial Finance Network – a leading whole of market broker in the UK – makes your life easier by finding just the right kind of loan offers for you. Our commercial finance services span the entire range – from all-purpose commercial finance and mortgages to customised asset finance and invoice finance solutions.

24-hour processing, high approval rates, cheap interest rates and flexible repayment – we’ve got everything your business needs and more. Complete this short online form to get started or call us on 03303 122 646 to speak with a Specialist Mortgage Advisor now!

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