A finance broker can be a great addition to finding the best loan for your business. If you’re looking for some funding for your business, but don’t know exactly what you’re looking for, or don’t have the time to look, then hiring a finance broker might be the best option for you.
In this article, we will be highlighting what a finance broker is, why you might want to use one, and how to find a broker that is right for you.
If you’re looking for a loan for your business, but you’re not sure where to start, then you can get a quote from us at Rise Funding. It’s completely free and will not affect your credit score.
What is a finance broker?
A finance broker is someone who helps their clients find funding for their business.
Finance brokers can be used for:
- Financial planning
- Finding loans
- Negotiation
- Networking
As finance brokers have longstanding relationships with lenders and other businesses in the same field, they will be able to find financial products that you may have a hard time finding yourself, and can also give expert advice about which products to go for.
Why use a finance broker?
A finance broker is beneficial for many reasons, mainly that they provide expert advice and know exactly what your business might need.
Here are four reasons why you might want to use a finance broker:
1. Save time & money
Using a finance broker can save time and money overall. Instead of wasting time applying for loans that you don’t qualify for or that don’t fit your needs, a finance broker will know exactly what you need.
A finance broker will do the legwork for you, and in the long run, you are likely to save time and money, as you’ll get exactly the financial product you need straight away.
2. Access to preferential rates
Finance brokers will know the most cost-effective solutions for every financial situation, as they will have dealt with the issues before. They will know the right products for the right situations, which is likely to save you money.
Plus, as a finance broker will have longstanding relationships with lenders, they are likely to be able to get better terms than you could get on your own.
3. Extra knowledge & skills
Finance brokers are experts in their field, which means they can provide valuable advice and guidance throughout the loan process. They can help you choose the right financing product and tailor it to your specific needs. They can also answer any questions you have along the way. Plus, if something goes wrong, they can advocate on your behalf with the lender.
4. Peace of mind
When you work with a finance broker, you’ll have peace of mind knowing that you’re in good hands. They’ll take care of all the details so that you can focus on running your business.
Finance brokers are also there for any potential issues that might crop up. If you run into financial troubles while you have a finance broker, then they will be able to advise you on how to pull yourself out of it.
What do finance brokers do?
Finance brokers can fulfil a variety of tasks, but their essential role is to find the best financing options for their clients.
Finance brokers can help you find:
- Asset finance
- Bridging finance
- Business finance
A good finance broker will shop around and find you the best financing products and interest rates from a wide variety of lenders.
This means you won’t have to waste time applying for loans that you don’t qualify for or that don’t fit your needs. And because brokers have longstanding relationships with lenders, they may be able to get you better terms than you could get on your own.
How to find a finance broker
Finance brokers can be found like any business, either online or in person.
Find a recommendation
A recommendation from a family member or a friend can be one of the best ways to find a reliable finance broker. Personal referrals can lead you to a trustworthy broker, and also give you unique insight into what it’s actually like to work with them.
Search online
If you don’t have any recommendations available, then searching online for a finance broker is likely your best option. This way, you can search for exactly the finance broker that you need, whether that be for a short-term business loan or a different form of lending.
What to look for in a finance broker
Before you sign with a finance broker, here are a few things that you should look at.
Regulatory & legal compliance
A finance broker should be compliant with regulatory and legal standards. If you are looking for a finance broker in the UK, a good practice is to check with the Financial Conduct Authority (FCA) to see if the finance broker is listed and compliant with regulations.
Reading reviews and testimonials from previous clients can also be a good way to determine the legitimacy of a finance broker.
Transparency
The transparency of a finance broker is incredibly important, as your business’s survival may depend on it. Before choosing a finance broker, you should make sure that they have all the details of their business available.
Make sure that the finance broker has their address available, either on their website or upon request.
Transparency with fees is also crucial, so make sure you know exactly how much you’ll be paying before you sign up. Avoid upfront fees too, as normally finance brokers will charge a commission.
What do finance brokers charge?
Finance brokers charge a range of fees, depending on the level of expertise and industry. Some finance brokers are free of charge.
Costs of a finance broker
A finance broker will typically charge a fixed fee or an hourly rate, depending on what you need the financing for.
Brokers will often charge a commission for their services, which will come from the financial product that they place their clients with. Some brokers may charge upfront fees, and other brokers may charge in both ways as part of a hybrid model.
Fee-free brokers
Some finance brokers are free, however, these are generally only mortgage brokers as they will receive their pay via commissions from lenders. This will normally be within the range of 0.35% to 0.4% of the total mortgage.
Conclusion
Working with a finance broker has many benefits. The main benefit is the peace of mind that you are using a professional to find the right funding for your business.
Finding the right funding for your business, whether you’re a new SME or an established business, can be difficult. At Rise Funding, we can help you find the exact funding you need.
If you’re looking for a business finance quote, but are unsure where to go, then you can get a quote via our website. We offer access to all types of lenders and also equip you with the knowledge to understand which finance product is right for you.
This quote will not affect your credit score and you can receive funding in as little as 24 hours.
