What does a finance broker do?
If you’re new to the world of business financing, you’re likely seeing a lot of new terms that might need clarifying. One of them is the ‘finance broker’. Finance brokers perform an important role when it comes to business loans and can be the difference between you reaching a successful loan agreement or not. We’re getting back to basics and describing the role of the finance broker and how our professional service might be beneficial for your business.
A finance broker is a professional who works on your behalf as an intermediary between you and the lending world – typically banks and other lending institutions. Our interest lies in getting the best loan outcome for our client – you. You may have worked with a mortgage broker to secure a home loan; the finance broker’s role is similar for business loans and other credit agreements.
So why would you work with a broker rather than representing yourself in dealing with lenders? There are a couple of reasons you may want to consider it, the first being their expertise and experience.
Finance brokers know the best ways to approach lenders and will take over all the heavy lifting and detailed work of submitting an application. As part of this they help package up your business’s information and negotiate with the various lenders who may be interested in doing a deal. You do not need to pay the broker as their fee is paid by the lender, usually as a one-off ‘brokerage’ which is placed on top of the principle, before the interest rate is applied and repayments are calculated. Watch our 'Interest Rate Vs. Effective Rate' video for more information
Brokers get access to much lower percentage interest rates than a normal individual client. This is simply due to the volume of loan applications the manage and the time and effort this saves the lender.
Now that you know the basics of brokering the next step is to speak to one of our commercial lending specialists to see how the Matias Group can help your business to the next level. Book a chat here