A commercial loan broker is a professional who assists investors and business owners in finding loans for their commercial or business purposes. As such, a commercial loan broker is typically knowledgeable in every facet of commercial finance and can advise a business owner on how to apply for a business loan. They also have access to a sizable network of commercial lenders that enables them to secure the right funding for their business. To help the customer receive the best rates available, a good commercial loan broker will assist the business owner in negotiating the interest rates and loan terms.
Considering that certain brokers have a specialty in particular forms of finance, not all brokers are experts in all categories of commercial loans. In this article, we will discuss several different categories of commercial loan brokers.
Small Business Loan Brokers
Small business loans are traditional loans given to small businesses by banks, local lenders, credit unions, and non-profit lenders. Moreover, small business loan brokers earn money by assisting owners of small businesses in obtaining loans for working capital, equipment, expansion, and other small business funding. Typically, they receive a percentage of the loan amount approved by the lender. In addition, they are informed about financing options and connections to various lending partners, including standard and non-traditional banks and credit unions.
Conventional Commercial Loan Brokers
Traditional lending institutions offer traditional term loans and lines of credit, which are the focus of conventional loan brokers. Conventional loan brokers frequently have working ties with all the major banks, are well-versed in all the intricacies of business financing, and may even be knowledgeable about commercial real estate.
Equipment Lease Brokers
An equipment lease broker connects borrowers looking for business machinery or equipment with financiers who will buy the equipment for the small business, lease it to the business for a period of time, and give the small business the option to buy the equipment at the end of the lease.
Franchise Loan Brokers
Since the conventional and small business loan processes are the two most typical ways for business owners to obtain financing for the purchase of a franchise, a qualified franchise loan broker will be knowledgeable about both of them. Moreover, a qualified franchise loan broker should also be able to assist a franchisee in negotiating commercial real estate loans and securing whatever operating capital they require to guarantee the franchise’s efficient operation.
Alternative Loan Brokers
An alternative commercial broker is knowledgeable about non-bank alternative lenders, marketplace lenders, and online fintech lenders and assists borrowers in obtaining their finances. These loans are ideal for applicants with respectable businesses, solid credit, and steady cash flow but were turned down by conventional lenders. For instance, if your company needs working capital, inventory financing, payroll funding, or another type of financing in a week or less, a qualified alternative commercial loan broker can help.
Merchant Cash Advance Brokers
These are brokers that provide borrowers access to merchant cash. The funding businesses that provide merchant cash advances pay brokers and ISOs large commissions and referral fees in exchange for their recommendations and assistance in funding merchant cash advances. Typically, a merchant cash advance broker will direct the borrower toward the most advantageous and least expensive merchant cash advance.
Commercial Real Estate Broker
A commercial broker aids in the acquisition or refinancing of commercial real estate by businesses and investors. Typically, a commercial real estate broker helps their clients access a variety of commercial property financing options, such as small business real estate loans, conventional real estate loans, balloon mortgages, refinancing a mortgage, investment real estate loans, fix-and-flip financing, and bridging loans.
Final Thoughts
Hiring a loan broker can be a great option if you are a business owner looking for financial aid and investment. A broker would save you from the need to learn about all financial options, and their network and negotiating skills would help you get you the best possible deal on the market.
