Business Loan Broker
Steps To Becoming A Successful Business Loan Broker
At its heart, a business loan broker is someone who is able to bring borrowers and lenders together to form an agreement. Part diplomat, part banker, part business person, and part negotiator – a business loan broker has one foot in the private sector and another in the world of finance. However, there is a lot that goes into being a business loan broker before any deals can be made.
Education Requirements For Business Loan Brokers
It is not uncommon for business loan brokers to break into the business with a GED or high school diploma. But, if you are looking to expand your scope and work with brokering mortgages or commercial loans, then a four-year bachelor’s degree in either business, finance, economics, communications, or psychology is required. The knowledge gained in these courses will go a long way in analyzing financial statements, negotiating deals, and steering conversations toward lucrative agreements. It also does not hurt to have a basic background in accounting and banking in order to match clients with the right type of financing.
Business Loan Broker Skills
Outside of the classroom and books, there are “soft skills” a business loan broker needs to be successful. Business loan brokers need interpersonal skills to not only speak professionally and deal with clients across a wide range of backgrounds, but to also help them fill out the correct paperwork, and answer their questions completely and with confidence. Loan brokers also need drive and initiative. They need to be able to spot people in need of business finance, and to think critically about what type of loan would work best for each client’s goals and current financial situation. It also cannot be stressed enough that a business loan broker should be able to make quick (and accurate) decisions, and have competent financial literacy to quickly evaluate the financial information supplied by your clients.
Business Finance Broker Training
Much like bank loan officers, business loan brokers must go through financial loan broker training to learn mathematical analysis skills, as well a business networking. Sometimes companies will sponsor refresher courses or training initiatives, which can certainly take a bit of the burden off of the cost of classes. It should be noted that certain states have specific qualifications that need to be met – usually regarding prior experience and (in some cases) criminal convictions. At the end of training, a test is issued, and after passing you will be able to get a license for our profession, just as a Loan Originator. As with other fields, licenses and certifications increase your chances for employment.
Securing a job as a business loan broker is easier if you have experience working in sales, lending, banking, or customer service. In order to cut your teeth in the finance industry, taking on internships (even if they are part-time) at banks and brokerage firm will greatly build up your resume and make your CV very attractive to employers. Many employers are also willing to put new business loan brokers on a training period to help them use their learned skills in real life situations. After the trial period, your employer will let you work on independent deals and projects, to see how well you perform in counseling clients, evaluating loan applications and analyzing financial statements.
The Benefits Of Being A Business Loan Broker
Business loan brokers can work for a brokerage firm, or they can strike out on their own and act as independent agents – getting hired by businesses that require specialized types of financing. Instead of going to lenders directly, businesses with hire business loan brokers to seek out lenders with the cash reserves and loan programs to fulfill their needs, and act as liaisons in negotiating the entire deal. On the other side of the coin, lenders are always on the lookout for business finance brokers to bring clients their way. In essence, business loan brokers with the initiative and drive to work with both lenders and businesses can make a very lucrative salary by sending opportunities in the right direction.
Earning Opportunities For Business Finance Brokers
Most business loan brokers are paid in the form of a flat rate fee, or a percentage of the deals they are helping to arrange, plus any residual fees built into the agreement. Some lenders offer commissions which are scaled to the size of the lending agreements, while individual businesses are more inclined to hire brokers if their fees do not make the overall amount too prohibitive. Most independent business loan brokers have more leeway in adjusting their fees up or down than those brokers employed by brokerage firms.
Striking Out On Your Own
The world of commercial finance offers a wide array of lending products for businesses and commercial real estate investors in need of money. Business loan brokers who prefer to work on their own might want to consider opening their own businesses and start making inroads with commercial lenders, as well as bringing over previous clients to help build their own portfolio without the lion’s share going to the brokerage firm.
Putting Numbers In Perspective
A business finance broker needs to be able to look beyond the bottom line. Offering only numbers is something that traditional brokerage firms do, and a lot of time is leads to deals that end up falling through the floor, because the amount of money a business needs often has little to do with why they need it or the reasons their current financial situation is the way it is. Independent brokers need to look at the full context of the needs and goals of clients. Similarly, lenders – while more focused on the dollar amounts – also need to know the full story as to why your clients present certain financials, what they need, and why they are seeking certain funding. This gives you and the lenders the ability to come up with alternative solutions in case the clients do not qualify for their initial funding requests. Experienced independent brokers treat their clients as partners, because they understand that their success and ability to get the funding they need translates good revenue for the broker.
Commercial Business Loan Brokers Do More Than Just Arrange Loans
Independent commercial business loan brokers do so much more than arrange loans between businesses and lenders. Brokers also work with entrepreneurs to refinance existing debt, arrange financing and leasing agreements for equipment, helping new business owners launch their startups and franchises, and even collect revenue from outstanding accounts for entrepreneurs. Businesses and investors look to finance loan brokers because they have the depth of knowledge to find the right type of financing to fit the situation at hand, and can present alternatives to conventional loans because there is no “one size fits all” solution when it comes to businesses. Every business is unique, and each business needs financing tailored to their circumstances and goals.
Independent Loan Brokers Have More Personal Freedom
As discussed earlier, business loan brokers have more freedom when it comes to their rates and the size of deals they can arrange. Similarly, independent brokers enjoy more freedom in their personal lives than those working for banks and firms. Frequently, brokers working for firms cannot explore or enjoy their passions, because most of their time is spent poring over financial statements and running between clients and the chain of command at their own brokerage firms. Independent business loan brokers, by contrast, can choose to work as much or as little as they want. Between residual revenue from smaller deals on up to those sizable agreements which can net tens of thousand of dollars at a clip, independent brokers can make their own schedules and pick their clients, rather than constantly pounding the pavement and spending late nights and weekends trying to make the numbers work for a small commission.
How To Start A Loan Broker Business
If you have ever been interested about how to start a loan broker business, consider our program. The Commercial Capital Training Group (CCTG) gives people the complete training and tools they need to become fully-fledged independent business loan brokers. Additionally, CCTG will introduce you to our board of lenders, so you can offer your clients a wide array of financing solutions to fit every need.
Our lenders can provide everything from factoring services on up to equipment financing, CMBS loans, financing for large ground-up construction projects, SBA loans and much more. The Commercial Capital Training Group will give you the opportunity to run your own business, and work the hours you want. Additionally, we will provide marketing and branding for your independent operation, plus around the clock support so you will never be caught without an answer or solution for your clients.
Our board of lenders and network of finance professionals have the decades of experience CCTG offers a recession-proof business model that allows you to eliminate getting a smaller commission from working for a brokerage firm, and instead get the rates and unlimited earning potential you deserve.
If you would like an all-in-one opportunity to get the training your need to be a commercial business loan broker, the independence of running your own company and setting your own hours, plus the full support of financial experts and lenders, check out what the Commercial Capital Training Group can do for you today.