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Why use a commercial finance broker

10/01/2020

Commercial finance brokers can be a great resource for businesses looking to secure finance. But what are the key benefits and considerations of using their services?

Benefits

Find the most suitable solution

All businesses are different and as such have different funding requirements. What’s right for one company may not be the best for another – even when their challenges or requirements seem similar. This can make it hard to find the right solution for your needs. A good commercial finance broker will take the time to fully understand your business and its funding needs and challenges in order to identify the most suitable facility, taking into account a range of factors such as funding levels, service, relationship and cost.

Knowledge

With a multitude of options available, and lenders often using confusing terminology and varying how they structure and price their facilities, it can be challenging to identify the right solution for your business. Using a broker can make it easier to understand the market and find the optimal facility for your needs.

Save you time

With so many banks and independent funders to consider, the search process can consume a great amount of time and resource. A quick Google search will demonstrate just how many different lenders there are offering funding solutions to businesses, and it can consume a lot of time shortlisting a few and then contacting them. Outsourcing the task to a commercial finance broker means that you will have more time to focus on your core business whilst they find the solution that fits your needs.

Continued support

Once your funding is secured, a good commercial finance broker will continue to support your business by helping you to work through any initial teething problems and making sure that your funding continues to work in the long term.

Improve cash flow

The overall outcome of this is that, by putting the right funding in place, a commercial finance broker can help you to achieve all of your goals. Whether you want to purchase new machinery, buy a new business or simply bridge a cash flow gap a commercial finance broker help you access the most appropriate solutions to boost your cash flow and aid your success.

Considerations

Not all commercial finance brokers are independent

Some brokers are part of larger financial organisations and as a result may be restricted or influenced by what they can introduce you to. In contrast, an independent broker will objectively assess the finance market and concentrate on sourcing the best fit for you and your needs. This is crucial to securing the funding facility that ticks all the right boxes.

Not all services are fully comprehensive

Most commercial finance brokers work with a panel of lenders. The bigger and more diverse this panel is the more likely you are to secure the most suitable solutions for your business’s needs.  Therefore, it’s essential that you consider how many lenders your chosen broker works with.

Cost

Different brokers charge different fees for their services. Some will be remunerated by way of commission from the funder, others will take a one-off fee from the client. Some even offer their clients the choice. If you will be paying the fees you need to decide whether the value an expert is bringing to the table is worth the cost. But, given what the right funding could help your business to achieve, it’s worth getting help to find the most suitable solution for your needs.

Choosing a commercial finance broker

To help you find the most suitable broker, there are several questions that you need to ask. Put them to your potential – or even your current – finance broker to ensure that you’re getting the best support for your business’s needs and ambitions

1. Do you understand my industry?

Every industry is different from the next, with varying challenges and sales patterns. But most importantly, a business in one sector will have vastly different funding requirements than a business in another. A commercial finance broker that knows your industry and its challenges can be helpful in finding a funder that is suited to your ongoing requirements.

2. Do you specialise in the funding product that I’m looking for?

If you are looking for funding to fulfil a specific requirement, such as to improve cash flowbuy plant and machinery or to purchase a property, it could be beneficial to work with a broker who specialises in this area. This specific expertise will ensure you get the facility that is best suited to your goal. However, it can also be beneficial to talk with a broker who has wider industry knowledge as they could highlight other suitable facilities which you might not have thought of or initially dismissed.

3. Are you independent?

Some brokers are part of larger financial organisations and as a result may be restricted with or influenced by what they can offer you. In contrast, an independent broker will objectively assess the finance market and concentrate on sourcing the best fit for you and your needs. This is crucial to securing the funding facility that ticks all the right boxes.

4. How long have you been operating?

Whilst trading time is not directly correlated to success it can be a good indicator of how successful they are and how much experience they have of matching businesses with the right funders. Don’t just take their word for it though. Take a look at their testimonials, success stories and social media profiles to gauge what others thought about their services.

5. How many lenders do you work with?

Comparing a wide range of products, services and providers will increase the likelihood of your business securing the most suitable solution for its needs. Therefore, it’s essential that your chosen broker works with a large number of lenders. A good broker will go one step further and have direct communication with the decision makers. This ensures your company can be put in contact with the right person and often speeds up the application process.

6. What involvement do you have after my funding has been secured?

A good broker will keep in touch after your funding is secured to ensure that you are happy with the transition and that everything is running smoothly. This relationship will continue as your company evolves so that continue to have the best funding support for your changing needs.

7. Are you regulated?

Brokers who are authorised and regulated by the Financial Conduct Authority are subject to codes of conduct and disciplinary procedures that ensure they operate to the highest standards. It could also be beneficial to check for associations and affiliations with the leading industrial bodies that are relevant to their field of expertise, for example UK Finance, the National Association of Commercial Finance Brokers (NACFB) and the Finance and Leasing Association (FLA).

8. What are your fees?

Different brokers charge different fees for their services. Some will be remunerated by way of commission from the funder, others will take a one-off fee from the client. Some even offer their clients the choice. The important thing here is transparency. You’ll want to know exactly what the fee is and how it is paid so that there are no surprises down the line.

To see how Hilton-Baird Financial Solutions can assist your business as a leading finance broker, contact us on 0800 9774833 or request a call back.

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Some of the funders we work with

  • Investec
  • InvoCap
  • 4Syte
  • Creative Capital
  • Santander Corporate & Commercial
  • Trade Finance Partners
  • Close Brothers Invoice Finance
  • Leumi ABL
  • Roma Finance
  • Nucleus Commercial Finance
  • Secure Trust Bank
  • MarketFinance
  • Spotcap
  • Woodsford Tradebridge
  • Ultimate Finance Group
  • Innovation Finance
  • GapCap Cashflow Finance
  • Partnership Invoice Finance
  • Skipton Business Finance
  • Gener8 Finance
  • Peak Cashflow
  • Boost Capital
  • Catalyst Finance
  • Davenham Trade Finance
  • iwoca
  • 1pm
  • Regency Factors
  • Pulse Cashflow Finance
  • Haydock Finance Ltd
  • Davenham Asset Finance
  • Berkeley Trade Finance Ltd
  • Positive Cashflow Finance
  • Asset Advantage
  • Giant
  • Bibby Financial Services
  • Barclays
  • Calverton Finance
  • Royal Bank of Scotland
  • Metro Bank SME Finance
  • Lloyds Bank Commercial Finance
  • PNC Business Credit
  • Merchant Money
  • IGF Invoice Finance
  • Shawbrook Business Credit
  • ABN AMRO Commercial Finance
  • Team Factors
  • Aldermore Invoice Finance

Authorised and regulated by the Financial Conduct Authority (FCA number 730445)
We are a credit broker and not a lender and offer credit facilities from a panel of lenders

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