A commercial finance broker can be an invaluable professional to have on your team when looking to make smarter financial decisions for your business. Whether you are looking at overcoming short-term challenges or making plans to realise long-term ambitions, the right commercial finance solution can solidify your position and accelerate your growth significantly.

But what exactly does a commercial finance broker do, and what are the key benefits and considerations when using their services?

What does a finance broker do?

A commercial finance broker provides a go-between service for businesses that are trying to secure funding from commercial lenders. This is might mean securing a loan, finance leases, hire purchases, mortgages or cash flow products such as invoice finance on your behalf.

The broker will be with you from start to finish as they work with you to decide on the best product for your needs (ensuring you will be able to afford the repayments and relevant interest fees), identifying the lender(s) most likely to accept your application, preparing and submitting the application and facilitating the transfer of the funds from the lender to you. They should also be on hand to ensure you are fully aware of your current and future obligations when entering into any finance agreement, as well as explaining any potential tax benefits you may be able to access.

Why use a commercial finance broker?

There are several benefits to working with a commercial finance broker when making financial decisions for your business.

They are experienced in identifying the most suitable finance product

What is right for one business may not be appropriate for another which is why a competent finance broker will take the time to get to know your business, your goals, and the unique challenges of your industry. They are used to asking the right questions to make the most suitable recommendations.

They have an extensive knowledge of finance products

There are several finance products out there each with their own terms and conditions to be aware of before you commit. This can be confusing and overwhelming, but a finance broker will be able to help you understand your options to make the right choice for your business.

They have access to a wider range of lenders

Commercial finance brokers have relationships with multiple lenders and often lenders that you would not otherwise have access to. This can enable them to access lenders that are best suited to your needs or better interest rates than you would be able to find alone. At the very least, they will be better positioned to identify an appropriate shortlist of lenders to approach which saves a lot of time.

Using a broker saves you time and hassle

There are literally hundreds of potential banks and lenders to consider not to mention all the different products. Finding, comparing and contacting them yourself will be time consuming and potentially not productive if you are approaching the wrong lenders. A commercial finance broker takes on this work saving you time and stress.

They provide long-term vision and support

While some brokers might only be interested in standalone finance deals, the more reputable ones will want to establish a long-term relationship with your business. This includes being available once the finance has been secured to answer your questions and iron out any issues as well providing ongoing advice and support as your business grows and your financial circumstances change.

They can manage complex projects and challenging credit

If your business has a poor credit history, a complex corporate structure, or you have only recently started trading, securing finance can be more difficult. A finance broker is perfectly positioned to help you navigate these issues increasing the likelihood you will be able to secure finance.

They can help you realise your goals sooner

With a commercial finance broker helping you make the right choices, you will be able to secure the funding you need to achieve your goals sooner rather than later. Whether you want to purchase new machinery or equipment, to complete a fitout of your premises or simply bridge a cash flow gap, a commercial finance broker help you access the most appropriate solutions to boost your cash flow and support your success.

How do commercial finance brokers make their money?

This will differ depending on the broker you are working with but generally commercial finance brokers are either paid for their work via a commission paid by the lender, but in some cases there may charge you – the client – a fee for their service. In either case, they should be upfront and transparent about this from the beginning.

Questions to ask a potential 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.

Do you understand my industry?

Each industry has its own challenges, regulations, seasonal sales patterns, etc., so there is no one-size-fits-all approach to commercial finance. Working with a broker who has knowledge of your industry can be a big help when securing finance.

Do you have experience in arranging the finance product that I’m looking for?

Some brokers will specialise in asset finance, while others will primarily focus on loans or cash flow solutions. You may want to approach a broker with specific expertise in one finance product, but in some cases it might be beneficial to speak to a broker with a broader knowledge as they may be able to recommend more suitable solutions that you have not considered.

Are you independent?

Some brokers are part of larger financial organisations which can mean that they are restricted or influenced in terms of the products they can offer you and the lenders they work with. An independent broker like Bluestone will objectively assess the finance market and concentrate on sourcing the best fit for you and your needs.

How long have you been operating?

Of course, the length of time they have been operating is not a sure indicator of trustworthiness or quality of service, but in some cases being a more established brokerage might mean they have more experience and stronger relationships with lenders.

How many lenders do you work with?

Commercial finance brokers work with a panel of lenders, and the bigger and more diverse this panel is the more likely you are to secure the most suitable solutions for your business’ needs.  Therefore, it’s essential that you consider how many lenders your chosen broker works with. A good broker will go one step further and have direct communication with the decision makers and will know how to structure an application with more likelihood of success. This ensures your company can be put in contact with the right person and often speeds up the application process.

What support do you provide after my funding has been secured?

Finance brokers should not disappear after your funding has been secured; they should be in touch regularly to ensure that you are happy and able to offer ongoing support as your business’ needs change.

Are you FCA regulated?

Brokers who are authorised and regulated by the Financial Conduct Authority (FCA) 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).

Can I see recent testimonials from your other clients?

One of the best indicators of quality of service in a commercial finance broker will come from their previous clients. Ask for case studies and testimonials from other businesses they have helped to secure funding and conduct your own research where possible.

Why choose Bluestone?

Whether you are a sole trader, partnership or limited company, the team at Bluestone can help you to secure finance that will help your business to grow quickly and easily.

We are an independent brokerage working with a large panel of funders and have experience of financing just about every asset in every sector. After more than 25 years of arranging commercial finance we know what lenders are looking for and we can help you prepare the best possible application to secure the right finance. For further information on how we can help your business now and in the future, contact us today for a no-obligation conversation.

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