Thousands of small businesses in Australia every year experience some sort of difficulties and need some extra cash flow to sustain their business. Not always it is a problem such a covering a temporary short cash flow or an unexpected expense. In many cases, business owners have the opportunity to expand their business, buying extra stock or make a profitable investment, but they need some additional funding. In the market, there are many traditional financial institutions such as banks and alternative lenders that provide businesses with various types of small business loans.
What is a finance broker?
A finance broker such as Lending Connect is an intermediary between a business seeking a loan and a financial institution or a lender. A finance broker deals with the lenders on behalf of the client and arranges a loan with the best deal as possible. A finance broker specialises in financial products that help a business to understand the different loans options available in the market. Each small business loan product has pros or cons, which depends on the nature of the company, its sector and its current financial situation. A finance broker is focused on the client with their success in mind. The most crucial role of a finance broker is making their clients understand the advantages, disadvantages, opportunity and risks of the available lending options. A good finance broker is the one who educates the client because only in this way, it is possible to develop a long-lasting and trustworthy relationship. Many clients just focus on the interest rate, but they do not understand that any financial decision made in the present could impact on their future access to credit. This is why a finance broker can talk through, for example, the pros and cons of long term versus short term, or unsecured business loan against equipment finance. Clients have different needs, and various suitable finance solutions apply.
How much does it cost a finance broker?
The finance broker put in contact a client with a lender and for this service the financial institution pay a commission to the finance broker (one-off or introduction fee plus “trailing commission”).
What type of small business loan can a finance broker help with?
A finance broker assists clients in making decisions between secured or unsecured business loans, business line of credit, merchant cash advance, equipment finance or invoice factoring. A finance broker, when recommending a small business loan in any of its forms, always takes into considerations the advantages and disadvantages of each option.
Example: it could be hard for clients to understand the different lending criteria offered by financial institutions. The process of going online and reading pages and pages to find the right information could be endless. A finance broker who works with most of the lenders in the market can fast recognised which eligibility criteria a client possess. Some of the lenders are more flexible than others because they can take higher risk. The bad news is a higher interest rate applies, but the good news is a simpler and quicker approval process. There is no doubt that the interest rate is one of the main factors to consider when selecting a lender, but it is not a crucial factor. The primary objective when a requesting a small business loan is getting approved for the money needed. This is very important when the amount is necessary to purchase stock, raw material, or make an investment that increases the business revenue. At this point, the interest rate becomes marginal if it is generating revenue that the business could have generated without the loan.
Should you use a finance broker?
As a finance broker, at Lending Connect, we know that our free service does not suit everyone. Business owners have a different approach to credit: some of them only use the traditional financial institutions, some others follow their friends’ advice, and others prefer to do the online research to have full control of the process. Some businesses miss the point that a finance broker only works with its client in mind to find the best deal in the market. A finance broker is looking for a long-lasting relationship that brings more business and a positive word of mouth. We understand that borrowing money could be a painful process and to be 100% sure that you are making the right decision, always feel free to ask a second option if your current broker or lender does not convince you.
Contacting directly 5-10 lenders could be overwhelming for a client and time-consuming. A finance broker can do hard work and shortlist for you the best financial solutions for you to be chosen. If you are happy, your finance broker will be happy too.
We are famous for our 24-hours approval process
At Lending Connect, our team focuses on listening to your financial needs, goes through a pre-approval process and tell you what lenders you do qualify for. We have developed a one to one approach that allows us in 99% of the cases to get the money in our clients’ bank account within 1 day from the application. With our network of 50+ business loan providers, we open credit opportunities for your business. Thanks to our industry knowledge, we guide you through the process to find the lender that can provide the type and size of business loan that you are looking for.
(Totally free process will not affect your credit rating)
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