When many a potential loan borrower hears of a Loan Broker his first reaction is who on earth is that? Many of their well intentioned friends will assure him or her that is just someone there to help in making their hard earned cash disappear a lot faster. However, after approaching a bank or two, and wondering why it is so hard to get someone to listen to what they have to say, they will then seek out someone who can make this seemingly difficult task easier.
If you have used a Loan Broker before you can skip to the parts of the article that are of greater interest to you. A loan broker is someone who connects borrowers to lenders. A broker will have worked with different types and kinds of lenders over the years. They will also have gained lots of experience about Business Loans and Lenders from the many different kinds of loans they have worked on as well.
A Loan Broker has a vast knowledge of various types of loans. With this knowledge they can help you to avoid wasting time by applying for loans that are not in your best interest. The SBA has over 10 different types of loans, how many borrowers are there that have applied for more than 10 loans? Over the course of years they would have built up a relationship with several different lenders. This can be used to negotiate the best loan in your situation.
In filling out your application they can fill out just one application thus saving you time. Where instead of your applying to lender after lender they can simply take up the phone and simply speak to the lender about your particular loan and engage in negotiating the best terms and conditions on your behalf. If that does not work they can simply call another lender and save you a lot of time and effort.
Without knowing it your Loan Broker will be saving you both money and time, thus allowing you to focus on what is really important to both you and your business. There are many lenders who will not speak to a borrower asking for one document after another. Instead they expect to have all the necessary papers delivered to them as a loan package. Following this they and your Broker will negotiate what they can offer you by way of terms, conditions and time. When there is clarity on what can be offered only then is there a meeting setup between Borrower, Lender and Broker who acts as a go between.
Before this stage is arrived at many things have to be done in the background. This is where broker knowledge and understanding comes in. Even before an attempt is made to submit a loan package your broker goes to work. First there will be a series of questions that will be asked of you. A set of documents will be requested and they will be sought in specific ways. In short your Loan Broker will have begun working without any assurance of their getting your loan package or not. Their training would have predisposed them to seek answers that would make a loan package easier for a loan application.
There are some loans that by their nature, industry or by their very complexiety require complex funding solutions. Sometimes several different loans have to be bundled into one for the current need to be met. These are the occasions when your broker shines the brightest. The knowledge gained over the years from working on loans for different projects can now be brought to use on your behalf benefitting your company. If time is not on your side then this is even more of a reason to use a broker.
Most borrowers seek to obtain the best rates and terms but usually find that they do not have the time to research lenders nor do they have the knowledge to compare different loans and lenders. For such a situation as this there is only one way to work your way through the maze of lenders; many who make a multitude of claims online; find yourself a broker. Get one who already has a vast knowledge of lenders and loan types; one whom you can tap into or who knows how to do the research that will be beneficial to you. Also once the lender begins processing the loan your broker will be able for the most part to work with the lenders’ underwriting department thus freeing you up from the day to day issues that are sure to be raised.
Some Important Considerations.
Not only can Brokers save you money but they can scan the landscape of competing lenders and guide you to the most advantageous offers. What to you might appear to be a roadblock to your broker might not even be a bump on the pathway to your loan. When it comes to maximizing the most favorable terms and rates in obtaining your loan the broker who most likely has seen it before is best placed to negotiate the best loan features on your behalf via their deal making skills.
In cases of Commercial Real estate (CRE) brokers shine even more. There are so many different caveats in real estate that some lenders becomes specialists in offering loans to some niches. You have loans made for 1-4 units with others offered for 5 and above. Some are DSCR (Debt Service Coverage Ratio) specialists, where loans are divided into Cashout, Purchase or Refinance. Here we are speaking strictly of Commercial Loans with some extending to large apartment blocks. Depending on what it is you are seeking a loan for there is a Broker who will be qualified to guide you through the maze of all that is involved. In some instances there are whole offices staffed by brokers of differing areas of expertise.
Whatever your need appears to be I can certainly be counted on to guide you in the right direction.