After making the decision to use a broker to find the ideal lending solution for your business, you may struggle to determine the best person for the job. With so many options at your disposal, it pays to do your research and then sit down with any prospective broker before they get to work. Unsure what to ask them? Here are five questions that will tell you whether they are a good match for you and your business.
1. “What is your experience like with business loans?”
Some financial brokers only operate in certain industries, while others have experience with only a certain size of business. If the lender doesn’t understand your sector or the type of funding to help your organisation run smoothly, they may not be able to match you with the most appropriate loan type.
It’s important to scrutinise their background – asking for a few references can also help you get a better understanding of how they operate and whether they will align with your individual needs.
2. “How will you match me with the most appropriate loan?”
Unfortunately there are dodgy operators in every industry, and financial broking is not immune. To avoid getting caught up with a broker who doesn’t have your best interests at heart, make sure you find out how they will advise you of the best lending option – rather than just worrying about the commission they will make by pairing you with an unnecessarily large loan.
3. “What fees do you charge?”
It might seem awkward at first, but remember that this whole business relationship is based on money. So don’t be afraid to ask about costs upfront. Most financial brokers will charge a percentage on the rates they can lock in for you from the lender, but this isn’t always the case.
Be sure to ask about how much of a commission they charge, as well as whether they only charge the lenders rather than the client. To avoid any ambiguity, get everything down in writing and keep copies of the agreement.
4. “How many lenders will you approach?”
The best brokers are trusted partners of multiple banks and other lenders – not just one or two where they can get a hefty commission. Ask to see information on all the types of lenders they have access to, and find out whether they can get multiple lenders to compete for your business in order to attract a lower interest rate.
5. “How will you use my personal information?”
At a time when data breaches and cyberattacks are becoming more frequent, you need to take a proactive approach to protecting your information – especially sensitive data involving your finances. Because you will be sharing confidential information during the application process, ensure your broker uses secure software programs and that they don’t store any physical copies of your data in easy-to-access places.
At Capital Tree, we’ll match you with a business finance specialist from within our trusted network, who will work with you one-on-one to find a fast and affordable solution tailored to your business needs. Contact us today or call 1300 669 856 to start asking these important questions and get one step closer to securing much-needed funding.