Should you try and go it alone?
Commercial finance, business lending, commercial funding, revolving credit, invoice discounting/factoring, bridging, developer exit loans!
All of the above words are used on a day to day basis by many people in business but do you know what they are? Are they easy to obtain? Are they right for you business?
Today I want to talk to you about Business Finance, there are many types which can be applied for and used correctly in your business, to facilitate the next step, growth expansion, recruitment or to buy a shiny new thing!
The frustrations with Commercial Lending, or alternative lending as it is often know, is knowing what to apply for and when. Brokers play a massive part in this, similar to that of mortgage advisors when organising home purchases.
Here at Finance for Entrepreneurs we work of the basis of quality over quantity, consultancy over sales and the right thing over a quick buck.
What your business needs vs. what you want for your business.
Some of the easiest funding to obtain is working capital funding aka the straight up business loan. Unsecured, relatively well priced and normally over a reasonable term, up to 60 months. But is that the right option for your business?
See, the question isn’t always about “What do you want?” it’s typically about “What do you need?”. If you need to fit out a café bar or restaurant, a typical business loan for £30,000 isn’t going to be much use when a new cooker on its own might be worth £15,000, let alone the rest of the fittings and fixtures. In this scenario asset finance is the solution; but it might not be what you want to do.
A Commercial Lending Broker, like a good accountant, Lawyer or Mortgage Advisor, can be worth their weight in gold; if, they have taken the time to really understand your business, your wants and needs, and your frustrations to find the right finance facility for you and not just the best option for them.
Next time you’re thinking about funding for your business, just have a look for your local Broker. Here are a few things to check;
Are they FCA registered – Most good brokers will be registered so they have accountability on their service.
Do they have hundreds of lenders? – You don’t need hundreds of lenders on your panel to get the right deal, you need the right lenders. Don’t be fooled by a Financial Tech company who will just send your file to a multitude of lenders and not get a real answer if you’re refused.
Do they charge fees? – Typically a broker will not charge fees as they will obtain their payment via a commission or fee arrangement direct with the bank (normally an arrangement fee that you would pay anyway). If they charge an upfront fee, find out why and what value you get from that additional fee.
Is there value? – A brokerage doing their job correctly will be able to show value based on your Value Criteria, it may be rate, acceptance, term applied for or just that it’s completed quickly enough; but make sure you’re getting the value and expertise you deserve.
If your broker doesn’t tick all or most of those boxes, then feel free to drop us an email and enjoy the personal broker experience.