What Is A Financing Broker & What Can They Do For Me?

A financing broker is a facilitator between a borrower and a lender whereby the objective is to introduce a borrower to a lender who has the programs and lending facilities necessary to meet the borrower's needs.

A financing broker may also work on introducing a business owner to sources of equity capital as well where the goal once again would be to bring capital into the business.

There are significant pluses and minuses to working with financing brokers.

On the plus side, there are source of debt financing and equity investing that will only work through a third party consultant or broker for capital placement.  Therefore, without considering the use of a broker, there may be several forms of relevant capital that you would not be able to access by yourself.

Brokers that are specialized tend to have a good pulse as to what their lenders and/or investors criteria are at any given time, which allows them to introduce you to truly relevant sources of financing for your business.

The flip side is that many brokers are either not specialized, or try to facilitiate deals outside of their specialization. In both cases, you end up working with someone who may not know much more than you do and can ultimately waste alot of your time and money.

While the process of putting borrower and lender together is brokerage, I tend to categorize brokers as financing brokers or financing consultants. A broker provide the basic lender access and some level of application support.

A financing consultant on the other hand still is performing a brokerage service, but is providing a great deal more value added and is more concerned with the quality of the deal and how the terms and conditions will impact both the borrower and the lender.

A financing consultant has experience and credentials that demonstrate their deeper understanding of business finance and as a result, they are more likely to add more value to your business and help you avoid issues that are common with broker faciliated transactions.

Financing brokers can be a great resouce for locating capital for your business. Just make sure that the individuals you're working with are suitable for your situation and that the scope of the work you require done falls within their area of expertise and competence.

If you would like to speak with further about financing brokers, please click on this link.

From financing consultant to small business financing home