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Why Should I Use A Business Loan Broker?

Updated: Sep 28, 2022

This article is for small business owners and entrepreneurs who seek assistance accessing business funding and are thinking of using a business loan broker.

Applying for business loans can be an uninviting process. Many lenders require extensive applications and expect expansive proof of business plans as well as specific documentation of past and present business status. With a good business loan broker by your side, you are navigating the dark corridors of business financing with a heavy duty flashlight (as opposed to walking into every financing barrier blindly). So if you're looking to scale your company to new heights, linking up with a commercial loan broker could provide a much needed lift.

What is a Business Loan Broker?

A business loan broker, otherwise know as a small business loan broker or a commercial loan broker, are individuals or companies who provide the service of helping small businesses apply for business loans and other financing options. Brokers receive a percentage of the repayment of the loan once it is delivered to the borrower successfully, in addition, there is often a professional service fee charged at the end of a successful loan process to compensate a broker for their time and resources.

Loan brokers don't actually decide whether an applicant is denied or approved for a loan, their job is to connect you with the best lender your qualifications allow you to apply for, contingent on your current (and past) financial situation. They will guide you through the application process and will even submit them for you, they are also able to submit applications to multiple lenders which saves you time and headache.

What Different Types of Brokers Are There?

  • Business Loan Broker (Commercial Broker)

  • Franchise Broker

  • Equipment Financing Broker

  • Alternative Financing Broker

  • SBA Loan Broker

Some brokers offer a number of different loan options and can help you with anything from SBA loans, equipment loans, business lines of credit to startup loans. Other brokers are very specific in what they offer and have strict requirements, but regardless of your broker's expertise, you want to make sure they are professional, patient, and attentive in their approach to helping you.

What Should I Look For In A Broker?

Finding a broker that can share your vision for the business and is truly dedicated to seeing your business succeed is a vital part of choosing the one suited for you. As with anything else, you should do your research to make sure you're working with a broker who is legitimate, check their site and their public profiles. Some brokers operate solely online and communicate via email or chat messages, I advise to always get on the phone with them if you can. Ensure your needs are being met and you're not getting rushed into anything without understanding all of the terms.

Brokers normally get paid by their lenders but in many cases applicants pay a broker's fee, otherwise know as a professional service fee, usually up to 6% of the approved loan amount.

Looking for a Business Broker?

Regal Business Group is a loan broker company that caters to startups and established businesses in need of financing options. With loan products that vary from startup capital, to equipment funds and general working capital up to 5 million dollars, RBG works around the clock to meet your business funding needs.

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