What Is A Commercial Finance Broker?
A commercial finance broker (William John McCloskey) collects and arranges the necessary information from a borrower to complete a loan application (i.e rent roll, P&L statement, ect). The commercial financial broker also passes that information onto the lender so the lender can evaluate whether or not the borrower is able to repay the loan.
What Is The Advantage Of A Commercial Finance Broker Over A Bank?
An independent commercial finance broker is more flexible than a bank because he or she has access to a wide variety of funders, factoring houses, asset-based lenders or conventional lenders whereas a bank may not be very flexible because they have more restrictions which limits them from funding higher-risk borrowers.
For What Types Of Businesses Does A Commercial Finance Broker Get Funding?
Since a commercial financial broker has the ability to be more flexible than a bank, he or she can arrange funding for a wide variety of sources such as factoring houses (if a business has receivables), asset-based lenders, hard money lenders & conventional lenders. | |
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Not everyone in commercial lending is not as honest as WJM 7. Unfortunately there are many unethical lenders out there. The following five tips are presented to you so you can protect yourself. |
1. Be leery of upfront retainer fees
· Any lender who approaches you stating that you will be required to submit a large sum of money (greater than half of the loan amount) for due diligence (many times these deals never close and the borrower is out thousands of dollars).
2. Be aware of individuals masquerading as lenders
· Many individuals claim they are direct lenders when in fact they are just brokering the deal to another party without disclosing this to the borrower. It is imperative to understand who the decision makers are in the lending process.
3. Full Disclosure
· It is imperative that all information is disclosed up front that could materially impact the transaction (tax liens, title issues, and time sensitive issues). Somewhere in the process the lender will discover the information anyway. It is much better to disclose this information up front so that all parties can take the appropriate steps to comprehend and resolve the issues to ensure that there is not an impact on the loan closing.
4. Understand the process
· Many lenders/brokers do not fully explain the loan process including document requirements, site inspections, title, environmental, etc… To ensure no surprises, it is critical to understand the process and time required for each step in the process.
5. Deal sounds too good to be true
· Unfortunately many lenders and brokers prey on individuals with less than perfect credit claiming that they can repair their credit overnight, get them a loan priced at two points below prime, etc… If the deal sounds too good to be true, trust your instinct and do not proceed with the transaction.
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What is a Commercial Finance Broker?
