If buying an existing loan broker business doesn’t sound right for you, but starting one from scratch sounds intimidating, you could be suited for loan broker franchise ownership. But just what is a commercial lending franchise and how do you know if you’re cut out to be a franchisee?

Essentially, a franchisee (you) pays an initial fee and ongoing royalties to a franchisor; in return, the franchisee gains the use of a trademark, ongoing support from the franchisor, and the right to use the franchisor’s system of doing business and sell its loan services.

How to Choose a Commercial Lending Franchise

Once you’ve decided a franchise is the right route for you, how do you choose the right one? Start by investigating different commercial lending franchises which have the highest growth potential. Narrow the choices to a few companies you’re most interested in, then analyze your geographic area to see if there’s a market for that type of business.

Of course, you also need to do your own detective work. Start by going online to look up the company’s website, and read through any magazine and newspaper articles you can find about the company you’re considering. Is the company depicted favorably? Does it seem to be well managed and growing?

Once you’ve decided on a certain franchise through your preliminary research, you need to find out if this opportunity is as good as it sounds. Your next step is to analyze it thoroughly to determine whether it’s really worth buying.

Don’t be shy about asking for the required materials from the franchisor. After all, they’ll be checking you out just as completely. If they aren’t, that should sound a warning bell. Another warning sign is if the franchisor asks you to sign a disclaimer stating you haven’t relied on any representations not contained in the written agreement. Such a requirement could indicate the franchisor doesn’t want to be held responsible for claims made by its sales representatives.

Franchise Benefits

In addition to a well-known, already established brand, buying a franchise offers other advantages that aren’t available to the entrepreneur starting a business from scratch. Maybe the most significant is that you get a proven system of operation. New franchisees can avoid a lot of the mistakes startup entrepreneurs typically make because the franchisor has already perfected daily operations through trial and error.

Reputable commercial lending franchisors have been in business for some time and have done their fair share of marketing while also having large referral and lender networks available to you, so you’ll feel a greater sense of confidence that there’s a demand service. The franchisor can also provide you a clear picture of the competition and how to differentiate yourself from them.

Finally, with everything basically done for you, you will have the potential to grow quickly. Your time and money won’t be wasted on building a brand, marketing, creating a system or creating your own network of COIs, lenders, or referrals. Those things will already be available to you so you can focus on closing deals.

What Do You Have to Lose?

Although buying a franchise seems like a hole-in-one business plan, it has one crucial downfall – you are required to give some of your hard earned profits to the franchisor.

On the flip-side, starting a loan broker business from scratch may require more trial and error on your part, but you get to reap 100% of the profits of your hard work. The Commercial Loan Broker Institute is a business opportunity that is technically better than a franchise because you own your business outright and don’t need to pay any ongoing royalties or franchise fees.

In addition we support our students from the very beginning. We’re able to give them all of the tools they need to succeed and grow their commercial loan broker business from the ground up.