The commercial loan brokerage industry is a competitive market. For every borrower, there might be a dozen brokers trying to get their attention. How do you stand out in this playing field?  Finding your niche in the market can be the first step away from chasing clients and towards clients chasing you.

What is a loan broker niche?

A niche is an area of focus where a broker works. While commercial loans are a broad category of loans, they can be broken into niches based on the type of loan or industry that the broker might be working in.  By focusing on a narrower market, a broker can more quickly become a subject matter expert, or find deals in an industry they already know well. Additionally, a niche allows for the development of relationships with important players, quickly separating the broker with a top tier service offering.

How do you select your niche?

A broker should look at where they are most familiar and experienced.  What did they do before they became a broker? Is there an industry they know well? Answering these questions can help narrow down a niche and allow the broker to begin establishing a unique identity. 

These questions can be answered by looking at the connections that the broker already has.  Do they have a large network in a particular industry or is there a community in their area that is underserved? These can further help to find a niche if they don’t already have an area of expertise or skill.  The needs of the market are often the best solution for finding and growing a niche. 

The final solution to finding a niche is to find an interest. Is there a hobby or focus they would like to focus on? What do those industries need to succeed? Having a genuine interest in the area the broker is working in can help them feel more connected to their work, and lead to deals that they are more passionate about and driven to close.

Using that niche to succeed?

Finding a niche allows the broker to be better situated to make deals. They can use their connections with other brokers to not only learn but also find better deals.  A network of brokers will allow for each person’s niche to be filled as one broker sends clients to another based on their needs or location.

The broker can also leverage connections in that market or vertical. This is where knowing an industry well can help. Who are the people who work there, and what are they doing with their funding? Who are the largest lenders, and what are the pros/cons of each? Answering these questions allows for easy access to both funding and deals.

It is important that broker be open to evolution. Just because someone is familiar with an industry doesn’t mean they will find that industry to be the right fit as a broker. An adjacent one might open up though. Real estate might turn into a focus on multi-family dwellings, or equipment could turn into a specialization in a specific industry or vertical.

Additionally, it is important to recognize that success in a niche does not limit a broker. It just provides them with a better starting point in one area where they are more competitive than others.

A niche is essential. But it isn’t everything.

A well-chosen niche can rapidly accelerate a broker’s book of business.  It allows you to stand out in a competitive market and attract clients to you, rather than needing too aggressively chase them down.

But a niche alone will not a great loan broker make. Even if you have all of the best connections and detailed knowledge within a particular industry, if the rest of your business is not rock solid you will still struggle to grow in the long run. Ownership of a niche needs to be combined with a solid business plan, outstanding marketing, the skills to efficiently and accurately assess clients, and much more. If you are interested in strengthening your brokerage across the board, be sure to check out our large variety of commercial loan broker training programs and support programs.