Since the housing crash of 2008, commercial lending has been on the rise. More and more people are starting businesses of all sizes, and many of these individuals are seeking alternative sources of funding. Banks and credit unions are still viable options, but many entrepreneurs are wary of the high interest rates and structured payment plans that come with those loans.
As a commercial loan broker, you can help connect these business owners with a variety of funding options. Not only does this aspect of the job keep it fresh and engaging, but you can be an integral part of helping a new company succeed.
At the Commercial Loan Broker Institute, we offer commercial lending training programs to help you enter this exciting field. In this article, we want to showcase what’s involved in commercial lender training so that you know what to expect as you learn how to offer commercial capital to your clients.
The Basics of Commercial Lending Training
As a commercial loan broker, you are not really in the financing business – you’re in the relationship-building business. One of the most crucial aspects of commercial lending is the ability to find both lenders and business owners and bringing them together. Businesses are looking for commercial capital, but they often can’t find it because lenders don’t want to spend time evaluating and educating every business that says, “I’d like to learn more about taking out a loan.”
Because your clients will want to utilize a variety of alternative lending sources, you need to build a rapport with a wide array of financing options. During your training, you’ll work with a mentor who can show you the steps to take to find these financiers. Some will specialize in a specific type of loan, while others may provide multiple options for entrepreneurs.
Becoming a commercial loan broker is all about finding the right methods for each project. Every entrepreneur and lender are different, so you need to be sure that they can work well together. Brokering these deals is less about sales and more about finding the right fit. As you connect borrowers with lenders, you develop the process of pre-screening and preparing borrowers to apply for commercial capital.
At CLBI, we understand the challenges that new brokers face, which is why our commercial lender training program is designed to help you build the right relationships. In many cases, new brokers have come from a sales background, so they have a much more commission-based focus. In this industry, however, the wrong people can sink a deal faster than anything, so you need to take a much more comprehensive approach.
Our training methods are revolutionary, and they can help you start your own brokerage business faster. Achieving success in this industry can be tricky if you don’t do it right, which is why training from CLBI is so valuable.
During the training course, you’ll learn how to secure funding for a wide array of loan types, including:
In many cases, business owners need to purchase new machinery, which can represent a substantial investment. These loans can be used in a variety of industries, from oil and gas refineries to restaurants. Usually, the owner will place a 20-percent down payment on the loan, and the equipment itself serves as collateral. If the owner falls behind on payments, the lender can repossess the machinery.
Constructing a new building is costly and time-consuming. Many developers will need to secure a construction loan to start working on a new project. These loans can be used for both homes and businesses, but as a commercial loan broker, you will focus on the latter. Often, construction loans have higher interest rates and shorter terms because they are riskier than other projects.
Cash flow can make or break a company. Enterprises with many outstanding invoices may turn to factoring to get the cash they need to stay in operation. Factoring companies will pay a majority of an invoice (usually around 80 percent) and then secure the funds from the client directly. These services are ideal for new businesses because they don’t require a credit check, and financing can be immediate – sometimes same-day.
Real Estate Loans
Right now, real estate investing is on the rise. More and more investors are looking to buy properties to either flip or use as passive income. Real estate loans are designed to help out with these purchases. Unlike construction loans, the money is typically used for a building that already exists, although some lenders will allow for new developments.
Hard Money Loans
Here is where your training in relationship-building will come in handy. Hard money lenders are usually individuals or organizations that provide cash to business owners directly, rather than working with a bank or financial institution. Hard money lending is often the trickiest to master, because you will act as the middle person, and you need to make sure that both parties are satisfied.
Typically, these lenders require collateral upfront, and they can negotiate favorable interest rates. Business owners that will get denied at a bank or that need access to commercial capital fast will seek these hard money or bridge loans.
Discover the CLBI Difference
Not only will you work with a highly experienced commercial loan mentor, but you will have access to our vast pool of lending resources. Unlike other commercial loan broker training programs, we don’t require a franchise free when you start your business. Our goal is to help you succeed, not to take your hard-earned money.
Contact us today to find out more about our training program and see how you can become part of the CLBI network. Becoming a commercial loan broker is easier than you might think – discover the path to financial freedom with us.