For a commercial loan broker, networking is top priority. In order to garner strong relationships with clients and lenders and to fund more deals, your networks should be large and diverse. Building these networks is important and will take time and effort. In every business, it is recommended that you spend a significant amount of time creating and expanding your network. Business loan brokers need to spend an especially large amount of time on networking in order to be successful.
Banker Networks
Banks turn down business loans at a rate of approximately 80% and it’s not because the bankers themselves want to, but because the requirements for obtaining a bank loan are often too much for small businesses. Young companies and businesses with incomplete financial records are almost guaranteed denial from a traditional bank. As an alternative loan broker, you have the ability to offer these businesses funding options that are within reach. In order to obtain the leads on these companies, you will need to build your banker network. The more bankers you have in your network, the more of these types of deals you will obtain.
Bankers will work with alternative loan brokers when they know that they will be getting something in return. Besides compensation for the referral, you are offering them a form of redemption. Business owners will appreciate the extra effort that the banker takes to refer them to you for funding and this means that they will likely return to that banker for future funding needs. A large banker network means more referrals for alternative loan brokers.
Lender Networks
Lenders come in many different forms and as a business loan broker, you will need to think outside the box when building your lender network. Investors are your most reliable source for funding your business clients. When building your lender network, it is important to understand what your investors are interested in funding. Many will choose to invest in certain types of business or they will only fund certain aspects of the business. It is your job to obtain as many options as you can for your clients’ needs. Your lenders are looking for a great ROI (return on investment) and you must be able to offer that to them. Make sure they know what your process is for determining who is a good candidate for funding and who isn’t. They will want to know that you are looking out for their best interests. It’s important to have a plan in place and make it accessible to both parties.
Client Networks
Your clients are just as important as your bankers and investors and will likely take a little bit more of your time. You will need to get to know them and their needs on a deeper level than your other networks. A large client network is important for your success as well as the success of your lenders and bankers. In order to create a large client network, it is important to create a plan that puts their needs first. You want to make your clients feel comfortable enough to do business with you while protecting their interests and providing funding in a professional and timely manner. It is your job to blur the line between personal and professional relationships with your clients and make them feel safe and comfortable working with you and your lender network.
Your networks are the pillar that holds your loan broker business together. Without them, you will not succeed. It is important to build your networks daily through email campaigns, follow-ups and social media. Use the internet to your advantage here by asking your followers what they are looking for in a loan, a lender, and a loan broker. Listen to the needs of those in your network and make changes where necessary. As a business loan broker, it is important to get to know your networks individually and understand where you can be of assistance to each one. Larger networks mean more income for your business and more success for you.