The opportunities are endless for commercial loan brokers. There are many areas that you can focus on once you learn the business. Before we begin about how to choose a niche, it’s important to explain that you can become what they call a “generalist” when brokering commercial loans. As a generalist, you will do commercial real estate loans, equipment leases and loans, SBA Loans, Accounts Receivable Finance, and Factoring. All of these forms of finance create huge opportunities for commercial loan brokers, but they also can create a lack of focus and make your marketing a much more difficult task. If you drill down beyond the various products you can broker mentioned above, you could also look at products within the products. For example, for commercial real estate lending, you could specialize in multi-family dwellings, retail, shopping center finance, and so on and so forth. There are quite few different areas you can focus on when it comes to offering your services as a commercial loan broker.
Benefits of Niche Marketing
The reason focusing on one or two key areas is so advantageous, especially in the commercial loan broker field, is because doing so allows your firm to develop a higher degree of expertise. By working in the same market segment day in and day out, you will become immersed in all of the elements that make that sector unique. Over time, this in-depth experience will help your company emerge as a trusted resource, both for existing and prospective customers. You’ll also be able to dedicate your time, effort and marketing dollars to a much more targeted audience, increasing your ROI.
Helpful Tips to Narrow Down Your Niche Market
- The Ability to Adapt: The commercial lending industry is always changing, so it’s important for brokers to be flexible. Brokers need to be able to understand the way the industry is trending and to use that information to their advantage. Whether that means noticing a particular commercial property type seems to be doing well or that a large number of loans are coming due in a given year, it’s important for brokers to pay attention to the industry and adapt accordingly.
- The Desire to Learn: Because the commercial loan industry is ever-changing, brokers also need to constantly educate themselves about new developments. The more informed you are about the commercial loan industry, the better you’ll be able to serve your borrowers.
- The Right Network: Without trustworthy and reliable referral sources and lenders, a broker’s hard work might be in vain. Finding the right network of sources and lenders will allow you to place different types of commercial lending vehicles and serve the needs of many different borrowers.
Now that you’ve figured out which market your firm is best suited for, the real work can begin. Developing a strategy and establishing yourself as a key player in your chosen area of expertise isn’t something that happens overnight. It takes time and effort to truly achieve the results you’re after. That said, here are a few tips to get you moving in the right direction.
- Leverage Your Experience – On-the-job experience is extremely valuable and a critical component of successfully establishing yourself as a niche market expert.
- Build Your Portfolio – Focus on landing a few good clients and then build on that momentum. Over time, this will help your commercial loan brokerage to develop a reputation as a leader in your chosen market.
- Establish Alliances – In such a competitive industry, putting down roots in a specific segment can be challenging. Linking up with other professionals who are also related to the industry (but not direct competitors) can help.
- Promote Your Specialty – Once you’ve identified and begun conquering your particular niche, make sure your marketing efforts are aligned accordingly.
Making a name for yourself in one vertical market is a very successful path for most business loan brokers. It also keeps you focused and allows you to learn their jargon, equipment, and industries. This takes you from the “local finance broker” to a trusted advisor within the vertical markets you serve.