Many brokerages provide their clients with financing through their relationships with alternative lenders. As a result, brokers need to have a network of lenders available to be able to match clients with in order to get them the funding they need. Having a trustworthy and knowledgeable network can really help close loans, allowing you to help your clients and also help you make your commission. Remember that most of these businesses have already been turned down by traditional banks and they are in desperate need of funding, so it’s up to you to build a reliable network to get them the financing they desperately need.
Quick Tips to Get Your Name Out There
One of the hardest aspects of starting your own brokerage is getting your foot in the door. Here are some tips to help you add lenders to your network:
1. Be Selective: Your brokerage depends on your network. Make sure you’re approaching trustworthy and established lenders to conduct business with. Don’t simply choose the first lender who responds to your inquiries. Do your research and make sure this lender has a positive history of lending.
2. Approach Bearing Gifts: The best way to approach a possible lender is to already have a client. It allows you to have a real discussion of the client’s needs in the present instead of in the future or “if” you find the right client. It helps to speed up the process on both ends immensely and also helps to builds trust. The lender will be able to trust that you can bring them the right clients.
3. Look like a Stud: First impressions are everything; always make sure your brand and your website look their best. Not only does a great website look great to your clients, but also to your lenders. It helps establish you as the real deal. It will make them want to work with you as much as you want to work with them.
4. Use a Net, Not a Fishing Pole: Options are important for both parties. Don’t settle for one lender per client. With each client, approach multiple lenders. This will give you options to help get your client get the best loan option available. It also helps to save time if, for some reason, a deal with a prospective lender falls through, you don’t have to use valuable time to search for a new one.
5. Always Be Improving: Never be afraid to weed out the bad lenders in your network. Maybe one or more of your lenders is impossible to reach and will not respond to emails or phone calls. You should remove them from your network and look for others to replace them. Don’t settle for sub-par communication and results. Always strive to be better and your reputation will follow suit.
The Importance of Networking
Business loan brokers spend much of their time building their lender networks. Lender networks include investors, bankers, and financing institutions in different fields. Business size, number of employees, location, and niche are just a few of the deciding factors that brokers use when deciding where to place a client for funding. Lenders come in many different forms and as a loan broker, you will need to really think and organize your lender network. The larger a loan broker’s lending network, the more likely a business is to get the funding they need.
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 businesses 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 low risk level and 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.
Another easy way to network is through your loan broker training program. Many programs offer you access to their already established lending networks and will set you up with interviews and meetings with lenders that will match your brokerage’s niche. This is a great jumping off point for new brokerages, but don’t slack. You should still put in the time and effort to make new connections and expand those networks.