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Bank versus a commercial finance broker

If your business needs finance, the default scenario is to go to your bank. However, the days of having a dedicated bank manager who knows your business inside out and can get you the loan you need are, unfortunately, behind us in most cases.

So, what’s the alternative?

Instead of seeking a bank loan, you could use a commercial finance broker to find and secure the finance your business needs.

Benefits of using a finance broker rather than going to your bank

Greater choice: While banks offer a wide range of financial products and services, they’re limited to their offerings and constrained by their internal policies and regulations. On the other hand, commercial finance brokers have established relationships with multiple lenders and financial institutions. As a result, they can provide businesses with access to many different types of financing options and lenders.

Flexibility: Banks generally have strict lending criteria and may require extensive documentation and collateral for loan approvals. They have established processes and standardised underwriting guidelines. In contrast, commercial finance brokers can offer more flexibility in finding financing options as they work with many lenders. Also, they may have access to specialised lenders who focus on specific industries or types of financing.

Increased chance of approval: Banks often have strict lending criteria and may reject loan applications that don’t meet their specific requirements. Commercial finance brokers can identify lenders with more lenient terms or specialise in working with businesses in similar situations. They can present your case in the best possible light, increasing the chances of loan approval. Brokers may also be able to assist you in improving your creditworthiness or financial position before approaching lenders, enhancing the likelihood of a successful loan application.

Time savings: Navigating the loan application process can be time-consuming and complex. A commercial finance broker can save you valuable time and effort by managing the entire process on your behalf. Brokers handle the paperwork, negotiate terms, and ensure the provision of all necessary documentation, streamlining the financing process.

Ultimately, a commercial finance broker can provide your business with more options, specialised expertise, and a streamlined loan application process, making them a viable alternative to traditional bank financing.

Should you go to your bank or use a commercial finance broker?

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