Posted on April 14th, 2022

Trying to sort out your financing options as a small business owner can be complicated. Many owners are so busy running their day-to-day business operations that they don’t have time to turn into a one-person finance department, too.

If this sounds like you, then turning to a business loan broker might be a good option. Business loan brokers can help you find the best financing options and streamline the loan application experience so you can focus on running your business.

A business loan broker acts as a middleman between you and lenders. You’re certainly free to shop for a business loan with each individual lender, and many people do. However, if you don’t have time or if you’re not confident about the loan-shopping process, a business loan broker can be handy.

Business loan brokers connect you with lenders they work with. The working relationships they have with specific lenders let them know which ones are best for your company’s specific financial situation. Brokers will send applications out to their lenders on your behalf, and if you’re approved, they’ll hand you off to your new lender to complete repayment on your loan.

Some business loan brokers may charge upfront fees to the borrower, but the more reputable brokers get paid by the lender. The cost varies, as there are no standardized or regulated commission rates. Most brokers charge between 1% to 6% of your loan amount.

Business lenders are institutions that loan out money directly from their own accounts to business owners. Business loan brokers, on the other hand, don’t lend you money, they find you the best lender and help coordinate the business loan application process.

Most business loan brokers specialize in certain types of business loans. So make sure you know which type of product you’re looking for first, and then choose a business loan broker that specializes in that product.

Original article: https://www.forbes.com/advisor/business-loans/business-loan-broker/