To succeed in business, every aspect of your work requires meticulous planning. Everything from your marketing budget to your target market must be carefully considered in order to enjoy sustained success.
At the heart of a strong business is a strong financial position, which is why it is so important to do your research before committing to a business loan. Taking out a business loan can fund development and construction, commercial property purchases, and general business financing. These loans can help you secure the future of your business and set you up for success, but only if you approach them in the right way.
So before you talk to your bank, go and visit a commercial loan broker to see if you can get a better business loan.
What Is the Role of a Commercial Loan Broker?
The word broker means to arrange or negotiate, and that’s exactly what a commercial loan broker does for you. These professionals give you access to a wide range of commercial loans, and by getting to know your needs, they can match you with the best solution for your business.
Navigating the world of commercial loans can be a bit of a minefield, with so much jargon, terms, and conditions to wrap your head around. Unfortunately, the policies behind commercial loans are rarely black and white, but a broker can break them down for you.
A commercial loan broker will work hard to understand your needs, your personal finances, and your business’s financial situation. They can then identify a loan for you and negotiate the best terms in order to strengthen your financial position in the long term.
A commercial loan broker can guide you from start to finish, meaning they can also help you apply for the loan, get approved, explore other useful products, and look after your financial interests in the long term.
Commercial Loan Governance – Opportunity and Reality
Under Australian Federal Law, loans such as home loans are governed by the National Consumer Credit Protection Act (NCCP). The NCCP outlines strict lending requirements to ensure a fair playing field and to avoid exploitation.
While commercial loans are protected under Australian Federal Law, they are not covered by the NCCP. The amount of legal protection afforded to commercial loans differ depending on their purpose, and in general, commercial loans receive the lowest level of protection under the law.
When applying for a commercial loan, this lower level of protection actually presents you with an opportunity. It means that lending policies are more flexible, allowing you to get a better deal on your commercial loan with the right negotiation tactics and the best tricks of the trade.
However, the reality for many borrowers is that they simply walk into the commercial loan the bank offers them, resulting in more charges and an uncompetitive loan overall. With a lower level of legal protection, bodies like the Australian Securities and Investment Commission (ASIC) are then limited in the actions they can take if you wish to dispute a commercial loan.
When it comes to commercial loans, the difference between opportunity and harsh reality is finding the right broker.
3 Ways a Commercial Loan Broker Can Assist You
Now that you know a bit more about the commercial lending landscape and the role of a broker, it’s easy to see how they might be able to assist you. Below, we’ve outlined three key benefits that a commercial loan broker brings to the table.
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Helps You Secure the Best Deal (Not Just the One the Bank Is Offering)
When you really break it down, commercial loans are just products. And when you walk into a bank to apply for a commercial loan, they will be interested in selling you their product, not necessarily one that matches your best interests.
Think of it like shopping for shoes at the Nike store versus shopping at a store that sells hundreds of brands. If you really want the best fit, you need to look beyond a single brand or bank.
When searching for a commercial loan broker, look for a team that is not affiliated with any bank or financial institution. With an independent, whole of a market mortgage broker, you get access to hundreds of bank and non-bank lending options, and the broker will even narrow down the best option for you.
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Expert Negotiators
Let’s say the best commercial loan for you just happens to be from one of the big banks. If that’s the case, what’s the point in going to the commercial loan broker in the first place?
As we’ve alluded to a few times, the answer is expertise and negotiation. A commercial loan broker can negotiate with the lender to improve your interest rate, Loan to Value Ratio, and other features of your loan. They can also present your application in such a way that it makes you more likely to get a good deal.
If you walk into the bank you’ve been with for 20 years, they’ll see you as a loyal customer and exploit this loyalty by giving you a loan they’re sure you will accept. By applying through a broker, you’re taking years of experience, relationship building, and negotiation skills in order to help you secure a more favorable loan.
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They Speak Your Language (and Understand Industry Jargon)
We’ve said it before and we’ll say it again. Commercial loans can be a bit of a minefield. Commercial loan brokers can help you navigate this landscape because they’re industry experts. They understand what all the jargon means and how to leverage it to improve the terms of your loan.
A great broker will also speak your language. As well as breaking down the jargon into simple terms, they will help you understand what each loan and each feature means for your specific situation because they know your business so well.
Speak to a Commercial Loan Broker before You Select Your Business Loan
With an experienced, qualified and credible commercial loan broker on your side, you will be one step closer to securing a better loan for your business. It doesn’t matter if you have a bad credit history, limited documentation, or you just want the best advice. A professional broker can match you with a loan that works for you without any of the hard work.