Small business loan brokers can be very beneficial to you on your journey to acquire capital for your small business. The best small business loan brokers are experienced and well-connected in the financing world. They also have access to direct and indirect lending sources all over the country. Experienced, well-connected small business loan brokers who are ethical and have your best interests in mind should be able to help you secure funding. Small business loan brokers often get a bad rep and people tend to wonder why the need a small business loan broker. The fact of the matter is, the best small business loan brokers will help you simplify the process of obtaining capital. This is significant because raising capital can be difficult to obtain if you don’t know what you’re doing. The best loan brokers do this in 4 ways:
- They educate you on the many funding options available to you. There are tons of different funding options available to small businesses and thousands of sources of funding. The best small business loan brokers will educate you on the many different types of funding and help you determine which type of funding is going to be the most appropriate for you based on your unique situation.
- They analyze your personal credit, business credit (if applicable), and your financial situation to determine what you’ll most likely get approved for. All lenders have criteria in place that you must meet to get approved for funding. Many of those lenders will take a look at your credit reports to determine your creditworthiness and your financial data (e.g. bank statements, check stubs or w-2’s and tax returns) to determine your ability to pay back whatever you borrow. A small business loan broker who views this information before you go to a lender can tell you what you will qualify for after analyzing the information. This will give you a leg up with most lenders because you’ll already know what they expect of you. All you will have to do at this point is prepare yourself to get approved by meeting the criteria set in place by lenders.
- They refer you to the most appropriate lender based on your personal (or business) credit history and your financial situation. After a small business loan broker evaluates your personal (or business) credit history and your financial situation, they should be able to determine the most appropriate lender(s) to refer you to. The most appropriate lender(s) would be the lender(s) that will most likely approve you based on your current situation. This will save you from having to search for and apply to multiple lenders (that may not be appropriate for you) on your own.
- Persistence. Sometimes obtaining capital depends strictly on sheer persistence. The best small business loan brokers will continue to help you secure capital, even if the initial sources they refer you to don’t work out.
Overall, the best small business loan brokers will help you minimize the amount of time you spend searching for capital. Since the best small business loan brokers are already connected to a variety of different lenders and they know and understand what type of borrowers those lenders are looking for and they can match you with the source of funding that’s most likely to approve you. Working with a small business loan broker could increase your chances of getting approved for a small business loan, the first time you apply.