I’ve heard this question about small business loan brokers from business owners hundreds of times. Small business owners are often skeptical about what small business loan brokers can actually do for them or they simply don’t understand what value we offer in helping them secure capital. It is quite understandable, mainly because there are many self-proclaimed small business loan brokers who label themselves experts and have no clue what they are talking about. In my experience, there are several ways you can verify whether or not a small business loan broker is an actual expert. This includes:
- Asking them very specific questions – In working with small business loan brokers, it can become very apparent if they are only interested in getting a commission than actually helping you. If you ask them specific questions about the type of financing they recommend to you and they have a hard time answering your questions, that’s a red flag. There are many types of small business financing programs out there and they are not created equal. Therefore you have be sure that the small business loan broker you are working with is recommending something to you that makes sense for your business, and not just something that’s going to fatten their pockets.
- Asking them for proof of results – An expert small business loan broker will have a professional looking website, physical location, and be able to provide you with verifiable testimonials or recommendations. This should come from clients (who received funding with their help) and/or business partners and associates. I would also ask them if they have affiliates you can speak with. Many small business loan brokers refer clients to one another so it’s good to ask them for a reference from an affiliate broker. An affiliate broker most likely can be found online so you can research their background as well.
- Conducting a “due diligence” search online – If there’s one thing I’ve learned about determining who has integrity online, its their transparency. They should make it possible to be found easily, for you to meet them in person, and get feedback from other real people who have used their services or worked with them. Although meeting them won’t guarantee their an expert, you can feel confident that you have put forth the proper effort to protect yourself from a fraud.
The Bottom Line: Use Your Best Judgment
The key to determining if the small business loan broker you choose to work with is a legitimate expert, is to use your best judgment. It’s usually obvious when someone is being dishonest or trying to rip you off so it would be wise to follow your instincts.