What does a business loan broker do?

Answer in brief

A business loan broker finds lenders that are likely to approve your business, prepares and presents your application, compares the offers, and helps you get to completion. A good broker saves you time and can get you terms you wouldn't find alone. Most are paid commission by the lender.

The job, step by step

Learns about your business, the amount you need and why you need it.
Works out which types of finance fit, such as a term loan, asset finance or invoice finance.
Picks the lenders most likely to say yes on good terms.
Packages your application so the lender gets what it needs first time.
Compares offers on total cost, not just the headline rate.
Chases the deal through underwriting to completion.

When a broker is worth it

A broker earns their keep when your deal isn't straightforward: you've been declined by your bank, you need the money fast, the amount is large, or your situation is unusual, for example a new business or a dip in profits. For a small, simple loan from your own bank, you may not need one.

What a broker can't do

A broker can't make a lender approve you, and the lender sets the final rate and terms. Be wary of anyone who promises approval before seeing your numbers.

Questions and answers

Is a broker the same as a lender?

No. A lender lends its own money. A broker introduces you to lenders and helps you apply.

Do I have to accept an offer a broker finds?

No. You can say no to any offer. Check whether a fee is due if you decline, and get that in writing first.

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