At Luminary Financial, we serve as intermediaries between small businesses and various lenders. After understanding your business and financial objectives, we leverage our industry expertise, experience, and relationships with lenders to secure loan offers with favorable terms and competitive interest rates for you.
Instead of navigating the lending landscape alone, our brokers handle outreach to lenders on your behalf, assist with completing and submitting your loan applications, and provide guidance throughout the funding process.
While utilizing a broker can save you time and help secure lower interest rates, a broker’s fee may apply for their services.
Types of Business Loan Brokers
Different loan brokers specialize in various areas, depending on your industry or specific lending needs:
Commercial Real Estate Loan Brokers: Help secure the best rates on commercial real estate loans and may also assist in finding real estate deals.
SBA Loan Brokers: Specialize in navigating the complexities of SBA loans and lenders.
Franchise Loan Brokers: Assist in finding franchises for sale, buyers, and lenders who finance franchise purchases.
Merchant Cash Advance Brokers: Help find merchant cash advance companies, navigate agreements, and identify potential issues.
At Luminary Financial, our vast network of lender relationships can encompass almost every type of business funding in the marketplace. Allowing neutrality in our offerings and prioritizing our clients needs above all else.
Business Loan Broker Fees
Ideally, the lender covers the broker’s fee, but sometimes the borrower is responsible. Fees typically range from 1% to 6% of the loan amount but can go as high as 15%. The commission percentage often depends on the loan size, with smaller loans subject to higher percentages. Some brokers add their fees to the interest rate, while others charge separately after closing the loan. Reputable brokers should not request payment upfront before securing your loan.
When to Use a Business Loan Broker
A business loan broker offers personalized assistance in searching for and applying for small-business funding. While not all businesses need a broker, startups seeking their first loan or companies requiring specialized financing, like commercial real estate loans, might find it especially beneficial. Consider using a broker if you:
– Prefer not to spend time searching for and comparing lenders yourself.
– Want a personal relationship with someone who understands your financial needs and can secure competitive interest rates.
– Need help submitting loan applications and general advice throughout the financing process.
– Are applying for a business loan for the first time.
– Require specialized financing, such as commercial real estate loans, SBA loans, or business acquisition loans.
How to Choose the Right Business Loan Broker
A good business loan broker should have relevant experience, a wide network of lenders, and the ability to meet your unique financing needs. Research or inquire about a broker’s credentials and training, as licensure isn’t required and the profession lacks federal oversight. Ask potential brokers:
How many lenders will see my application? Ensure they have a sizable network to submit your application to multiple targeted lenders for the best possible loan offer.
What does your process look like? Understand their services and operations before agreeing to work with them. If you need help completing applications, make that clear upfront.
How long does it normally take to get funded? Verify timelines to ensure they can provide financing within your required timeframe.
How long will I have to decide once I receive a loan offer? Ensure they give you ample time to consider offers without pressure.
How do you charge fees? Confirm their fee structure and costs upfront. Avoid brokers who are not transparent about their fees or who ask for payment before securing a loan.
Do you sell my information to third parties? Protect your information by verifying how they handle your data.
Business Loan Broker Red Flags
Not all loan brokers are reputable. Be cautious of brokers who:
Guarantee loan approval: No broker can guarantee approval, and legitimate brokers wouldn’t make such promises.
Aren’t concerned about your credit: Brokers should check your credit to match you with a lender. Claims of securing loans without a credit check are likely scams.
Have limited contact information: Reputable brokers should provide multiple contact methods, including a phone number, email, physical address, and website. Lack of contact information is a warning sign.
Ask for payment upfront: A trustworthy broker should not ask for upfront payment. Their success should align with your success. Clarify their fee structure during your vetting process, as lenders may pay them or you might use loan proceeds to cover broker fees.
At Luminary Financial, we aim to provide transparent, reliable, and efficient brokerage services to help your business secure the financing it needs. Contact us today to get started on finding the best loan options for your business.