Things to Consider before Choosing a Commercial Finance Broker

Things to Consider before Choosing a Commercial Finance Broker
Things to Consider before Choosing a Commercial Finance Broker
July 13, 2016

Commercial finance brokers are life savers. Irrespective of the financial crunch, some commercial finance brokers are capable of squeezing finance into the pockets of the firms they represent. A financial broker with a good knowledge of the financial system and market trends is vital in selecting a financial broker.

Choose a broker with a verifiable record

Do not be fooled by websites that claim to be commercial finance brokers. Before choosing a commercial finance broker, be sure that you have a track record of their past success story. Some brokers will list a number of companies they have helped but in the real sense, they have never been involved with them.

Read also: Merits and Demerits of Purchase Money and Non-purchase Money Loans in Short Sales

The financial market is largely unregulated

It is unknown to many businessmen that the financial market is largely unregulated. Though there are financial stock brokers that would offer excellent services, the safety of your funds with them cannot be guaranteed. Choose a stock broker that is regulated by the Financial Conduct Authority (FCA).  Brokers under regulation by FCA are a safer card to play.

Stick with professionals in business finance

There are several fields of the finance just as the doctors have different specialties. Some commercial stock brokers would claim to be professionals in business finance even if their fields are residential mortgages, life insurance or other forms of finance.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

A professional in business finance is at a position to help your business better

A professional in business finance is bound to have a better knowledge of the market trends which means that they are in a better position not only to help your company financially but also to offer reasonable advice that will financially help your organization.

Your stockbroker should provide you all out service

The versatility of your stock broker has a lot to do with how better you would adapt to the system. Normally, there are various ways you can choose to finance your business but some stock brokers would stick to one product. They may serve you extremely well but they are invariably putting you at a disadvantage because if you happen to find yourself entangled with another broker that offers another product, it may become grossly uncomfortable.

Read also: What You Never Knew about the Small Business Administration Loans

A broker’s attachment to a lender can be costly

Some financial institutions are too attached to a lender. This may help them get easy access to finance when it matters the most but the drawback to this marriage is that they would be reluctant to refer you to lenders that come up with better offers.

Professional indemnity insurance will help you get your money if something goes wrong

Supposing something goes wrong in your transaction with a financial broker, how do you get your money back? If your commercial financial broker does not have professional indemnity insurance, it will even be impossible to sue them when something goes wrong. If a commercial financial broker has professional indemnity insurance, it is a way of saying that he can be trusted because the insurance company may have looked into his character before agreeing to insure him.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • Commercial finance brokers can help their firms secure loans even in financial crunch.
  • Verify the legitimacy of your broker before subscribing.
  • Choose a financial broker that is an expert in business finance.
  • If a broker is too attached to a lender, it will make them not want to seek for better offers.
  • There are different products a finance broker can offer to finance your business.
  • Regulated financial brokers are safer to deal with.
  • Many of the transactions in the financial world are unregulated.
  • When one is too used to a financial package, a change may be awkward.
  • Fraudulent commercial finance brokers use rich website to sway their victims.
  • It is important for your stock broker to have professional indemnity insurance.

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