If you’ve ever been in a situation where you needed to take out a mortgage or loan but, didn't know which providers had the best rates and most competitive offers, then you know why making use of a broker is a good idea.

Because they can help you navigate this complex and highly saturated market with ease and speed.

What is a broker?

Firstly, is it important to understand what or who a commercial finance broker is. They act as the intermediary between lenders and the people or businesses that make use of their services.

They find the best finance deals suited for you as they have many industry contacts and also understand the terminology better, therefore giving you a good experience by explaining the process and jargon in a way that is easy to understand.

What do commercial finance brokers do?

Simply put, they work as an intermediary between banks and people or businesses.

Their role as an intermediary is to help the borrower find exactly the right kind of loan that best suits their needs and resources.

Brokers have built up many great relationships with major UK banks and therefore have a vast array of contacts in the banking world.

Some reasons to use one

  • Access a large number of alternative of lenders.
  • Find the best deals just for you.
  • Leverage their industry knowledge.
  • They know what they are doing and can, therefore, save you time.
  • You will save money.
  • You will have less stress as they deal with all the fine print and red tape.
  • Ongoing support is provided even after the transaction is complete.

Why should you use a broker?

If you own a business and, are in need of business funding, brokers will find the best solution for your business. Not all businesses are the same and without help, you might choose a funding package that is not perfectly suited to your needs.

This is why brokers are such a big help. They will take the time to understand your business and requirements and, will also be able to make useful suggestions which you might not have thought of.

They will have sufficient knowledge to get you what you need when you need it in an efficient and stress-free way. Using a broker to find a property loan is crucial to not only getting a good rate but also to ensure approval.

How to choose a commercial broker

There are a few questions that you must ask yourself when trying to determine which broker to use. Please note these are primarily business-specific questions.

  1. Does my broker understand my industry? (Sales patterns, growth, demand, marketing, etc.)
  2. Are they independent? (If not, they can be restricted by what they can offer.)
  3. How long has the establishment been operating? (Length of operation can link to the success of the business.)
  4. How many lenders do they work with? (More lenders means they will have a better chance at finding the right loan just for you.)
  5. Is the broker's establishment regulated? (National Association of Commercial Finance Brokers as well as the Finance and Leasing Association)
  6. What will the fees be? (Once off fee from the client or a commission from the lender.)

Popular brokers in the UK include:

  • Commercial Finance Network - London
  • Hilton-Baird Financial Solutions - Southampton
  • Pure Commercial Finance - Cardiff, London and Birmingham
  • WF Financial Solutions - South Yorkshire
  • Catalonia - Flintshire
  • Commercial Finance Brokers UK Ltd - England

This is only to name but a few located in the United Kingdom. There are many more to choose from and, your location will more than likely play a role in helping you pick.

All these institutions have websites with live chat options, as well as an enquiry section where you can find out more about the business.

Who can use such services?

Anyone can use a commercial finance broker. From the huge and established businesses earning millions of Pounds a year to the small start-up businesses who are just trying to find their feet.

They help you according to your situation and therefore offer you tailor-made loans best suited to your needs and situation-yet another great reason to use one.

Important stats relating to the industry 

In July of 2019, a report was released stating that UK lenders had approved more than 290 000 overdrafts and loans to small and medium-sized enterprises which are also referred to as SMEs.

The British Business Bank stated that commercial finance brokers who act as intermediaries are the reason that businesses are 25 percent more likely to have high growth rates and become high growth entities.

Another study showed that due to the services of brokerages, industries such as property, manufacturing, construction and professional services have seen much growth.

The Bank of England supplies statistics from a variety of aspects such as financial markets, external business, income, expenditure, effective and quoted interest rates and credit and regulatory data. Under regulatory data is where lenders lie.

According to the publications of the Bank of England, statistics for March 2020 are as follows; outstanding mortgage loans collected to the value of £1 499 billion at the end of 2019.

This was 3,8% higher than the previous year. And in a coinciding report, fewer brokers had been used that year. Thus, showing that such service providers have a huge, positive impact on the economy and success of businesses, big and small.

A final study showed that 77% of lenders feel that the number of loans they will broker, will increase. This indicates a positive outlook for providers. And in 2018, loans worth £28 billion were taken out by lenders through brokers.

NACFB member benefits

Brokerages are regulated by the National Association of Commercial Finance Brokers (NACFB). This means as the business or person taking out the loan, if you use an accredited broker, you will enjoy certain benefits.

This is because members have benefits such as compliance support, an industry voice, business support, professional development and tactical advice.

There is a wide network of brokers throughout the United Kingdom-make sure to make use of this network and find one that works for you.