A business loan broker helps businesses assess their financing options and navigate the process of obtaining funding from banks and other financial institutions.
A good broker does more than simply forward documents to a bank.
The role is to understand the business, assess its financial position, identify suitable financing routes, determine which lenders may be appropriate and manage the application process from assessment through to completion.
The broker does not provide the loan itself. The financing is provided by the bank or financial institution, which makes the final credit decision.
What does a business loan broker actually do?
1. Assess the business
Before recommending a financing route, we first look at the business itself.
This includes reviewing factors such as:
- Revenue and profitability
- Bank statements and cashflow
- Existing loans and liabilities
- Company vintage
- Industry and business activities
- Ownership structure
- Credit profile
- Personal Guarantee profile
- Funding requirement
- Purpose of the financing
This helps determine what the business may realistically be able to support.
2. Identify suitable financing options
Not every business needs the same type of financing.
Depending on the requirement and financial profile, options may include:
- SME Working Capital Loans
- Business Term Loans
- Trade and invoice financing
- Equipment and machinery financing
- Property financing
- Other business financing facilities
The objective is to identify financing that actually fits the business rather than simply applying for whichever loan is easiest to submit.
3. Identify suitable lenders
Different banks and financial institutions have different credit criteria, lending appetites and industry restrictions.
A facility that may work for one business may not be suitable for another.
After assessing the case, we determine which participating banks or financing institutions may be worth considering based on the company’s profile and funding requirement.
The approach is therefore case first, lender second.
4. Structure and prepare the application
A financing application should accurately reflect the company’s actual financial position and funding requirement.
Where there are areas that may require attention, we can identify them before submission and, where there are reasonable ways to mitigate them, work through those factors with the client.
Not every issue can be resolved, and no broker can guarantee that a bank will overlook a weakness.
The purpose of the assessment is to identify potential issues early, understand how they may affect the application and determine the most appropriate way to proceed.
5. Present the case to the lender
Once the financing strategy is determined, the application can be presented to suitable lenders with the relevant financial information and supporting documents.
Where appropriate, more than one lender may be considered.
However, this does not mean blindly submitting the same application to every bank. The number of lenders and the order in which they are approached should depend on the company’s profile, financing requirement and overall strategy.
6. Manage the application process
Obtaining an approval is not necessarily the end of the process.
Banks may request additional documents, explanations or clarifications during their credit assessment.
We help coordinate these requests, work with the client to address outstanding items and follow up with the relevant parties through the application process.
Once approved, we continue to assist with the documentation and completion process through to disbursement.
What value does a broker add?
The main value of a financing broker is not simply access to an application form.
It is having someone assess the business first and help determine:
What financing do you need?
How much can the business realistically support?
Which financing route is most suitable?
Which lenders are worth approaching?
Are there any issues that should be addressed before submission?
How should the overall financing be structured?
For a business owner who is unfamiliar with the different financing options and lender criteria, this can save time and help avoid taking an unsuitable approach.
Can a broker guarantee approval?
No.
A broker does not control the bank’s credit decision.
The participating bank or financial institution determines whether to approve the application, the final quantum, interest rate, tenure and other facility terms based on its own credit assessment.
What a broker can do is assess the case, identify suitable routes, prepare the application properly and manage the process.
A strong presentation cannot turn an unsuitable case into an automatic approval, but proper assessment can help identify potential problems before an application is submitted.
How does Cornerstone charge?
Cornerstone works on a success-fee basis.
Our standard success fee is 3% to 7% of the financing successfully raised, with the exact percentage quoted after the case has been assessed.
There is no upfront brokerage fee.
The fee structure and applicable percentage are stated clearly in the agreement before proceeding.
Why use a broker instead of going directly to a bank?
Going directly to your existing bank may make sense for some businesses.
However, if you are looking for a larger amount of financing, comparing different financing routes or dealing with a more complex financial profile, it can be useful to have your case assessed across different lenders and facilities.
A broker can help you look beyond a single bank and assess the financing requirement from a broader perspective.
The goal is not simply to find a bank willing to lend.
It is to find a financing solution that fits the business and its objectives.
Speak to us about your financing requirements
If you are considering business financing, we can first assess your company’s financial position, funding requirement and overall profile.
From there, we can determine which financing routes may be suitable and which lenders may be worth considering.
The first step is not applying for a loan. The first step is understanding the case.
