What Are Business Loan Brokers?
Business loan brokers are more like a middleman. They do not loan money directly but rather cultivate relationships with and build a network of lenders. Going back to our previous example of Uncle Bob, let’s make this easier to understand.
We will say you still need to borrow that $1,000. The difference this time is that Uncle Bob does not have the money himself. However, you know that he is friends with a handful of guys that do. In this case, Uncle Bob would consider your situation- how much you need to borrow, how quickly you could repay, and so on- and determine which of his buddies will loan you the money. His buddy then becomes your lender while Uncle Bob is merely the avenue between you and the lender.
There is a good chance that Uncle Bob is going to want a little something for helping you out. He might just ask you to help clean out his garage. A business loan broker, on the other hand, will add a fee according to what you borrow.
While fees make some people run in the other direction, take some time to think about it first. Remember, the broker is handling pretty much the entire process for you, so of course, it is fair that they ask for a fee. The question is whether or not paying someone is worth it to you. If saving the time and preventing the headache is your priority, the fee should be worth it. Just be sure you ask how much that fee will be prior to signing any paperwork.