There are a number of people and organisations involved in the process of arranging commercial finance – from customers, their accountants and lawyers, through to brokers and the lenders in the marketplace.
Brokers are a crucial cog in this machine. We don’t just liaise between potential borrowers and lenders, we also act as a key link between all the different stakeholders and use our expertise to not only arrange the right kind of finance for the customer from the right lender, but also to steer the deal to a successful conclusion, on time – and with an eye on the future as well.
As a broker, we keep a deal moving along, as the journey doesn’t end with the initial agreement. We are here initially to secure the best deal for the client, but then we back that up by ‘holding their hand’ all the way through the process, liaising between all the parties as needed and keeping everything on track. That’s what an experienced broker can bring to the table, offering value for money and saving time, aggravation and stress for the client.
A couple of weeks ago we were approached by the accountants for a company that needed to borrow 105 per cent of the purchase price of a commercial investment property, and we successfully arranged that deal within 48 hours. The key was knowing where to go and who to talk to.
We also brokered a deal last week on a £10 million refinance which went through on the date agreed at the beginning, despite a number of roadblock – such as the valuer being on holiday. In this case, the client appreciated our support so much that they now want us to act as their link with the bank beyond the transaction, which is something we’re happy to do. This could be a vital service for them given that banks are now moving away from frontline support at certain levels of lending, offering people support through call centre management rather than a dedicated face to face, experienced business manager.
Right now; still right next year
When I talk about arranging the best deal for the client, I don’t just mean ‘what’s the best deal on offer for today?’, I mean ‘what’s the best we can arrange that will support this business through the next few years?’. SMEs need stability wherever possible, without the hassle and cost of rearranging their finances every year, and a good broker will not only look at the business’s situation at the time of arranging finance, they will also take into account the business’s plans for growth or change over the coming years and look for a deal which will continue to meet their needs for some time.
We are aware of a number of aggregator lending websites which focus on 12-month deals that seem to offer the best solution for clients’ needs right now, but which will require renegotiation a year later. The argument is that clients should go back to the market to get the best deal each year, but not only does this lead to uncertainty for the client, they are also hit with an additional arrangement fee each time a new deal is arranged.
In my mind, a short term deal that needs to be renegotiated early on is not a good deal; a good deal is one that is the best possible over a longer term and doesn’t need to be revisited for a number of years.
And that’s the difference an experienced broker brings – brokers add value by taking the time to understand their clients and put in place funding that’s right for them and sustainable not only from the beginning, but also for the foreseeable future.