How to Apply for a Business Loan: Why You Might Use a Commercial Finance Broker

How often has this thought popped into your head, how do I apply for a short term business loan? And then you might go onto your next thought, why would I use a commercial finance broker? Perhaps you’ve read about using a broker somewhere, or someone has advised you to use one.

Well, there are two overriding reasons why you need to use a commercial finance broker in today’s business environment. Each one is related to the other: complexity and opportunity, and each one has their part to play when it comes to your overriding objective, applying for a business loan.

Let’s look at complexity first. It used to be that you ran a company and had a business account with the nearest bank along your high street. Things were much simpler then. You knew your bank manager, he knew you and when you thought you needed a loan, you went in, he looked at your books, looked at the cut of your jib, and decided whether you either got the loan or didn’t.

Then came along the 2008/2009 financial crash, when suddenly even the biggest banks realised that buying junk mortgage debt at premium prices, wasn’t good for business. Arguably the banks effectively withdrew from small business lending before then, but the crash meant that banks had to shore up their own balance sheets and that meant loaning to SMEs was not on their priority list.

Now, of course, the banks still lend to SMEs, but the terms and conditions can be onerous and they tend to pick the very safe bets. The phrase business loan has disappeared out of their playbook.

Change In the Market

This reluctance from the banks created a lending vacuum which was filled by all manner of investors and companies who are prepared to back SMEs, and this is where opportunity comes in.

Money has for the last decade been plentiful, despite the Government’s early determination to show the international money markets that sensible housekeeping meant austerity. The UK is a rich country and the proportion of wealth-owners is increasing, mainly due to profits made from baby-boomer property ownership and the number of small business owners.

But this amount of wealth must find a use. With interest rates at still near record-lows, sitting on your cash is not a good idea. So, sensible money needs to find a good home and that means it must be put to work, and much of it goes to invest in companies and property.

Now, the point is, that previously where you maybe had limited options to fund your business, nowadays there are thousands of ways to raise money, which feeds back into the other word, complexity. You cannot be expected to know all the schemes and all the ways to raise finance. It is a wide and hugely detailed field.

How a Business Loan Can Help

Let’s say you run a local garage. You are a great mechanic, you have some great employees and a growing customer base. One thing you are not though is an expert in finance. You understand that you have to make enough to pay the rent, utilities, salaries, suppliers, and tax, but say a nearby garage comes up for rent, and you know that doubling your operation, will double your profits. How do you cover the extra costs whilst you are building the new customer base? In this scenario, you might be wondering “how do I apply for a business loan”, and then realise that you need the help of a commercial finance broker.

The broker acts as the middleman between you and the provider of the finance. It is the broker who will ask you about your business and then match you with the right lender. This creates the best deal for you and the lender. The broker has access to hundreds of lenders, their individual products and the risk profile they’ll accept. You cannot possibly know that, or be able to research it in the time given. In the same way, you use an accountant because they are experts with figures, a commercial broker is also an expert in raising business finance.

So, get some help, from someone who knows the business.

Find a Business Loan Lender with Ping Finance

If you are considering applying for a business loan, but haven’t done it before and you are unsure where to start, speak to a member of our team at Ping Finance and we will help throughout the process.

We’ll take the time to get to know you and your business’ circumstances, matching you to lenders that can offer some of the best business loan rates available. We’ll present you with a wide selection of suitable finance providers who you can apply to simultaneously, reducing the time it takes to secure a loan that’s right for you.

We have the knowledge, expertise and experience to help your business as we have worked with a diverse range of industries and different sectors. There is no charge for our services and it is always your decision if you want to accept the finance options we present you with. Our quick, straightforward process is designed so you can access the finance you need as soon as possible.

With our support, you will get the help and finance your business needs to grow and prosper. So, register now for free with Ping Finance.

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