Takeaways

  • Using a business finance broker means they work for you, making sure you’re able to secure the most favourable business loan terms on the market.

  • They can help with a wide variety of business finance, including term business loans, commercial property, equipment and asset purchase, lines of credit and more. A commercial finance broker plays a crucial role in navigating these options, ensuring you get the best possible deal tailored to your needs.

  • The primary benefits of using a business finance broker are potential access to better loan terms, significant time saving and ensuring your loan and business objectives are well aligned.

Finance broker business loans

What is a business loan broker?

A business finance broker is an accredited agent that is there to help you navigate the world of business-related lending, including the broader marketplace of commercial finance options.

A good business broker has access to a wide marketplace of potential lenders – from the big banks to smaller niche lenders. There job is to understand your situation, needs and objectives in depth, so they can negotiate on your behalf with business lenders and show you the best fit options that are available.

“Having a business broker working for you means you can avoid rushing in and getting the wrong-fit financial product, which may affect your cash flow and financial position over time” says Nadine Connell, accredited finance broker and Co-Founder of Smart Business Plans.

What types of business loans can a broker help with?

There are many different types of business loans – experienced business finance brokers help you understand the pros and cons of different options, based on your unique needs. Some common types of business lending include:

Term business loans

Term loans are one of the most common types of business finance. A business fixed rate loan is particularly beneficial for funding larger, one-off expenses like new equipment, real estate, or working capital, offering the certainty of fixed monthly payments for businesses that know exactly how much they need to borrow. They involve borrowing a lump sum of money from a lender and repaying it over a fixed period, typically with regular installments of principal and interest.

Term loans are used for various purposes such as business expansion, equipment purchase, working capital, or refinancing existing debt.

Line of credit

A line of credit provides businesses with access to a revolving credit facility, allowing them to borrow funds up to a predetermined credit limit. Businesses can draw funds as needed and only pay interest on the amount borrowed. A line of credit can be suitable for covering short term expenses, or taking rapid advantage of an unexpected opportunity for growth.

Additionally, a business overdraft is a form of line of credit loan that offers companies the flexibility to continue withdrawing money even when the account has no funds, providing crucial cash flow stability and short-term financial flexibility.

Equipment financing

Equipment financing allows businesses to purchase or lease equipment and machinery needed for operations. The equipment serves as collateral for the loan, reducing the lender’s risk. Equipment loans typically have fixed repayment terms and may offer tax benefits through depreciation deductions.

Invoice financing

Invoice financing, also known as accounts receivable financing, involves borrowing money against outstanding invoices.

Businesses can access immediate cash flow by selling their unpaid invoices to a lender at a discount. Invoice financing helps businesses maintain steady cash flow and cover expenses while waiting for customer payments.

Commercial real estate loans

Commercial real estate loans are used to finance the purchase, construction, or renovation of commercial properties such as office buildings, retail centers, and industrial warehouses.

These loans may be secured by the property itself and offer competitive interest rates and long repayment terms.

Cash advances

Cash advances are upfront payments in cash in exchange for a percentage of sales in the future. Repayments can be made with a fixed percentage of the business’s daily sales, making it suitable for businesses with revenue streams that change.

However, cash advances typically come with higher fees and interest rates compared to traditional loans.

Business acquisition loans

Business acquisition loans are used to finance the purchase of an existing business or franchise. These loans may cover acquisition costs, working capital needs, or other expenses associated with the acquisition.

Business acquisition loans may be structured as term loans, lines of credit, etc, depending on the borrower’s needs and qualificatio