An impartial educational overview of broker services, potential benefits and limitations for businesses considering commercial finance.
What a commercial finance broker does
A commercial finance broker acts as an intermediary between a business seeking finance and lenders. Depending on the broker’s service, it may help clarify the requirement, identify potential funding routes, organise information and introduce the customer to providers.
When a broker may add value
A broker may be useful when a business wants to compare possible provider routes, is unsure how to describe its requirement, or has a specialist asset, unusual trading context or multi-part funding need. A broker familiar with the sector can help make the commercial context clear to a lender.
The broker may also coordinate questions and documents as a case progresses. The lender still assesses the application and decides whether to lend and on what terms.
- Considering more than one funding route or provider
- Preparing information about the business and funding purpose
- Exploring specialist assets or non-standard requirements
- Coordinating lender queries during an application
Limitations and questions to ask
A broker may only work with a selected panel, so its coverage may not include every lender. The broker is not the lender and cannot guarantee approval, rate, amount or timing. Some brokers receive lender commission and may charge a customer fee; ask how the broker is paid, what providers it can approach and whether any credit search or application is proposed.
A broker’s role and regulatory status vary. Read the disclosures and understand whether the service provides advice, recommendations or information only.
Sorbus as one example of the broker model
Sorbus Finance is a UK commercial finance broker with an extensive panel of 150+ lenders and a team with specialist sector and asset experience. Sorbus is a broker, not a lender, and does not provide personal advice or recommendations.