Darwin Delahaye

Three questions to ask lenders




If you don’t ask, you don’t get. This oft-used maxim can also apply to the commercial finance world.

Not convinced? Let me take you through three key questions that every broker should ask their panel of lenders.

  • How quickly can things be done?  

If time is money, then this is the most valuable question of them all. It’s likely that some lenders you work with take more time than others with certain parts of the loan application process. For example, one lender may be able to make a credit decision in no time, but turn out to be slow when transferring funds to your client’s account; or vice versa. Perhaps you’ve found a handful of trusted partners who do both efficiently.

In addition, speed of service may vary between lenders. Why not ask what you could do as a broker to accelerate the application process? That extra piece of information about a delayed payment or an upcoming contract could help an underwriter to make a final decision quicker. If your client’s case is time sensitive, this could make all the difference.

  • What affects your pricing? 

By asking a range of lenders about their ‘ideal business’, you can advise your client on their best funding options. One lender may prefer a retailer over a construction company, another could favour a construction business over a wholesaler. It’s up to you to bring all of this information together to find the right fit for your client’s budget.

In addition, you may find that a higher number of years in business will reduce costs with one lender more than another. Interest rates for different loan durations can also differ from one lender to another. Finally, understanding how your client will be viewed by an underwriter before submitting an application can help manage expectations from the start.

  • What information do you need to make a provisional assessment? 

What information does your portfolio of lenders require? Financial accounts, bank statements; and then what duration should these documents cover? Some lenders require six months of bank statements, some require 12. This could differ from one lender to another and on a case-by-case basis.

Once you know what information is needed, be sure to check on the correct formats. A PDF may be more suitable over a scanned document or a CSV file, for example. It’s important to relay this information to your client so they know what documentation they need to provide.

Knowing what questions to ask your panel of lenders can make all the difference to the success of your clients’ loan application. It will pay to be curious and to maintain open channels of communication, ultimately leading to a better experience for everyone involved.

 

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