Every week, Adam Tyler, Chief Executive of the National Association of Commercial Finance Brokers (NACFB) gives us a handy hint for brokers’ best practice…
Tip 3: What fact Find?
Some may wonder how such a place exists in this ultra-regulated environment, but it does. Business owners are considered to be sophisticated borrowers, and they are. They run their own business so should be able to read a set of accounts, make business decisions and deal with all the complications of being self-employed.
This is why we do not need the full onslaught of regulation in the commercial finance industry, and this is why there is no need to complete a fact find before advising on a suitable type of finance. But to ignore that process completely would be foolhardy, a broker needs to understand how a business operates, what it has in place now and what its plans are for the future. What does happen is that all this information, along with basic and personal details, is collated and kept, but in a variety of ways. This does not need to be prescriptive, but concise enough to provide an audit trail of advice. KYC must be followed and even though sometimes they do not realise it, commercial finance brokers are completing their own fact finds.
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