Knowledge is power, the cliché says. But this aphorism was never truer for commercial finance brokers than at present. Intermediaries with detailed knowledge of industry sectors, clients’ needs, and the myriad of finance providers now available can make the crucial difference between a successful funding application or a disappointing rejection.
Specialist knowledge has always given experienced broking professionals an edge. Business owners are more likely to receive funding due to a broker’s intimate understanding of what makes a funder tick. And SMEs can rely on an experienced intermediary’s reputation for finding the right deal for their specific type of business in the right package at the right price. Such expertise has become more relevant as the lending landscape morphs at an astonishingly fast rate, offering small businesses new ways of borrowing, and more tailor-made options to choose from than ever before.
These developments provide great opportunities for brokers to maintain their point of distinction, and those who keep abreast of the latest changes in their field are at a clear advantage against their more traditional peers. Recent research from Investec Asset Finance indicated brokers were predicting a significant increase in activity in the coming 12 months. However, most believed any extra business would come from existing clients, with new users considered much harder to win. Brightstar Financial disputed this, saying it was only brokers who weren’t sufficiently familiar with specialist markets that were struggling in this way. Those who knew their industry sectors and had kept pace with new funders were busier than ever with clients both old and new.
Both points of view highlight a perennial truth – expert knowledge is a must for brokers looking to grow their own business. Customers increasingly want products bespoke to their particular needs and circumstances, and, as I’ve said, there’s a seeming embarrassment of choice when they start to research business funding today. Small business owners will be reassured by a broker who really understands what’s on offer, and can explain what it all means in practice. The rapid growth of alternative finance has caught some brokers unawares, but many others have been quick to grasp the opportunities potentially provided by non-traditional outfits like ours. We, as lenders, bear a responsibility to support intermediaries at this time of flux, to explain how we’re adapting to meet the needs of their client base, what makes us different, as well as helping broking professionals to relay accurate, up-to-date, and relevant information to the enterprises with which they work.
We ourselves have proven expertise in many industry areas, and must loudly advertise that fact to the broking community and SMEs alike. Boost Capital has a strong record of helping companies in sectors conventional lenders have often shunned – retailers, those operating in hospitality, franchises, and wholesalers, to name just a few. Plus, we have the advantage of the wealth of experience brought to the table by our parent company, the recently rebranded BFS Capital. The US-based business has provided more than $1 billion worth of funding to companies across more than 400 industries since 2002. That kind of knowledge is invaluable, and feeds down into our UK operation.
Our hope is to marry our own learning with established brokers’ sector knowledge, all with a view to giving more SMEs the service and finance they need. I honestly believe we must work together to achieve this end – demystifying finance for entrepreneurs, and helping them to realise their business goals. How we work with brokers really matters if we are to be successful in that aim. Obviously, brokers must consider any product and fee structure when assessing what might work for a business client. But, really understanding the lending criteria of a particular funder can also make all the difference to a customer’s success as a borrower. It is for us to communicate to brokers what we’re looking for in a business applicant. Because intermediaries who know how best to put together an application are the ones who are most likely to deliver their clients the desired outcome – the most appropriate funding delivered quickly in a form with which company bosses feel comfortable, and that they can use to best effect.
Smart intermediaries are gifted at providing reassurance to a company that it is being paired with a responsible and trustworthy lender. This is of paramount importance, particularly since the lending field has become so crowded. With so many new entrants to the funding space, it’s not surprising many business owners feel intimidated and hesitant when faced with all that choice. We are proving our worth every day in our dealings with small firms and the brokers who work with them. But, we must still work hard to cultivate our relationships with broking professionals to ensure they know our values, our areas of strength, and how we might help them and their clients.
Knowledge is, indeed, power. I believe we have a great deal of useful expertise that we can share, while many brokers also boast impressive specialisms. Small business owners want and need that combined wisdom to grow and flourish in the future. Broker-introduced finance has the potential to transform already healthy businesses into enormous successes. Working together, we can make that possibility happen.