Why would you use a finance broker instead of a bank?
Whether it is for an Office Refurb, HorseBox Finance, or Software funding?
Having worked at banks, finance brokers and specialist finance companies We are in a good position to detail both the advantages and disadvantages.
First, let us define the key areas for discussion and then elaborate on those points;
It is quite common when dealing with large organisations to have various contacts in different departments and occasionally no key point of contact for each customer.
For instance; a new proposals team, credit, account management and payout teams.
This can lead to continuity issues occasionally the person you talk to will need to review the whole case from the starting point and cannot just pick up the file and understand at which point in the process you need to start from.
Large organisations are usually finetuned with their processes, it is common for situations that should fall outside of the norm to be referred to a senior team, leading to delays and occasionally the file being pushed back to the start of the process again.
Smaller companies can be more flexible in meeting the needs of individual customers requirements a common scenario would be where a file needs to be prioritised to make sure funds are received the same day so a client can collect essential equipment.
A flat structure usually enables more flexibility and therefore better service.
Moving on from service, flexibility is closely linked but can also mean a whole host of points that enable better continuity and in turn better service.
Most lenders will have strict criteria for assets they will finance and also types of customers they want to work with.
The benefit of working with a broker again for continuity is that they will have access to lenders that will finance all types of assets for your business.
It is quite common for a business to finance many different types of assets from vehicles, office furniture to software possibly materials handling equipment or warehouse racking.
You will have one point of contact which will ensure you receive excellent service.
We have experienced lenders continually moving the goalposts in line with changes in the UK economy and global markets.
A lender can offer finance on office furniture but will not on Software or IT Equipment.
Now we get to one of the key areas why our customers choose to work with us.
It is a misconception that just because you are dealing with a large company their prices will be cheaper.
Consider for instance the cost of running a large building many layers of management, company cars, insurance costs they all add up!
A percentage of company profits will need to be allocated to these running costs.
You should also factor in that different lenders will alter their pricing based on a cost of funds and this will be dependent on where that funding comes from, the bank of England, private investors or other money markets.
Prices can vary depending on the asset such as a Horsebox Finance, Light Commercial Vehicle or Soft Assets, IT for example.
Your finance broker can source a competitive cost of funds, the advantage they have is not being tied to one particular lender.
Whilst on occasion it is sensible not to be wholly focussed in one area, all three could affect the profitability of your business.
We have made it our business to be agile and competitive whilst offering a one-person point of contact.
For instance you wanted horsebox finance and needed it quickly.
A customer could make an enquiry before lunch, sign a document in the afternoon and be in a position to collect a vehicle before the end of the day.