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Finance Brokers 

Every business will need to consider various funding options at some point during the business lifecycle. There are a number of ways to finance your business including bank loans, non-bank loans, angel investors, crowdfunding and venture capitalists. The right option will depend on your particular circumstances. 

It can feel overwhelming when you first start reviewing your options, which is where the expert advice and services of a business finance broker can be very useful.

Our goal is to introduce you to the role that business finance brokers play in helping you find and secure the cash needed to start and grow a business. 

In addition to finance brokers, we can also connect you with other finance professionals including:

• Business loan brokers
• Insurance brokers
• Grants consultants 
• Business consultants 

What is a finance broker?

Finance brokers are experts in finding the right financial solutions to help you start or grow your business. As well as sourcing and securing funding, they also offer financial advice to help you reach your goals.

What is the difference between a finance broker and a financial planner?

Finance brokers and financial planners share similar knowledge and experience, and both can be imperative in helping you manage your business’s financial health and prospects. Finance brokers are more focused on finding and securing finance opportunities, whereas financial planners help manage and maintain your existing finances or investments.

What does a finance broker do?

Some of the services offered by business finance brokers include:

• Conduct a financial needs assessment
• Offer financial advice based on your circumstances 
• Find loans (e.g. for business finance, equipment financing, commercial vehicles, etc.)
• Act and negotiate on your behalf when liaising with lenders and stakeholders
• Assist with finance applications 

Why should small businesses use a finance broker?

Finance brokers are experts with extensive experience in finding the right funding solutions for small businesses. They are independent professionals that aren’t directly connected to lenders, putting them in an ideal position to help you. Some of the benefits of working with a finance broker include:

• Save money: With access to so many lenders, finance brokers can negotiate the best deals and save you money.
• Save time: Finance brokers help you cut through the noise and avoid having to find and compare quotes for different lenders. They have inside knowledge of the type of lenders who could be a good match for your needs, and can give you a short-list of options much faster than you could yourself.
• Understand the fine print: They say the devil is in the details, and it’s certainly true when it comes to anything business or finance-related. It’s important to understand the specifics of your interest rate and loan repayments including hidden charges, penalties and repayment options. Finance brokers go through this with a fine tooth-comb to ensure you’re getting a fair deal.
• Smoother approvals process: Going through a broker will ensure applications are completed correctly and supporting documents are provided, therefore giving a higher chance of approval.

How do I know if I have a good finance broker?

When choosing a finance broker, there are a few important things to look out for:

• Ensure they are licensed: All accredited brokers in Australia must hold a license with the Australian Credit License issued by ASIC and be registered with the Finance Brokers Association of Australia (FBAA) and the Australian Financial Complaints Authority (AFCA).
• Ask about the lenders they have access to: How many products and lenders will they have access to?
• Ask them to explain their fees: Find out how and the amount you will be charged (note: it’s usually on a commission basis). A finance broker will provide disclosure documentation outlining their fees.

They are eager to understand your business: A good broker will ask you numerous questions and get a good understanding of your business and funding requirements from your initial conversation. 

How much does it cost to hire a finance broker?

Not all finance brokers charge for their services in the same way. There are a few different fee structures:

1. Finance brokers that don’t charge you a fee (they receive a commission from the lender for introducing you to them)
2. Finance brokers that charge you a fee/commission and receive a commission from the lender
3. Finance brokers that charge you a commission and don't receive a commission from the lender.

If you choose a finance broker that charges you a commission, the average rate is usually around 1.5-2% of the total amount being lent to you.

How can you help your finance broker?

There are a few things you can do to assist your broker in finding the best funding opportunities for your business:

• Be clear on what you need the funding for
• Prepare your financial documents and accounts in advance 
• Know what questions you want to ask prior to the meeting

If you’re ready to hire a finance broker, simply answer a few questions about your business and we’ll introduce you to finance brokers that can assist you. You can also connect with a range of other finance professionals including grants consultants, loan brokers and financial consultants and financial advisors. 

You can also reach out to our community of business owners with any questions about business finance.