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A thorough Loan Assessment is the first critical step in successfully fund commercial loan.  When done properly it builds rapport, earns the client’s trust, and shows you whether a deal is worth pursuing.  (To learn more about the importance of only pursuing the right loans, read about Chasing Elephants.)

The loan assessment process has two key components:

A) Interviewing the client to assess the borrowing need and determining if the loan is within your scope of financing.

B) Matching the borrowing need with three direct lenders who can facilitate the type of loan requested. From my perspective it is much better to have three prospective lenders than just one for each deal you are doing.

In this crucial step of the BLB (Business Loan Broker) process, the Business Loan Broker will learn to interview the client with one goal in mind: to flush out the following 5 factors.

  1. Purpose of the loan
  2. Dollar amount
  3. Source of Repayment
  4. History and Experience of the borrower
  5. Business Formation

Assessing the client will enable the Broker to establish a rapport, gain the client’s confidence that you can meet their funding needs, and make sure that the client is a good fit for your brokerage.  Over the years we’ve tried hundreds of scripts and variations for this process, and here is a quick summary of the script we’ve found to be most effective.

Your Client Interview Script

BLB: Hi my name is Darrick Brown with (name of your firm) and I was referred to you by (referring banker) . He or she indicated that you are in the market for some possible funding that you have not been able to secure at this time?  Is that correct?

* Note: At this stage you have already debriefed with the banker and have a synopsis of their need.  So this question is designed to warm up the conversation more than to get meaningful input.

Prospective Client (PC): Yes, that’s right. (They will give you an overview)

BLB: Based on what you shared and overview from (the Banker) we may have a few funding opportunities for your project.  Let me share with you a little about myself and my firm and how our process works.

* Note: Never quote a price during the interview.

BLB: My firm has an established network of direct lenders locally, and nationally. We have access to traditional (Banks) as well as non traditional lenders who can fund businesses like yours. Our process works like this.

The Process

Step One: First, I would need to obtain your loan file from the lender. With your permission I can get a solid synopsis of your current financial situation and quickly assess whether or not we can deliver what the bank cannot do at this time. Can you tell me why the Bank or Direct Lender declined you at this time?

Step Two: After I have obtained your file, we will submit your borrowing scenario to 3 key lenders to obtain their feedback. If we obtain an interest with at least two, we will then submit to you a” Proposal” indicating our firm’s terms and conditions, such as price points, fees, and the services we will provide. If we do not have a minimum of two key lenders we will pass on contracting with you and return your file in full.

* Note: Once we get a “YES” we move forward with the client we then and only then do we submit a full contract. ( This will save you valuable time weeding out the non-serious and the shoppers).

Step Three: Once we are on agreement on the terms, we will then send you a full contract which engages our services to obtain financing for your business.  Additionally, we will indicate that we should be able to obtain a LOI (letter of intent) or EL (engagement letter), LC (Loan Commitment) from a bonafide direct lender.

Step Four: Fees are very common amongst Commercial Loan Brokers and is the #1 way that we are compensated for our services. Let’s take a closer look; The key fee that we assess is known as the “Success Fee”.  Simply stated; I bring the client to a lender that approves and closes a loan for the client. Thus, I am compensated a fee for my success. Typically, 1%-5% (Some cases higher)

Step Five: Once we receive the signed contract and have agreed upon the broker fee, I can then send a Loan Checklist of key items not provided by the Banker and upon receipt (The Clock starts ticking). The loan is packaged according to the lenders specs and submitted accordingly.

Continuing the Conversation

Starting the conversation in this way allows you to first build rapport with the client.  Then, by providing a clear outline of the process you give them confidence in your experience and trustworthiness.  It also sets you up perfectly to close the conversation with “So this all sounds great.  The next step in the process is just to…”

This is just one of the many scripts our brokers use to ensure success at each step in the funding process.  If you’d like to learn more check out our 2016  trainings at the Commercial Loan Broker Institute.