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You have likely heard many horror stories about bad brokers and the way they do business. Clients who have been denied for traditional loans believe they are getting a deal, or that they are getting the best funding alternatives only to find out that they have been ripped off. The brokers are earning more money by adding extra charges wherever they can.

You can see why so many bankers refuse to work with Commercial Loan Brokers for this reason. Remember, the banker’s reputation is on the line just as much as the alternative lender’s reputation. If these “Wolves in Sheep’s Clothing” overcharge clients and lack of experience and knowledge in the industry, that shines poorly on the banker.

Follow-Up Is Critical

On top of that, bad loan brokers never follow-up with their clients to ensure that their financial needs were met and to answer any questions they may have. As a commercial loan broker, it is important to understand that clients are going to have questions about their loan. They are going to need to consult with your to clarify some of the small print and to understand their various options as well as requirements. You must understand the importance of follow-ups and being a source of valuable information for your clients. Building trusting relationships is key to getting clients and bankers to trust and seek you out for their alternative lending needs.

Knowledge IS Key

Too often, bad commercial loan brokers are not disciplined about  sharing confidential information and the privacy of their clients. This lack of knowledge and attention to detail can cause irreparable damage to a client’s credit, reputation and, too often, their business as a whole. These bad brokers have given genuinely knowledgeable and helpful brokers a very bad name in the industry. For clients and bankers, it can often be difficult to differentiate between good, trustworthy business loan brokers and those who are just out to make a buck!

In order to shed that bad reputation, business loan brokers must work hard and smart. They must sift through potential clients and research lending options. They must find banks that will work alongside them to provide funding for those clients. And they must put in the hours of follow-up, communication and personalization that are so important to building that trust and loyalty.

Selfishness Gets You Nowhere FAST!

When asked about these “bad brokers”,  Darrick Brown, Chief Loan Broker  had this to say;

“I am always appalled when I hear  a broker ask the one question which seems more important than their client, their direct lender, and their reputation. “How many points can I make?”

In a recent incident, I had broker colleague ask if I could assist them with finding a home for an Hotelier- seeking $7MM to refinance their Hotel in a rural area. After getting all the details they proceed to say,”By the way, I got this deal from Fred who was referred by Tom so we can add a point for you as well.”

I paused and asked, “How many points are  you charging on this deal?”

He replies, “One for me, Tom and Fred and we add a point for you.”

I actually said “Hold-Up! You’re telling me that you’re charging the client a total of 4 Points on this transaction?   Let’s do the math; $7,000,000 x 4% = $280,000.00.  That approach won’t serve the client, so we are either going to knock off those points or I can’t help on this deal.”

Change the Way They See You

It is this selfish state of mind that gives business loan brokers such a bad name in the industry. So, as a friendly reminder from us to you, be aware of your business practices, put yourself in the shoes of your client. Give bankers many reasons to trust you and to WANT to do business with you. As a business loan broker, you are helping to make people’s dreams come true! It is better to treat them the way you would want to be treated than to try to make money off of them by overcharging fees, even if you think you can get away with it.