By: Darrick Brown, Banker, Consultant and Facilitator.
While working as a Business Banking Manager, I attended a staff meeting where I watched a sharply dressed gentleman (named Mike) introduce himself as a “Commercial Loan Broker ” to the “Private Banking” team in Denver, CO. He was articulate, knowledgeable and presented us with a cutting edge concept that created a win-win for the bank,our customer’s, and of course himself.
He requested that for one full quarter ( 3 mos.) on a trial basis, that we send all of our declined clients seeking a commercial loan to him to broker with other non- banks. In turn, he would introduce them to secondary financing sources. His big selling point as he so eloquently closed ” Oh and by the way , I take care of the loan needs for now and you maintain (keep) the deposit relationship”. Meaning he would not take their client to a their competitor.
This intrigued each of us as he would visit us individually every other month, and eventually we would refer our declined loans. Mike would stop in to see us frequently and called us each by name to the point we got very used to seeing him.
This guy did not have title, he did not have all the corporate perks and prestige, but what he did have was a home office, business cards a laptop and a relentless spirit of un-matched persistence. Best of all he had money in the bank from his earnings as a commercial loan broker!
This was my first big impression and biggest lesson I had learned from Mike.
Over the years I finally got up the nerve to ask him how much he makes within a calendar year? That opened the door for him to put the full court recruitment press on me and so he invite me to team up with him. When I promised, I would give it strong consideration he then shared with me his earnings.
He indicated that in his second year of business he made a little over $250,000 brokering loans and charging price points as low as 2% and as high as 5%. As my jaw dropped, he than asked me ” look it up, I bet you did not know I have been banking with you guys for years”?
To my surprise, this guy had over $300K in his accounts and I thought about my perks, my insurance, my title, my salary, my level of respect that comes from having achieved an Executive title of Senior Vice President.
The following year, he made well over $500K. He and his wife sold their properties, two cars and furniture and bought a piece of land on the Island of the Dominican Republic, where he now runs a successful Island tour & small construction business.
The Commercial Loan Broker Institute was conceived in 2012, while brain storming with a colleague of mine (IT specialist) to increase my business capacity ( streamlining my process). I had just brought on a new seasoned banker to join my three member staff brokerage firm. Which helped me to formulate my thought process.
Over the years, I have helped many bankers, brokers, CPA’s, business attorneys’s to price and place loans for clients outside of the traditional banking model. This individual wanted to learn the entire process to the point of joining my team.
One day my IT Specialist and I were discussing the utilization of a management tracking system, when he posed the question to me; “What is your quick and dirty elevator speech if you were to describe your business”? I thought for a minute and stated; If we were to cut to the chase it’s very simple. It consisted of 5 basic steps.
5) Follow- up
At that moment the word “Epiphany” came to mind. We both looked at each other and realized that we should use this model, this concept, this process to teach others “how too”!
How to leverage my skills, my know how, my knowledge, my research, my net work, my contacts, my resources, my trial and error, my pit-falls, my successes and last but not least my passion for working with our brightest commodity in economics “businesses”!
Thus the Commercial Loan Broker Institute came alive!
I then spent the next year doing my homework on the various training programs offered throughout the country. I found that the best training programs are on the east coast as most of the west coast firms have closed down for whatever reasons. While the East Coast firms offer solid training and ongoing support I realized that with my current network, of lenders, facilitators and industry contacts- we can offer a product similar to the east coast but in the heart of beautiful Denver, CO..
We have the years of experience brokering loans nationally, working with direct lenders nationally, experience to the nth degree, and a training model second none which has been tested working with large corporations nationally.
Our training model focuses on what we call the “COI” or Center of Influence, whereby a referral source becomes the key to building a pipeline of quality business referrals. Think about it, if you develop a relationship with a Banker who refers their declined clients to you, it brings immediate value to the Client, the Banker and the Bank. This is win-win situation that can repeat itself over and over again.
Let’s take it a step further…
When a Broker establishes a relationship with a Banker, Commercial Real Estate Broker, CPA, Title Companies, CDC’s, and more- this is the gift that keeps on giving. Further, this group in turn will provide you with a complete loan package for you to deliver to your funding source!
The old fashion model- of sending out emails, flyers and direct mail can be costly in money and time whereby working directly with COI’s and Indirect Marketing ( blogging, newsletters, social media) the broker has set him or herself up to build relationships better quicker and faster. Imagine, if you had just 10 bankers sending you one declined deal a month for 12 months, that’s 120 prospective complete loan packages in your hand versus the shot-gun approach where in most cases you open the door for one of the following.
1) The inexperienced business owner (less than 2 years in business)
This includes start-up businesses that are in the early stages of their business plan or lack business assets and may be on their last leg of staying open.
2) The Shopper (shopping around for the best rate)
Time and time again, I have flushed out Business owners who have sent their deal to every banker in town and their loan has no chance of obtaining an approval.
3) The Broker Chain (2 or more brokers working on the same deal)
Nothing is worse then a another broker calls you up and claims they have a large loan deal whereby they are willing split broker fees with you.
What they failed to reveal to you is their are at least 3 other brokers on the deal expecting to get piece of the broker fee.
Advice: Check out each of the training firms key offerings, experience, business model and match up with your expectations, future goals and earning potential. Once again, while their are a limited amount of “Commercial Loan Broker” programs across the country the final question is how soon do you want to get started? Would you like your own business coach through the process ? Last but not least… This is not a get rich quick business nor does it imply that all who partake will be successful.
No matter which Training Program you choose, you will have work for it, stay diligent and work plan and then enjoy the return on your investment.