What is a Loan Broker? Why do you need one?

Posted on February 3rd, 2024.

When many a potential loan borrower hears of a Loan Broker his first reaction is who on earth is that? Many of their well intentioned friends will assure him or her that is just someone there to help in making their hard earned cash disappear a lot faster. However, after approaching a bank or two, and wondering why it is so hard to get someone to listen to what they have to say, they will then seek out someone who can make this seemingly difficult task easier.

If you have used a Loan Broker before you can skip to the parts of the article that are of greater interest to you. A loan broker is someone who connects lenders to borrowers. A broker will have worked with several different types and kinds of lenders over the years. They will also have gained lots of experience about Business Loans and Lenders from the many different kinds of loans they have worked on as well.

To Lease or Rent Equipment

Many business persons or company officials will have convinced themselves that the situation that they are facing can be solved only by the acquisition of a loan. A knowledgeable broker will be able to introduce them to companies that offer financial vehicles such as leases, rentals or options.

In some instances as in heavy construction where the equipment will be used for a short while it might be more to the companies interest to lease or rent than to put down a large outlay of cash on a straight purchase. Also with a cash purchase it sometimes takes a lot more time than to just obtain a lease of the said equipment. There are Finance Companies that are setup to handle these transactions in a matter of days and hours rather than weeks and months that most banks need for an equipment loan to be completed.

Equipment Financing

Once the decision has been made to obtain that new piece of equipment there are as yet other more important decisions to be made. How will it be financed? Where will the down payment be gotten from? How much can be afforded on this new piece of equipment? This again is an area where your broker can rise and shine as a knight in shining armor.

There are several different ways that one can go about financing new equipment. The first and most obvious way for most folks is a straight purchase. However this might not be the best way for several practical reasons. Apart from the difficulty in the questions and divulging of personal information that banks usually require there are other factors that should be considered. 

Advantages of Leasing over Purchasing

Is the equipment to be needed for long term use? There is also the larger down payment to be considered. Also the equipment is now considered as your own which usually means that you are now responsible for the equipment wholly. With leased equipment the lessor usually takes care of that as part of the contract.

When leasing you usually can upgrade the leased equipment quite easily to a newer model and if there is still the desire to purchase; when the entire duration of the transaction is considered it will be found that it was still more cost effective to lease than to purchase outright. This is not considering the fact that there is a lower cash amount to get control of the said piece of equipment, tax savings which is usually viewed as being tax deductible, this when added to the fact that a lease is usually more negotiable to structure and at the end you can usually have easier equipment upgrades.

Financing your company from within.

For companies that have been in operation for any length of time there is yet another solution that they can explore for their need of quick cash without getting into debt. This is the term known as Factor Financing.

Most businesses offer their clients some time to pay their invoices. These terms range from 15 - 90 days. They usually increase these days in increments of 15 days. As an incentive to get their creditors to pay as quickly as possible the companies usually offer the ones that pay earlier or pay cash a certain percentage of their bill. Now while these purchasers are taking this time to pay the company is without the money that is their financial life blood.

Into this scenario steps a group called Factors. What they do is to purchase the debt from the company that is owed, Pay them cash for the outstanding debt at a discount and this allows the said company to utilize their own cash without having to take out a loan.

To offer you an insight into the different companies we make loans to. 

What follows is a small list of loans recently completed.

$60,000

Agricultural Company

Used Tractor Purchase

60-Month Term / 12.81% Finance Rate

1 Day Funding

$12,800

Freight Trucking Co.

Working Capital

6-Month Term / 1 Day Funding

Single Truck Operator

$162,000

Rural Resort

EQUIPMENT Purchase Financing

14.34% Finance Rate / 60-Month Term

0% Down Payment, Used RV

$119,000

Forestry Company

Logging Harvester Purchase

48-Month Term / 0% Down Payment

16.22% Finance Rate

$93,224

Construction Company

Used Bulldozer Purchase

60-Month Term / 15% Down Payment

13.24% Finance Rate

$500,000

Freight Trucking Co.

FAST CAPITAL Working Capital

13.25% Interest Rate, 10-Year Term

No Prepayment Penalty 

If you have decided what your next move will be, then give me a call and I will be most happy to assist you with obtaining the funding for your needed equipment, whether that will be Renting or purchasing. You can also download a Loan Application from this website or get an open offer from a lender by simply clicking the link below.

Email: [email protected]

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We're thrilled that you're considering Loans and Factoring as your go-to financial broker! Whether you need a loan or assistance with factoring, we've got you covered.

Our team of experienced brokers specializes in finding the perfect financial solutions tailored to your unique needs. We understand that financial matters can be overwhelming, but fret not! We're here to simplify the whole process for you.

So, go ahead and fill out the form below. It's quick and easy, we promise! Let us know what you're looking for, and our dedicated team will work diligently to find the best options available. Need a loan for a personal project? Or maybe you're a business owner seeking factoring services? No matter the case, we're ready to help.