Saturday, September 28, 2019

Hey Brokers...Why Knowing Your Client AND Financial Review Matters

Unfortunately, to many, the intended purpose of a “broker” has been “broken”. The majority of brokers are good brokers...and they don't deserve the negative reputation that has enveloped the industry, but the bad seeds are out there.  

So this is why lenders worry whether merchants are responsible borrowers.
A lender/broker relationship weighs heavily when measuring the successful outcome of a client's file. Why is that? The lender just wants to do business, provide financing...and then get paid back.

What Makes A Good Broker?

A good broker has resources and successful relationships in a specific niche to help his/her clients, and he will perform a “KYC”(Know Your Customer.)  

Networking alone isn’t going to cut it.  As a broker, you need to:

  1. Take your time to learn the process.
  2. Determine your clients' needs and wants
  3. Learn what the lender is looking for.  Next time you’re submitting a file, stop to make sure you send a file the lender wants.

1. Learn The Process

It is imperative that you learn your industry.  If you’re servicing a client who needs an advance, it is important that you review his/her ability to pay AND THEN you must stay connected with the client…including before funding, during, after and beyond.  Take ownership of your client.

If one advance exists, never put yourself in the position where your client gets a second advance (except in extremely limited circumstances).  Upon the first advance, you need to guide your client through becoming “bankable”, by making sure he manages his cash flow, and the importance for him to do projections.

2. Learn What The Client Needs And Wants.

This is the "KYC" portion of being a broker. Often a client presents themselves when they have less than two days before they have to have the funding they it is important to provide what the client wants, but don’t overlook his needs...which means conducting good financial review prior to the funding.

After you fund a client, take ownership.  Invest time in streamlining your relationships with them.  It is good practice to be comfortable with each client and check on them periodically.  Help the client plan their next steps, and beyond.

3. Know What The Lender Is Looking For.

What is a lender looking for?  What is their niche?  What types of files do they want?  NEVER send a lender files that don’t match their guidelines.

It is important that you send the lender completed files.  For example, make sure that you review the clients' bank statements and application prior to sending to the lender. Each bank statement should be complete, in numerical order, and right side up.  Limit the faxes.  Applications should be signed and dated.  AND LASTLY, before you send a file to the lender, you should have a completed intake form.

It is important you know (a) what the funds are going be used for, (b) a short history of the business, and (c) a comprehensive history of the owner(s).

Lenders will appreciate that you took the time to learn more about your client and will look forward to the next files that you send (as opposed to other brokers, who are not nearly as thorough.)

For more tips, feel free to reach out at or call 315-314-2426

Happy Funding!