Helping small businesses get into bank loan financing should be the driving force for brokers.
At my loan brokerage office, our mission is clear–we want every company we work with to get to a point where they are bankable through an SBA-backed loan or another traditional bank loan. If a company is considered “bankable “, that is, they meet all of the criteria necessary to receive financing through an FDIC-insured bank, they’ve earned the right to get the cheapest loans that will allow them the best opportunities to grow and create jobs.
This being said, we’re not naive to think that every company is bankable: in fact, most are not.
In cases when we work with these non-bankable companies, our driving force is always to help them get to the point where their chances of being approved for a traditional loan are greatest. While small businesses work towards this goal, it’s likely that they will pay more for capital through alternative loans. However, we don’t want them to get stuck in the land mines of alternative lending or be forced into endless renewals. We guide them and help them maneuver the lending landscape, identifying the lenders who will work with them and celebrate when they graduate to a bank loan.
We attack this challenge on a micro and macro level. On a micro level, we treat each company and entrepreneur we work with care and concern for the longevity of their business, and do our very best to help them find financing that works for their unique company. We also speak out for the need of reform and transparency within the alternative lending space. These high-cost loans as a last resort recommendation for small business owners.
On a macro level, we have created tools like Banking Grades which has evolved to Entrepreneur Bank Search to help companies we don’t have the opportunity to help.
I also personally take my position as an advocate for small businesses within the lending industry as a serious endeavor. My published work, in addition to speaking engagements at conventions and lobbying our government, is all aimed at helping create a path to bankability for entrepreneurs.
It’s time to step up as loan brokers and accept the responsibility that we have to act on behalf of entrepreneurs in order to help them receive smart money for their businesses. Brokers who act with their best interests in mind at the expense of small business owners are doing a great disservice to the small business industry and the economy as a whole.
As a loan broker, it’s vitally important that we always treat borrowed money for a client as a means to an end. The “end” for some businesses will be to pay off a loan. In many cases, however, the “end” is becoming bankable and entering into an affordable, FDIC-insured bank loan.